Kenya floods – As costs mount, pressure mounts on country in economic crisis

There were early warnings that Kenya’s long rainy season – between March and May – would bring above-normal rainfall. The extreme intensity of the rain has resulted in devastating floods in many parts of the country.

Forty of the country’s 47 counties have been affected. More than 230 people have died and around 40,000 households have been displaced so far.

Poor maintenance of key infrastructure and drainage systems and disregard of environmental regulations regarding maintenance of land near rivers contributed to the situation.

The government has responded with measures to minimize destruction and secure lives. These include evacuation orders for households living close to dams and water reservoirs in 33 counties, and forced eviction of those living near rivers. President William Ruto has also announced welfare support for displaced households.

The effects of the floods will have a massive impact on Kenya’s economy. I am a development economist with 20 years of experience in development planning, policy implementation and research. I have also worked with National Treasury and Economic Planning.

I am particularly concerned about these things: damage to transport infrastructure, which will affect the prices of goods and services; destruction of crops, which will affect food security; and business losses, which will affect household incomes and consumer purchasing power.

The cost of repairing what is broken will also have a major impact on the country’s already stretched budget.

The influences

Infrastructure destroyed

A large part of the infrastructure has been affected.

In addition to roads, some dams, airports and water infrastructure will require maintenance.

Flooding and a landslide on the rail route between the capital Nairobi and Mombasa forced Kenya Railways to close all freight services. Nairobi satellite commuter train services were also suspended.

Currently, 58 roads have been reported destroyed. Some of these roads are key highways such as Kapenguria-Lokichar-Lodwar highway, Nakuru-Eldoret road and Oletepesi-Magadi road. The Nakuru-Eldoret road also connects Uganda, Rwanda and Congo.

The road disruptions will immediately increase transport costs as goods will take longer routes. This will have an effect on businesses in the transport, wholesale and retail sectors.

The rain has also affected service infrastructure – such as water pipelines in Nairobi – and filled up dams. In a tragic incident, a dam in Kijabe burst its banks, flooding villages and killing at least 40 people in the Mai Mahiu area.

The destruction of infrastructure will have a large economic impact. Assessments from the last major flood in 2018 show that the government had to allocate an additional US$120 million (24% of the previous year’s budget) to road infrastructure repairs and maintenance.

The repairs were not immediate and sometimes they were not carried out at all. The effects could be felt for years.

Cropland destroyed

Kenya’s agricultural sector has also been hit hard. Agriculture is vital to the economy, accounting for around 33% of the country’s GDP and employing 40% of the total workforce. It is a critical source of livelihood and income for millions of Kenyans.

About 40,000 acres (16,187 hectares) of cropland have already been reported to have been destroyed. In the 2018 floods, it was estimated that around 21,000 hectares of crops were destroyed, posing a threat to food security. The impact of the floods on Kenya’s agriculture was significant, with estimates suggesting billions of Kenyan shillings in crop damage and lost production. In addition, the floods triggered landslides and soil erosion.

This time twice as much land is affected. Farmers in affected areas face total crop failure, their entire livelihood washed away. The flooding of 2,000 acres of the Mwea Irrigation Scheme, for example, is likely to result in losses of KSh60 million (about US$445,000) in lost crops. This does not include the loss to businesses that would have used the crop.

So far, the basket regions – where most of the staple food production takes place – have been spared the worst of the flooding. However, there is a very high probability that perishable crops such as vegetables and pulses will record very low yields. They have shorter maturity and may have become waterlogged or swept away.

The effect on food security is likely to be felt much longer. Although Kenya has not yet estimated the effect of the floods on food production, Tanzania – which exports food to Kenya – estimates that the floods will cause a 30% drop in production this year. Food prices are likely to remain high.

Costs to the wallet

Kenya’s economy is still recovering from shocks that include high debt distress, global food inflation and exchange rate shocks.

Read more: Kenya’s shilling regains value, but don’t expect it to last – expert

The budget estimates for the next financial year reveal that the government has a delicate balance in trying to meet commitments as well as stimulate key sectors of the economy.

To meet emergency response to the flood situation, the government has submitted a supplementary budget of Ksh11 billion (about US$80 million) to the National Assembly for approval. All of this is likely to be used to provide direct support to households, resettle displaced households and reconstruct infrastructure such as schools and health facilities.

The government is already struggling to meet revenue targets due to a slowdown in economic performance. The overall reconstruction will cost much more and will divert resources from other sectors.

Better preparation

Overall, the current flood will have long-term effects on the economy. The cover depends on the choices the politicians make. A balance must be maintained between reconstruction efforts and support for productive sectors of the economy, while offering support to those who have been affected.

There is a need to learn from the current disaster to better prepare for the next climate shock.

First, the disaster preparedness of county governments must be strengthened. For example, stormwater drainage – responsible for much of the flooding in urban areas – is a county government function.

Read more: Kenya’s devastating floods reveal decades of poor urban planning and poor land management

Second, there is a need for better coordination between government and non-government actors to ensure more efficient use of resources to support affected households.

Third, as climate shocks become more frequent, there is a need to invest in better weather forecasts and early warning systems. Then the recommendations from these systems must be acted upon immediately, including training of households in disaster-prone areas.

Fourth, there is a need for better planning in urban areas. This includes proper maintenance of roads, bridges and drainage infrastructure, compliance with building regulations and standards and environmental regulations – such as the protection of river basins.

Finally, investing in generating and accessing data can help inform responses and improve post-disaster recovery planning.

Timothy Njagi Njeru, Research Fellow, Tegemeo Institute, Egerton University

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