By Andrew Teyie
Investors in Nairobi’s Eastleigh are moving billions of shillings to neighbouring countries in the aftermath of a security swoop that may have far-reaching implications for Kenya’s economy.
Weeks after Operation Usalama Watch meant to flush out illegal immigrants and suspected Al- Shabaab terrorists was scaled down, the Sunday Nation returned to Eastleigh and uncovered stories of job losses, businesses on the verge of collapse, vacant houses and a population on tenterhooks.
It is so bad in the once bustling business hub that some of the biggest investors have opted to move their money to Uganda and Rwanda which may have wide-ranging effects on Kenya.
“These people are businessmen. They are investors who believe that the environment in Kenya is now not conducive for their investment. Some say they were being offered land in those countries to restart their lives,” said businessman Hassan Arr.
He says some neighbouring countries are quietly trying to attract investors from Eastleigh. The impact is huge as some businessmen we spoke to were either clearing stock before closing shop or were leaving because there is little or no business.
Mr Arr estimates that at least 20,000 businesses have either relocated or are in the process of moving to Dubai, Tanzania, Somalia, Malawi and Mozambique.
As an indication of the slump in business, sources say the more than 10 banks in the area have been hit hard in the aftermath of the security dragnet.
A bank manager who did not want to be named, complained that the Eastleigh branch alone used to transact an average of Sh260 million a day, but after Usalama that began in April, it now does less than Sh4.3 million a day. Remittances from Somalis in the diaspora are also said to have dropped significantly, although no figures were available.
Kenya Bankers Association Chairman Habil Olaka admitted that banks have suffered from the slow business.
“Although no bank accounts have been closed, branches in Eastleigh have seen transactions going down,” he said.
Sources in banking said a group of departing investors intending to relocate to other countries recently withdrew billions of shillings from banks and hawalas — informal funds transfers based on trust — within a few days, attracting the attention of industry regulators and the National Intelligence Service.
Treasury Secretary Henry Rotich did not respond to our inquiries on the claims.
Yesterday, politician Ibrahim Ahmed alias Johnny painted a grim picture of Eastleigh.
“Hotel occupancy is down by 50 per cent. There is joblessness in slums like Mathare (next to Eastleigh) and Kiambiu (adjacent to Buru Buru estate) that depended on Eastleigh residents. The swoop has affected the economy and the social pillars,” says Mr Ahmed.
That drastic changes are taking place in Eastleigh is evident right on the once-crowded streets. It is clear the number of residents and visitors has shrunk, easing the formerly notorious traffic congestion.
What has increased is the number of notices pasted on the gates of high-rise buildings seeking potential tenants with offers of slashed rates. Previously, finding a flat to rent was difficult due to the brisk business in the area.
“A few months ago, a two-bedroom house in some areas cost between Sh30,000 and Sh32,000, but now new tenants are being offered the same for as low as Sh12,000,” said a businessman who did not want to be named.
Our survey indicated that there were days when goodwill for a rental shop in Eastleigh could cost Sh8.7 million, but this has now gone down to as little as Sh700,000 for shops located in prime spots.
Eastleigh Business District Association officials accuse the government of turning a blind eye to the effects of the security swoop on the economy.
“What the government did was to wage an economic war on the people of Eastleigh. It has caused a lot of agony here; how else do you explain the fact that no one from this area has been successfully prosecuted for terror?” said the association’s vice-chairman Hussein Mohamed.
He confirmed that the property market is in free fall and pleaded with city residents not to shun the area.
There is palpable desolation among traders who are not sure when the next customer will come. In the past, Eastleigh was a popular shopping destination for its affordable prices and variety, but this appears to have changed.
“Some residents have relocated to other estates, and customers who frequented this place for their weekly shopping rarely come,” said Mr James Kimani who runs a wholesale shop.
He says if the current situation persists, he will have no option but to relocate.
Even the small-scale traders who used to travel from other parts of the country to replenish their stocks no longer come to Eastleigh as frequently.
“I have lost most of my customers from the countryside because they do not consider this place safe any more,” said Mr Kassam Hassan, a shoe dealer in Eastleigh Section One.
Taxis are also feeling the heat as the number of customers has gone down considerably.
“The raid in Eastleigh has badly hit business. We used to do four to five trips to Eastleigh daily in addition to our regular customers. That has just evaporated. Now, very few people come to Eastleigh, and our Somali customers are nowhere to be seen,” said a taxi driver who identified himself only as Macharia.
Mr Ahmed, who ran for the Nairobi deputy governor’s seat in the last election, argued that the way the operation, thought to be targeting Somalis, was conducted was against the Constitution and human rights.
“Property has been stolen, lives have been shattered and families scattered. Children have been removed from schools. People have run away to start lives elsewhere. But the government has not found what it was looking for,” he said.
Halima Abdi, a mother of four, who was sceptical about the effects of the crackdown, said that in the last two weeks, police have come to her house twice.
“If the police are honest in the way they carry out the crackdowns, I fully support them,” she said, standing behind a half-open door.
“But if it is a matter of coming to ask for money like what they are doing, they should stop disrupting our sleep. They are leaving terrorists to walk free and harassing innocent people.”
The security swoop led to the arrest and locking up of hundreds of people, most of them ethnic Somalis, at Kasarani Stadium. Those who could not show proof of Kenyan citizenship were either deported or sent to refugee camps.
For now, pockets of police officers who remain in the area remind the residents of the dragnet.
Police were back again in droves last Thursday on the opening day of the World Cup to secure bars, restaurants and clubs.