Kenya Airport Fire Burns Regional Economy

While it is no secret that Sub-Saharan Africa has been plagued with poor infrastructure throughout the region’s history, the region’s economic prospects and investment opportunity just took another major hit. On August 7th, a massive fire damaged much of Kenya’s main international airport, Jomo Kenyatta International Airport, causing the airport to close indefinitely with no flights arriving or departing since the blaze was first reported. What made the fire so devastating to the airport was that the Nairobi County fire department did not have a single working fire engine, due to an auction last month where three of their engines were sold in order to pay a $1,000 USD repair bail, which local papers called a “disgrace of biblical proportions.” Despite the physical damage done to Kenya’s major airport, the destruction caused by the flames is unfortunately only the tip of the iceberg when it comes to the economic havoc that this fire most likely will unleash upon developing Sub-Saharan Africa.

First of all, Jomo Kenyatta is one of the top-ten busiest airports in Africa, which handled nearly 6 million passengers in 2011, a 5.8% increase from the year before. Many of those passengers are Western tourists, seeing as the airport is the international gateway for world-famous game parks such as the Masai Mara and Amboseli. The tourism industry is a crucial component for the Kenyan economy, which contributes about 63% of its GDP, and will suffer largely under the economic rubble in the aftermath of the flames, seeing as the summer months are Kenya’s peak season for tourist activity. Furthermore, Kenya generates about $1 billion USD annually from its export of flowers to Europe every year, which has also been disrupted in the trade’s main season.   

Jomo Kenyatta is also the main hub for Kenya Airlines, which serves 49 destinations in 23 countries. Kenya Airlines is a member of SkyTeam as well, which is composed of 19 member airlines that services 1024 different destinations around the globe. I actually flew through Jomo Kenyatta this previous June on my way to Ndola, Zambia via SkyTeam connections, since Jomo was the only airport that directly provided access to Ndola, the main industrial center for Zambia’s vital copper industry. Therefore, as the East African hub for airlines and international travel, this fire has provided a major disruption of the flow of international business, travel, and access to many of Africa’s relatively secluded yet valuable markets.

Infrastructure problems such as this incident have plagued not only Sub-Saharan Africa, but developing countries all over the world for decades. Poor infrastructure limits the ease of doing business, frustrates foreign firms, and ultimately discourages investors away from developing economies like Kenya’s, which unfortunately causes domestic firms and governments to make poor decisions, like auctioning off their fire engines, to fund other public sector projects. In an ever-increasingly globalized economy, the closure of a major African airport will also carry global economic consequences, seeing as the fires have basically closed an entire region in the international, inter-connected supply-chain indefinitely for business opportunities. For developing regions to prevent further losses of investor confidence, they must develop the adequate infrastructure needed to attract investor confidence, increase the ease of doing business, and ultimately achieve economic gains that allow governments to continue funding necessary public projects, such as an effective fire department.