El Niño will wreak economic havoc if not managed

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This article first appeared in my weekly column with the Business Daily on October 11, 2015

Kenya will be subjected to heavy El Niño rains that will start at the end of this month. The government requires Sh15.5 billion to deal with any emergencies arising from the El Niño rains but thus far only Sh5 billion and Sh20 million from each county has been set aside for the fund. That leaves a leaves deficit of about Sh10 billion. However, several international agencies have pledged to support the El Niño mitigation plans and have committed Sh 3.5 billion, part of which can be used by government. It is crucial to understand why these funds are needed and must be used appropriately because if mitigation and disaster relief plans are not implemented, the economic consequences will be dire.


(source: http://www.kenyans.co.ke/files/images/news/waah.jpg)

The first way in which El Niño will cause economic problems is through the devastation of infrastructure. The rains earlier this year were not even of the scale expected from El Niño yet they ravaged infrastructure; bridges were swept away, roads were flooded and roads collapsed. To understand the scale of this issue note that the 1997/98 El Niño episode is estimated to have caused damage worth more than $1.2 billion in Kenya in infrastructure and crop destruction alone. That damage translates to funds required to do emergency repairs but more importantly collapsed infrastructure becomes non-functioning infrastructure that prevents individuals from engaging in economically productive activities as they cannot get to and from places of work and business. Further, damage to infrastructure has long-term impacts, such as damage to sanitation infrastructure and disruptions in communication links, clean water and electricity supply. The more severe the damage, the longer Kenyans will be held hostage unable to conduct business as usual causing economic activities to come to a standstill. This then translates into a loss of livelihood for millions of Kenyans.

Secondly is the damage to property that the rains will have on land, houses, businesses, offices, and vehicles. Economically productive assets worth billions, be they be in agriculture, services or industry are likely to be damaged and the spill over effects on the loss of livelihoods will be felt in commercial activities even in adjacent non-flooded areas.

(source: http://streamafrica.com/wp-content/uploads/2015/10/kenya-elnino-648×372.png)

Thirdly, is the physical dislocation that many will experience as they are forced to leave their homes, businesses and places of work. Kenyans will be unable to be economically productive and this will dampen the economic growth of not only the affected areas, but the country as a whole.

Fourthly, is the impact on agricultural activities in the destruction of crops and loss of livestock. This will make Kenya more food insecure a fact exacerbated by the fact that the heavy El Niño rains may be followed with a long period of drought. There are therefore likely to be long-term consequences on food production activities leading to losses of income by farmers. But more importantly the impact of food production will put millions of Kenyans at higher risk of being food insecure; and food insecure Kenyans cannot be economically productive Kenyans.

El Niño will also have healthcare implications as there is likely to be a deterioration in health conditions due to waterborne diseases such as Amoebiasis, Giardia and Cholera which cause physical debilitation and even deaths. The last rains earlier this year caused Cholera outbreaks across the country, will this be repeated with El Niño? Once more, disease ridden Kenyans cannot be economically productive.

Finally, the high cost of relief means that money has to be diverted away from development into disaster preparation and mitigation. Thus funds that may have bolstered economic activities will be redirected to manage El Niño. This essentially translates into a loss of resources from productive activities to disaster relief and this will dampen the momentum of the economy.

(source: https://zurukenya.files.wordpress.com/2013/12/money-shilling.jpg?w=474)

Clearly the impact of El Niño will be felt by Kenya’s people and economy. Thus, the El Niño Fund and support from international partners is crucial to ensure that the rains are managed to limit the negative impacts to the greatest extent possible.

Anzetse Were is a development economist; email: anzetsew@gmail.com


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