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Project Report on
Strengthening Community Resilience against Radicalization & Violent Extremism
Sub Theme: An Assessment of the Economic Impact of Terror Activities in Specific Locales
June, 2017
Institute of Diplomacy and International Studies
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Acknowledgement
The Institute of Diplomacy and International Studies (IDIS) of the University of Nairobi in
partnership with the Africa Policy Institute (API) acknowledges the support of the Japan
Government in funding this project, through United Nations Development Programme
(UNDP).This study, on Strengthening Community’s Resilience against Radicalization and Violent
Extremism undertaken in the months of May and June 2017, would not have been a success
without the financial and technical support from the two partners.
We also wish to acknowledge the contribution and dedication of the team of experts namely: Prof.
Amb. Maria Nzomo, the Lead Consultant, Prof. Peter Kagwanja Associate Lead consultant, and
the three consultants: Dr. Patrick Maluki, Dr. Robert Kagiri and Dr. Wilson Muna for effectively
managing the entire research process. We owe the success of this study to the data collectors,
analysts, the rapporteurs, and the project administrators for data management and project
coordination toward the production of the final document.
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About the Authors
Prof. Amb. Maria Nzomo
Director, Institute of Diplomacy and International Studies
Prof. Maria Nzomo is currently the Director of the Institute of Diplomacy and International Studies
and also a Professor of International Relations and Governance at the University of Nairobi. She
holds the distinction of being the first Kenyan woman to attain a PhD in political science, which
she earned in 1981 from Dalhousie University in Canada. With over 30 years of teaching
experience at the University of Nairobi, starting out as a Tutorial Fellow in 1979, she rose up the
ranks to become an Associate Professor of political economy and international studies in1995.
Prof. Nzomo is widely recognized both locally and internationally as a sapiential authority in
political science and international studies. Between October 2003 and January 2009, she held a
number of ambassadorial posts in southern Africa (Lesotho, Mozambique, Swaziland and
Zimbabwe) and at the United Nations. In 2006, she was appointed the Kenyan Ambassador and
Permanent Representative to the United Nations in Geneva, Switzerland, a position she holds to
date. Prof. Nzomo is also recognized as an ardent promoter of gender and human rights and has
published several articles on these subjects in peer-reviewed journals as well as newspapers and
magazines.
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Prof Peter Kagwanja
Chief Executive – Africa Policy Institute (API)
Prof. Peter Kagwanja is a Kenyan intellectual and expert on security, governance and strategic
issues. He is the founding President and Chief Executive of the Africa Policy Institute (API). Since
2013, Prof. Kagwanja has served as a visiting scholar at the Institute of Diplomacy and
International Studies (IDIS), University of Nairobi and at the National Defense College (Kenya).
Between 2008-2013, he served as an adviser to the Government of President Mwai Kibaki on the
Reform Agenda under the National Accord and Reconciliation Act (2008). In 2010, he was
appointed Executive Director of the National Secretariat on the Referendum for Kenya New
Constitution. He continues to serve as consultant for the Government of Kenya, the African Union
and a number of Africa international partners. Prior to this, Prof. Kagwanja was Director at the
International Crisis Group, Brussels (2004-2007); and Executive Director of Governance and
Democracy Programme at the Human Science Research Council (HSRC) (2007-2008). He has
been a visiting scholar at Rhodes University, University of Pretoria, University of Illinois, Oxford
University and University of Leiden, among others. Prof. Kagwanja holds a PhD from the
University of Illinois at Urbana-Champaign (USA). His latest book is: Eye on the Nation: Trials
and Triumphs of Democracy in Kenya (2015).
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Dr. Wilson Muna
Consultant – Africa Policy Institute (API)
Dr. Muna is the Coordinator of Tafiti Center for Security Policy as well as China-Africa
Programme at Africa Policy Institute. He is also a lecturer at Kenyatta University. Previously, he
worked as a Project Manager Consultant for government projects in South Africa. He holds a PhD
and a Master’s Degree of Social Sciences in Policy and Development Studies from the University
of KwaZulu-Natal, South Africa. He specializes in public policy analysis; peace and security;
governance and democracy; project management; social facilitation, research design and statistics;
monitoring and evaluation; public policy management; mentoring and training on public policy
and civil society. Some of his publications include: (i) Challenges of relationships and social
identities: The paradox of consequences of Kenya’s military intervention in Somalia (Book
Chapter: The New African Civil and Military Relations: International African Studies’
Perspectives: ISBN 978-0-620-61527-3). (ii) Deconstructing Intergenerational Politics between
‘Young Turks’ and ‘Old Guards’ in Africa: an exploration of the perceptions on leadership and
governance in Kenya; by the Journal of Youth Studies; and (iii) Monetary Clout and Electoral
Politics in Kenya: The 1992 to 2013 Presidential Elections in Focus (Published by the Journal of
African Elections, vol. 13, no 2.)
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Dr. Patrick Maluki
Lecturer – Institute of Diplomacy and International Studies
Dr. Patrick Maluki holds a PhD in Peace and Conflict Studies, a Masters degree in International
Studies, a PGD in Mass Communication and a Bachelors Degree in Education. He is an
experienced trainer and researcher in diplomacy and international Conflict management,
international negotiation, mediation, human rights and governance and peace building. He is a
lecturer at the Institute of Diplomacy and International Studies, University of Nairobi and at the
National Defense College (Karen). Dr. Maluki has carried out academic research and published
extensively. In 2012, he conducted a baseline survey on the status of human rights in Kenya and
in 2013, carried out a research on the gender dimension of international terrorism. Dr. Maluki has
authored a number of books: Maritime Security and Resource Exploitation: A New Frontier For
Kenya’s Maritime Diplomacy (forth coming); Peace Building Strategies and Sustainable Peace in
Rwanda and Burundi; Combating new Piracy in the Indian Ocean; Role of Parliament in
Peacebuilding; The Indian Ocean Rim: Order, cooperation and Community; and Communication
strategies in Disaster Management.
Dr. Maluki has equally contributed chapters in books and published articles in Peer reviewed
Journals. His Book Chapters include: ‘Building Trust in post-conflict societies: the human rights
and peace building lessons learned in Mt. Elgon’ in Bad Andreassen et al Poverty and Human
Rights 2017, Focus Publishers; ‘Piracy as a Threat to Maritime Security in the Indian Ocean’, in
Makumi Mwangiru and Aparajia Biswas (eds) East Africa-India Security Relations, Nairobi:
IDIS/PRIASA; “The Implications of Al shabaab and Small Arms and Light Weapons in Security
of Horn of Africa: A Focus on Kenya”. In Vidya Jain and Matt Meyer (eds) Satyagraha / Ujamaa:
Connecting Contemporary African-Asian Peacemaking and Nonviolence.
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Dr. Maluki’s peer reviewed journals articles are: Radicalization and Militarization of Refugees as
a Challenge to International Security (J-STEM, 2016 forth coming);International Education
Exchanges as a Diplomacy Instrument (IJSAC 2016); Why the World can’t stand by as Burundi
becomes a failed state (the Conversation.com 2015); ‘Arms Proliferation, Disarmament and
Human Security in the Horn of Africa’ (J-STEM Vol.6. No.1 and 2; 2014); Why We Need a
Politician Champion in the Management of State Affairs (the People Daily 2013); ‘The challenge
of reconciliation in post-conflict Sudan’. (J-STEM Vol.3 No.1&2, 2012); Book review; Peace and
Conflict Studies in a global context by P.G Okoth, (J-STEM Vol.3 No.1&2, 2012).
Dr. Robert Kagiri
Director of Center for Strategy and Political Management
Dr. Robert Kagiri is the Director of the Center for Strategy and Political Management of the Africa
Policy Institute, and a part-time lecturer at the University of Nairobi, Institute of Diplomacy and
International Studies and Kenyatta University, School of Security, Diplomacy and Peace Studies,
Department of Security and Correctional Sciences. Dr. Kagiri specializes in Strategy, Governance,
Media and Policy Management and has worked as Programme Officer for Strategy at the
Transition Authority of Kenya, a university lecturer at Moi University (Media and Publishing),
Snr. Lecturer Grestsa University and Management University of Africa (Business and Leadership-
Marketing Management) and as strategy, media and management consultant. He also lectures on
Public Policy Analysis and Public Administration for the Masters course on Strategic Leadership
and Command at Kenya Police Staff College, Loresho, a programme of Kenyatta University.
He holds a Ph.D. in Strategic Management from the School of Business, University of Nairobi; a
Master’s degree in Business Management from University of Central Missouri; a Master of
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Science in Publishing from Pace University, New York; and a Bachelors in Commerce from Ohio
Wesleyan University. He also holds a Diploma in Humanitarian Diplomacy from Diplomo
Institute, University of Malta in collaboration with the International Red Cross/Red Crescent
Societies and is a member of the Kenya Institute of Management (MKIM).
Dr. Kagiri is widely published and has convened numerous Strategy and Policy forums including:
Maendeleo Policy Forum I, II & III – on Election Preparedness, Election Security, the Media and
Youth, - API and UNDP, Seminar on Investing In Soft Power Capacity: China-Africa Think Tank
Cooperation”, hosted by the Embassy of the Republic of China to the Republic of Kenya, China
Academy of Social Sciences and Africa Policy Institute; Policy Dialogue on the Kenya
Humanitarian Assistance, Framework, Ministry of Foreign Affairs and International Trade, UN -
OCHA, and Africa Policy Institute. [Nairobi, Kenya] and delivered a paper on Maritime Security
in the Horn of Africa at an IGAD, API and Shanghai Institutes of International Studies (SIIS)
conference in Shanghai, China.
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Contents About the Authors ........................................................................................................................................ 3
1.0 Introduction to Research Landscape .................................................................................................... 10
1.1 Terrorism in Kenya ............................................................................................................................ 10
1.1.1 Radicalization ................................................................................................................................. 11
1.1.2 Violent Extremism .......................................................................................................................... 12
2.0 Research Study ................................................................................................................................ 14
2.1The Economic Impact of Terror Activities .......................................................................................... 15
2.2 Research Variables on the Economic Impact of Terror Activities in Specific Locales ................... 19
3.0 Research Methodology ................................................................................................................... 20
3.1 Research Design ................................................................................................................................ 20
3.2 Research Approach ........................................................................................................................... 21
3.3 Research Population ......................................................................................................................... 21
3.4 Sample Population ............................................................................................................................ 22
3.5 Date Collection Methods .................................................................................................................. 22
3.5.1 Literature Review ....................................................................................................................... 22
3.5.2 Interviews ................................................................................................................................... 23
3.5.3 Questionnaires ........................................................................................................................... 23
3.6 Data Analysis ..................................................................................................................................... 23
4.0 Key Findings from Field Research ......................................................................................................... 24
5.0 Cross tabulation of the economic impact in the counties .................................................................... 29
6.0 Conclusions ........................................................................................................................................... 42
7.0 Recommendations ................................................................................................................................ 43
Bibliography ................................................................................................................................................ 45
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1.0 Introduction to Research Landscape This study focuses on assessing the economic impact of terror activities in eight
target high-at-risk Counties in the Northern Kenya border region, the coastline
border region of Kenya and parts of Nairobi. Specifically, the research covered
nine coastal counties including Mombasa, Kilifi, Tana River, Lamu, Garissa,
Kwale, Mandera, Wajir and Nairobi. The data was collected using structured
questionnaires and in-depth interviews with full disclosure as to the nature,
rationale and purpose of the exercise. Both the questionnaires and the in-depth
interviews have been analysed and the results tabled in this report.
Purposive sampling technique was employed targeting key informants who deal with
security matters, the business community, religious leaders and non-governmental
organizations to help establish the economic impact of terrorist activities.
1.1 Terrorism in Kenya
The global surge of terrorist attacks by groups linked to either al-Qaeda or ISIS in
the last decade has necessitated a critical review of our understanding of related
concepts and actors that lead to radicalization, violent extremism and terrorism. It
has also inspired an intense clarification of the meaning of approaches adopted in
responding to such threats within the frameworks of countering violent extremism
and terrorism.
This working document examines the concepts used and adopted globally in regards
to violent extremism and terrorism. Concepts on terrorism and violent extremism
have largely been generated by researchers and stakeholders in Western nations.
However, the need to have an indigenous understanding of the concepts based on an
African experience has recently caught traction in developing strategies for
countering violent extremism. The manner in which we define and perceive the
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phenomena is critically important in determining the responses we recommend. As
such, a succinct conceptualization of phenomena toward violent extremism and
terrorism is an important stage if we are to devise effective and efficient means and
tactics to address the causes and threats posed by these trends.
1.1.1 Radicalization
Radicalization is not a new phenomenon and is viewed as a process through which
a group has been mobilized in pursuit of social or political objective but has failed
to make enough progress towards the objective to satisfy all activists. Some become
disillusioned and discouraged while others intensify their efforts, lose patience with
conventional means and look for tactics that will have greater impact.1 The most
recent debate challenges the notion that radicalization is caused by poverty or
illiteracy.
However, “politicization of religion” and “religionisation of politics” has been
established as the most credible link. This is because, part of the problem in the
radicalization process is associated with the weakness of the state and its inability to
penetrate society that has a complex web between religion and politics. Indeed,
islamists, political extremists, and charismatic radicals exploit these weaknesses, and
the arising grievances to radicalize youth.
Of great concern is the sophistication of the nature in which terrorists and extremists
act. Apparently, their execution of plans demonstrate that they are usually a step
ahead of policy makers and security state agencies as they constantly morph into
different forms and contexts. They have managed to diversify in the use of modern
platforms of mass communication such as the social media to appeal to the youth. In
essence, radicalization aims at imparting a new reality by questioning values and
1 Gurr, T.R. (1990). Terrorism in Democracies: its social and political base, in W. Reich (ed.), Origins of Terrorism: Psychologies, ideologies, theologies, state of mind, (Washington DC: Woodrow Wilson Centre Press)
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beliefs of societies. Hence, it can be summed that the campaign against radicalization
is a battle of values and ideas.
1.1.2 Violent Extremism
Extremism is an activity embedded and characterized with attitudes, feelings, actions
and practices that are far above from being ordinary2. Since there are no standardized
bases for the measure of extremism, the term is said to be rational. In other words,
based on the calculable reason on an individual, it is clear that an individual/group
viewed as extremists might view others as extremists. Thus, this necessitates the
need to benchmark,3 the normalcy of the ordinary activity to acts that are considered
to be above normal.
As a concept, as a concept defining a phenomenon, violent extremism refers to the
beliefs and actions of people who support or use violence to achieve ideological,
religious or political goals. Although the term is widely used synonymously with
“terrorism”, violent extremism is here considered as a more inclusive term, which
generically encompasses terrorism and other forms of politically inspired, sectarian
or communal violence. Perpetrators of this form of violence seek to achieve
ideological, political or social change by resorting to and justifying the use of fear,
intimidation and terror rather than peaceful means to address grievances.4 In other
words, violent extremists advocate, engage in, prepare, or otherwise support
2 Peter T. Coleman and Andrea Bartle, Addressing Extremism, White Paper. New York: The International Center for Cooperation and Conflict Resolution, Colombia University, p. 1. 3 See ‘Twenty Indicators for Monitoring Extremism’ in Alex, P. Schmidt., Violent and Non-Violent Extremism: Two Sides of the Same Coin? (ICCT Research Paper, May, 2014). P21-22. Retrieved on 01 January , 2016 from http://www.icct.nl/download/file/ICCT-Schmid-Violent-Non-Violent-Extremism-May-2014.pdf 4 This definition is widely adopted to guide policy and action by many governments, see for example Australian Government, “What is Violent Extremism?” https://www.livingsafetogether.gov.au/aboutus/Documents/what-is-violent-extremism.pdf, Retrieved October 30, 2016.
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ideologically motivated or justified violence to further social, economic, political
objectives which are achievable peacefully through dialogue.5
The display of this extremism can be observed in two forms: non-Violent Extremism
and Violent Extremism (VE). The former is usually an activist modelled strategy
like strikes, hunger-strikes, sit-ins, demonstrations, blockades, acts of civil
disobedience, among other forms of non-coercive and persuasive tactics; while the
latter involves tactics that regards destruction of lives and properties as necessary,
useful, heroic and justified.6
More often, violence is opted for in order to inflict much damage as possible,
decrease public confidence on the government, undermine delivery of public goods,
disrupt social functions of the society, create fear and steer weak/depressed emotions
that psychologically affects the populace7. The failure of past political ideologies
like Pan-Africanism, Pan-Arabism, Marxism, Socialism, Nationalism, and strict
religious fundamentalism have created more radicals that challenge the status quo in
an effort to revert to the social and environmental conditions in mandate of their
ideology.
5 This particular interpretation forms the kernel of the United Nations Secretary General’s Plan of Action to Prevent Violent Extremism (January 2016) as well as the Department of State & USAID Joint Strategy on Countering Violent Extremism (Washington, May 2016). 6 Alex, P. Schmid., (2014). Op.cit. p13. 7 Ardila, R., The Psychology of the Terrorist: Behavioral Perspective. In C. Stout (Ed.), The Psychology of Terrorism: A Public Understanding [Psychological Dimension to War and Peace] (Vol. III). Connecticut: Praeger (2002); Furnish, T., Beheading in the name of Islam. Middle East Quarterly, 2, 51-57(2005); Hudson, R., The Sociology and Psychology of Terrorism: Who Becomes a Terrorist and Why? Washington, DC: Federal Research Division. (1999); Lawal, O., Social-psychological considerations in the emergence and growth of terrorism. In C. Stout (Ed.), The Psychology of Terrorism: Programs and Practices in Response and Prevention [Psychological Dimension to War and Peace]. Connecticut: Praeger. (2002); McCauley, C., Psychological Issues in Understanding Terrorism and the Response to Terrorism. In C. Stout (Ed.), The Psychology of Terrorism: Theoretical Understandings and Perspectives [Psychological Dimension to War and Peace] (Vol. III, pp. 3-29). Connecticut: Praeger. (2002); Reid, W., Controlling Political Terrorism: Practicality, not Psychology. In C. Stout (Ed.), The Psychology of Terrorism: A Public Understanding [Psychological Dimension to War and Peace] (Vol. I). Connecticut: Praeger. (2002); Thackrah, J., Dictionary of Terrorism (2nd Ed.). United Kingdom: Routledge. (2004)
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First is the need to identify and disrupt strategies and tactics that violent extremists
are using to attract, radicalize and recruit to violence. Second is to construct
alternative narratives and capabilities to enable at-risk communities, groups or
individuals in the region to resist radicalization to violence. This entails the use of
non-coercive means to de-legitimize the ideologies of violent extremists in order to
reduce the number of terrorist groups, supporters and recruits.
Third is to ensure that the fight against violent extremism does not undermine the
efforts to consolidate democracy, including good governance, human rights and the
rule of law to underpin inclusive and sustainable development across the region.
Related to this quest for justice and democratic consolidation, this strategy treats
violent extremism as distinct from Islamism and as not necessarily tied to any
particular ideology, region religion or set of beliefs.
2.0 Research Study This study seeks to establish ways of strengthening community’s resilience
against radicalization and violent extremism by assessing the economic impact
of terror activities in eight target high-at-risk Counties in the Northern Kenya
border regions (Garissa, Mandera and Wajir); the coastline border region of
Kenya (Kilifi, Kwale, Tana River, Lamu and Mombasa) and parts of Nairobi.
Economic growth can help build resilience against violent extremism while
adverse economic effects and have the effect of encouraging both radicalization
and violent extremism,
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2.1The Economic Impact of Terror Activities
Terrorism imposes significant economic effects on societies and will not only lead
to direct material damage, but also long term effects on the local economy. The
identification and the estimation of these economic effects of terrorism has received
broad attention in economic literature and research. Economists use various
definitions and terminology for categorising the economic impact of terrorism. The
two main categories are the primary and secondary economic impact of terrorism,
also referred to as direct and indirect economic effects8.
Primary economic impact of terrorism “refers to the effects arising from the
immediate aftermath of a terrorist event”. These effects include the physical
destruction of urban objects, and the human casualties (injuries and losses of human
life). For instance, the October 2002 bombing on Bali cost more than 200 people
their lives and resulted in a decline in tourism that seriously damaged a dynamic and
prosperous economy. However, it is impossible to quantify the magnitude of the
changes and identify the subgroups most affected without representative data from
before and after the bombing.9
On a micro-economic level, terrorist events influence three main types of economic
actors, namely: individual households, the private sector (companies), and the public
authorities. There is not much available literature when it comes to the primary costs
that households experience due to terrorism itself. Other empirical research found
out that terrorism will produce more fear than other, more probable risks and in the
case of females, the religiously devout, those equipped with better memory, closer
to where the events occur, and those with less education worry a lot about their
8 Nazar Yanchynskyy (2015) Terrorism: Impact on the Economy
9 http://siteresources.worldbank.org/INTKNOWLEDGEFORCHANGE/Resources/491519-
1193429621722/Individual_Family_and_Household_Responses.pdf
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safety. Furthermore, single men are less likely to own businesses as a result of
insecurity and there is a shift from recreational expenditures towards those expenses
that can help one cope with the effects of insecurity resulting from terrorism.10
Businesses and firms, especially the ones operating to or from insecure countries,
are frequent victims of terrorist events. According to the German security
economists11, this is also due to the fact that public buildings are better protected in
general. The actual direct losses of terrorism depend on the nature of the attack
(property damage or ransom payments for hostages), but overall 12conclude that
most sectors recover quickly, given that the economy does not face sustained
terrorist attacks, like in Israel and Northern Ireland. There is not much literature
available on this subject. The costs arising from physical destruction from small-
scale terrorist events are not structurally measured.
Costs for the public sector arise whenever public infrastructure or buildings are
destroyed (including military structures and equipment), but are generally
considered to be relatively small. Moreover, terrorism forces local and national
authorities to spend billions on the prevention of terrorism and the detection,
prosecution and punishment of terrorists.
Due to a terrorist event, these economic agents suffer from impact through losses in
physical and human capital, and, at the same time, they themselves may influence
the economy through their immediate responses to the violent shock that occurred.
10 http://www.csef.it/WP/wp213.pdf 11 See Schneider, T. Brück and D. Meierrieks, (2010) 'The Economics of Terrorism and Counter-Terrorism: A Survey (Part II), Social Science Research Network
12 Sandler, Todd and Walter Enders (2008). “Economic Consequences of Terrorism in Developed and Developing Countries: An Overview” in Philip Keefer and Norman Loayza, eds. Terrorism, Economic Development, and Political Openness(Cambridge Univ. Press: Cambridge, U.K.) pp, 17 – 47.
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Secondary economic impact of terrorism will not only cause primary economic
impact, but will also produce considerable secondary (or indirect) impact. This
secondary economic impact is the result of an interdependent economic system in
which terrorist attacks cause the disruption of economic entities which have not been
direct targets of the attack. The indirect economic aspects of terrorist events that
systematically influence tourists' choice of destination and can, therefore,
substantially negatively affect a host country. Moreover, the effect is long-lasting
and has also an impact on the demand for tourism in neighboring countries13.
In terms of foreign direct investment countries like Spain and Greece saw their
foreign direct investments (FDI) decreased in the period 1975 - 1991 due to a series
of terrorist events14. Even when terrorist attacks destroy only a small fraction of the
productive capital of a country, the level of international investment and commerce
across industries is greatly affected either negatively or positively by increases in
terrorist risk15. For instance a study in Israel illustrated that terrorism had a
significant negative impact on non-defense related companies and a significant
positive impact on defense and security-related companies16.
The consumption and saving rates, may be affected by terrorism, but according to
Frey et al. (2004), it is still unclear if this effect is positive or negative. Next to
(macro) economic stability, political stability is generally recognized as the most
important factors that determine investments in a local economy. Not only the
13 Frey, Bruno S., Simon Luechinger and Alois Stutzer (2004). “Calculating Tragedy: Assessing the Costs of Terrorism,”
Working Paper 205, Institute for Empirical Research in Economics, University of Zurich.
14 Enders, Walter and Todd Sandler (1996). “Terrorism and Foreign Direct Investment in Spain and Greece,” Kyklos
49:331-52.
15 Abadie, Alberto and Javier Gardeazabal (2005) “Terrorism and the World Economy” Working Paper.
16 Berrebi, C. and Klor, E. (2005) “The Impact of Terrorism Across Industries: An Empirical Study” Working Paper
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amount of investments are influenced by terrorist events, but also the investment
composition, in particular investments in machinery and equipment.
The impact of terrorist events on financial markets is a common phenomenon. Since
share prices theoretically reflect expected future gains of a company, a terrorist
attack will negatively influence the share prices since expected profits will decline
if security measures increase the costs of production and transactional costs, and
consumers decrease their consumption. The risk premium will increase due to the
increased uncertainty about a firm's prospects on the market. On the other hand,
share prices already reflect expected terrorist attacks before any actually occurs. So,
the conclusion is that only single unexpected events or an unexpected intensification
will lead to negative effects.
Terrorist events not only increase the sense of insecurity and uncertainty for foreign
traders, but also increase transaction costs due to augmented security measures and
can lead to the destruction of export goodIn addition, countries that are targeted by
terrorism, will trade less with each other than countries not affected by terrorism17.
Moreover, these effects are large because doubling of the number of terrorist events
reduces bilateral trade flows by 4 percent.
Terrorism may also be a substitute for other forms of political conflict in the internal
fight over resources.18 The overall effect of terrorism on economic national income
and growth can only be determined when it is known how an economy would have
developed without the terrorist event. An assessment of these differences surmises
that the effects of terrorism on the economic growth are small and only statistically
17 Nitsch, Volker and Dieter Schumacher (2004). “Terrorism and International Trade: An Empirical Investigation,”
European Journal of Political Economy 20:423-33 18 Blomberg, S. Brock, Gregory D. Hess, and Akila Weerapana (2004), “Economic Conditions and Terrorism,” European Journal of Political Economy, 20(2), 463-78
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significant for development countries, and not for the more advanced Organisation
for Economic Co-operation and Development (OECD) countries.19
2.2 Research Variables on the Economic Impact of Terror Activities in Specific
Locales
The effects of terrorist activities have an economic impact through:
a) Psychological and emotional suffering of families that have been directly
affected through lost lives, injury, trauma and anxiety among Kenyans thus
impacting on economic productivity and contributing to direct economic
losses.
b) Crippling of the tourism sector by decreasing the influx of tourists particularly
following travel advisories and bans imposed by Western countries leading to
unemployment particularly in the hospitality industry due to dwindling
revenues.
It is notable that the economic implications of the decline in tourism extend
beyond the direct effect of fewer jobs in hotels, restaurants and other service
industries leading to declines in demand for food and handicrafts and affecting
those employed in the agricultural and manufacturing sectors. Furthermore
lower incomes among workers in tourist-related activities has had a domino
effect on demand for all goods and services throughout the economy.20
c) Reduction in other forms of international commerce, trade and direct foreign
investments
19 Blomberg, S. Brock, Gregory D. Hess, and Athanasios Orphanides (2004), “The Macroeconomic Consequences of Terrorism,” Journal of Monetary Economics, 51(5), 1007-32
20 http://paa2004.princeton.edu/papers/41398
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d) Indirect economic costs of running business resulting from installation of
sophisticated surveillance gadgets and expert personnel in addition to
increasing the cost of marketing Kenya as a tourist destination. The indirect
effects of terrorism (that is, the changes in risk, transaction costs, demand,
public finances and growth) may outweigh the direct effects21.
e) Increased cost of living due to over-commitment of the national budget to
homeland security.
3.0 Research Methodology Desk and literature reviews included proceedings from forums held along the themes
under study in order to derive both primary and secondary data. The research design
for the primary data included interviews, focus groups and observation covering the
eight target counties. Survey instruments, including semi-structure interview, focus
group discussions, and observation guides were developed and the research took
place over a six week period. Both quantitative and qualitative data was collected in
a scientific and standardized manner.
3.1 Research Design
This research project employed descriptive research approach and guided by its
underlying assumptions. According to Burns and Grove22, descriptive research is
‘designed to provide a picture of a situation as it naturally happens’. This strand of
research design expounds on the beliefs, knowledge and opinions of individuals with
regards to a particular subject. For the purposes of this project, descriptive research
will be used to obtain a picture of the economic cost of terrorism in Kenya, and the
21 Brück, T. and Bengt-Arne Wickström (2004) “The Economic Consequences of Terror: A Brief Survey” Working
Paper.
22 Nancy Burns and Susan Grove, Understanding Nursing Research: Building and Evidence-Based Practice, 5th Edition, (2011). Marylland Heights, MO: Elsevier Inc.
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nature and impact of programs and strategies of de-radicalization and disengagement
in Kenya with a view of providing a responsive constructive approach.
3.2 Research Approach
This project assumed a triangulation approach where both qualitative and
quantitative approaches will be employed. In this approach, the researchers sought
to understand the phenomenon under study from the perspective of those who
experienced it23. According to Flick24, ‘triangulation’ refers to the observation of a
research phenomenon (at least) from two different points. Triangulation is mainly
done as a process of validating procedures and results of empirical social research.
“Triangulation of data” is therefore viewed as the use of various methods to collect
data to understand a single phenomenon, and that the data is sourced from different
people differently25.
Through literature reviews, administration of questionnaires, and interviews, this
research project looked for a deeper understanding of the impact of disengagement
and rehabilitation programmes for returnees, and the economic cost of terrorism in
nine target high-at-risk counties in the Northern Kenya border regions (Garissa,
Mandera and Wajir); the coastline border region of Kenya (Kilifi, Kwale, Tana
River, Lamu and Mombasa) and Nairobi.
3.3 Research Population
Burns and Grove26 understand target population as all the elements that meet the
criteria for inclusion in a study. For the purpose of this project, the target population
23 Vaismoradi, Mojtaba, Hannele Turunen, and Terese Bondas. "Content analysis and thematic analysis: Implications for
conducting a qualitative descriptive study." Nursing & health sciences 15.3 (2013). 24 Flick, U. Triangulation in qualitative research, in Flick, U., Von Kardoff, E. & Steinke, I. (eds). A Companion to qualitative research. London: Sage Publications. 2008. 25 Ibid.
26 Burns, Nancy, and Susan K. Grove. Understanding nursing research: Building an evidence-based practice. Elsevier Health Sciences, 2010.
Page 22 of 47
comprises the eight high-at-risk counties, three in the Northern Kenya border regions
(Garissa, Mandera and Wajir); five in the coastline border region of Kenya (Kilifi,
Kwale, Tana River, Lamu and Mombasa) and Nairobi. The targeted populations in
these locations included both provincial and county government officials, youth and
community leaders, CSOs and members of the public.
3.4 Sample Population
This project employed a purposive sampling technique as a type of non-probability
sampling27. This research project was limited to selected respondents that were
deemed especially informative on the issues under investigation. Due to the
sensitivity of this type of study, purposive sampling was used to select members of
difficult-to-reach specialized populations. Respondents for the interviews were
subjected to in-depth investigations, with the purpose of gaining a deeper
understanding on the issues under investigation.
3.5 Date Collection Methods
This research study employed literature review, in-depth interviewing and
questionnaires for data collection.
3.5.1 Literature Review
An in-depth literature review was conducted prior and after the field research. The
prior review was conducted with a view of identifying the ensuing knowledge gaps
and obtaining background knowledge on the phenomenon under study. After the
research findings were collated and analysed, researchers embarked on a further
review of literature with a view of linking the findings with the existing body of
knowledge. The review of literature relied on peer-reviewed journals and books,
government reports, as well as print and online mainstream media reports.
27 In non-probability sampling, the sampling elements are chosen from the population by non-random method (Brink, Van de Walt and Van Rensburg, 2012: 140).
Page 23 of 47
3.5.2 Interviews
In order to collect qualitative, descriptive, in-depth type of data from specific
individuals deemed knowledgeable on the issues under investigation in this project,
interviews were employed as the most appropriate method with the aim of
reconstructing and give meaning to events, as well as describing and expressing
feelings about the phenomena under investigations, including predictions of future
developments. The targeted respondents for the interviews included national and
county government officials, youth and community leaders. Through the interviews,
researchers sought to clarify meanings and assertions from respondents, while
allowing them to respond on their own terms and within their own linguistic
parameters.
3.5.3 Questionnaires
This project sought to reach out to a wide range of selected community members.
Questionnaires are often useful while collecting largely quantitative information
from a wider sample which might be difficult to reach with limited time and
resources. In this case, clearly defined facts and opinions were identified beforehand.
3.6 Data Analysis
Data collected from questionnaies were thematically analyzed. Thematic analysis is
a form of descriptive approach where themes of data collected are identified and
analyzed28. It is a process where encoding involves enlisting themes, qualities and
indicators that have common relationships. This process of analysis involved
searching and identifying common threads or themes and establishes recurring
patterns.
28 V. Braun, and V Clarke. Using thematic analysis in psychology. Qualitative research in psychology, 3: 77–101, 2006.
Page 24 of 47
Data, largely quantitative generated from conducting the survey in nine counties was
coded and computed. Descriptive and inferential statistics were then computed to
establish the relationships among various variables.
4.0 Key Findings from Field Research
4.1 Family Suffering
An overwhelming 96.4 percent of the respondents view terrorism as leading to
increased loss of lives. A staggering 92.7 percent of the respondents agreed that
terrorism leads to an increase in sustained injuries. An overwhelming 97.7 percent
see terrorism leading to an increase in trauma among the affected communities.
At least 93.6 percent of the respondents viewed terrorism as leading to increased
anxiety while 94 percent of the respondents agreed that terrorism causes reduced
economic productivity. Meanwhile 94.1 percent of the respondents viewed terrorism
as a cause of direct economic losses and 75.8 percent attributed increasing cases of
abduction and extortion to terrorism.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Loss of lives
Injuries
Trauma
Anxiety
Low economic productivity
Direct economic losses
Abductions/extortions
71
61
63
56
58
57
33
26
32
34
37
36
37
43
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 25 of 47
4.2 Crippling of the Tourism Sector and other sectors
In this instance 97 percent of the respondents view terrorism as a cause of decreased
tourist visits in the affected counties and 96.9 percent of the respondents believe that
cases of terrorism leads to increased travel restrictions and travel bans from foreign
governments. Terrorism was cited by 94.2 percent of the respondents as a cause of
reducing business revenues and 92.3 percent of the respondents believed terrorism
leads to increased job losses.
0% 20% 40% 60% 80% 100%
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
65
32
1
1
1
57
37
4
1
1
61
32
6
1
1
Tourist decline Travel bans/restrictions Reduced business revenue Job losses
Page 26 of 47
4.3 International Commerce
In terms of international commerce, 90.6 percent of the respondents felt that
terrorism caused reduced trade in the affected counties while 91.5 percent of the
respondents were of the view that terrorism causes reduced foreign investment.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
48
42
5
4
0
54
38
6
2
1
Reduced Trade Reduced Foreign Investment
Page 27 of 47
4.4 Indirect Economic Costs
From the survey, 84.4 percent of the respondents say that terrorism causes
installation of expensive surveillance gadgets and hence have an economic impact;
83.5 percent of the respondents believe that terrorism causes the loss of expert
personnel from the affected counties; 82.6 percent of the respondents view terrorism
causing an increased cost of marketing Kenya as an investment destination; 77.9
percent of the respondents view terrorism as a cause of increased insurance
premiums for their properties; and 88.8 percent of the respondent view terrorism
increasing the cost of doing business.
In regard to reduced demand for goods and services resulting from terrorism, 74.9
percent of the respondents attributed this to terrorism; 89.7 percent of the
respondents believe terrorism causes reduced growth in the local economy of
affected counties; and 88.3 percent of the respondents believe that terrorism causes
increased spending on homeland security.
4.5 Cost of Living
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
47
37
11
3
2
40
44
13
2
1
38
45
10
6
1
26
52
16
5
1
43
46
7
3
2
31
44
14
9
2
47
43
5
5
1
48
40
9
1
1
Surveillance gadgets Expert personnel Cost of marketing kenya
Risk assesment Cost of doing business Reduced Demand
Reduced Growth Homeland security expenses
Page 28 of 47
It was found that 70 percent of the respondents believe terrorism causes an increase
in the cost of living, while 76.8 percent of the respondents agree that terrorism causes
to a reduction in family income and 69.6 percent of the respondents agree that
terrorism leads to reduced savings.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
43
27
20
8
2
42
35
13
8
2
34
36
18
9
3
Cost of living Reduction in family income Reduced Savings
Page 29 of 47
5.0 Cross tabulation of the economic impact in the counties
5.1 Increased loss of lives
There is homogeneity across all counties that terrorism has caused loss of lives.
5.2 Increased injuries sustained
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
4
1622
22 2012
19 21 21
20
3
2
7 88
5 2 20 1 0 0 0 0 0 1 1
Strongly Agree Agree Neutral Disagree
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 30 of 47
From the responses terrorism has caused injuries across all the sampled counties.
5.3 Increased trauma
All the counties show that terrorism has caused trauma including Nairobi.
5.4 Increased anxiety
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Strongly Agree Agree Neutral Strongly Disagree
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 31 of 47
There was consensus across all counties that terrorism causes increases anxiety
amongst the population.
5.5 Reduced economic productivity
Across all the counties terrorism reduces economic activity.
5.6 Direct economic losses
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Strongly Agree Agree Neutral Disagree Strongly Disagree
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Strongly Agree Agree Neutral Disagree
Page 32 of 47
From the responses Nairobi, Garissa and Wajir counties do not see terrorism as a
cause of direct economic losses.
5.7 Increased abduction and extortion
Kwale, Mandera and Tana River counties had more abductions compared to the
other six counties.
5.8 Decreased visits of tourists
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree
Page 33 of 47
Terrorism is seen as causing decreased tourist visits across all the counties.
5.9 More travel restrictions and bans
There is general consensus across all the counties that terrorism causes travel
restrictions by tourists and international travel bans.
5.10 Reduced business revenues
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 34 of 47
There is a strong feeling by respondent across all the counties, except Lamu, that
terrorism causes reduced business earnings.
5.11 Job losses
There is a strong feeling that terrorism leads to job losses in all the counties.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 35 of 47
5.12 Reduced trade
In Kwale, Kilifi, Tana River and Mandera counties, a majority of the respondents
view terrorism as cause of reduced trade.
5.13 Reduced foreign investment
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 36 of 47
From the responses in the table above, terrorism causes reduced foreign investments
across all the sampled counties.
5.14 Installation of expensive surveillance gadgets
A majority of the respondents strongly feel that terrorism leads to the installation
of expensive surveillance gadgets.
5.15 Expert personnel
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 37 of 47
There is minimal effect of terrorism on expert personnel in Kwale County.
5.16 Increased the cost of marketing Kenya as a tourist and investment
destination
The respondents in Kwale County do not see terrorism as having any impact on
Kenya as a tourism and investment destination.
5.17 Increase in risk assessment (e.g. insurance costs)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 38 of 47
In Kwale County terrorism has not increased assessment of risk and insurance costs.
5.18 Increased cost of doing business
There is general consensus among the respondents that terrorism increases the cost
of doing business.
5.19 Reduced demand for goods and services
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 39 of 47
Demand for goods and services are also affected by terrorism across all the counties.
There is however a significant number who feel that terrorism has no effect on the
same.
5.20 Reduced growth in local economy
In all the majority of Counties most respondents strongly agree that terrorism causes
reduced growth of the local economies.
5.21 Increased spending on homeland security
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 40 of 47
Majority of the respondents agree with the proposition that terrorism causes
increased spending in homeland security.
5.22 Increased cost of living
Lamu, Mombasa and Mandera counties strongly feel that terrorism causes an
increase in the cost of living.
5.23 Reduction in family income
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 20% 40% 60% 80% 100%
Lamu
Kilifi
Kwale
Mombasa
Nairobi
Garissa
Wajir
Tana River
Mandera
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 41 of 47
There is a stronger feeling in Kwale, Mandera, Nairobi and Kilifi counties that
terrorism causes a reduction in family income.
5.24 Reduced savings
Terrorism causes reduced savings across all the counties. However, in Kilifi, Kwale
and Nairobi counties there is a strong feeling that the effects are more than Garissa,
Mombasa and Lamu.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Strongly Agree Agree Neutral Disagree Strongly Disagree
Page 42 of 47
6.0 Conclusions Across all the counties there is a general consensus from the responses that terrorism
causes loss of lives and injuries among the affected communities. This leads to
increased trauma and anxiety among the affected family members causing reduced
productivity and hence reduced family income. This in turn leads to declining
standards of living among the affected regions.
Terrorism also causes direct economic losses like destruction of property and loss of
business revenue in addition to attracting extortion of the masses by terrorists to raise
income through abduction and blackmail.
Terrorism had a big impact on the economies of counties in particular Lamu and
Kilifi in the coastal region which greatly suffered economically due to decreased
tourist numbers resulting from travel restrictions by foreign governments. This led
to a near collapse of the sectors that support tourism like the local businesses,
farming and other forms of livelihood supported by tourism like crafts, embroidery
and curio businesses. The decline of tourism in the coastal counties also led large
hotel chains laying off workers and retrenchments have now become the norm in the
hospitality industry in counties affected by terrorism. The affected counties suffer
even more as the County governments in the affected counties fail to meet revenue
targets as businesses close leading to poor service delivery in the affected counties.
Indeed one governor lamented that trying to collect revenue from his county after
the numerous terror is like milking a stone.
Terrorism has had a negative effect on international commerce as terrorism reduces
international investments in affected counties. Thereby negatively impacting on
FDI, and loss of maritime trading as well as port business to other regions. Indeed
Uganda recently justified its choice of using the Tanzanian route to build its crude
oil export pipeline instead of Kenya based on the higher likelihood of terrorists
Page 43 of 47
attacking the installations were it to pass through Lamu which is heavily affected by
tourism.
Nairobi County has also suffered immensely as a result of terrorism. Although it
might not be noticed, massive investments have gone into expensive installations
such as security cameras, metal detectors and advanced security systems to avert
terror. Although these efforts have borne fruits, the economic effect is massive
considering that these resources could have gone into other productive investments.
Mandera, Wajir and Garissa counties have also been adversely affected by acts of
terrorism. The respondents reported that expert staff such as teachers, the NGO
community and the civil servants have abandoned their workplaces as a result of
insecurity. The health sector has also suffered as doctors are not willing to work in
the terror prone regions.
The increase in terrorism incidents has additionally led to businesses facing higher
insurance policy premiums as a result of their increased risk profiles. Terrorism has
also made Kenya much harder to sell as a premier tourist and tourism investment
destination and has been cited as leading to reduced demand for goods and services
as the purchasing power in these counties decline. An administrator attributed
increasing cases of domestic conflicts to terrorism as fathers are unable to meet their
obligations of providing for the families. Children have also had to drop out of school
due to lack of school fees as family incomes decline or vanish all together.
7.0 Recommendations
The respondents in all the sampled counties felt that co-operation between the
government and the communities affected by terrorism activities will go a long way
in helping to prevent radicalization and hence prevent terrorism. The government
should therefore institute measures geared towards encouraging citizen participation
Page 44 of 47
in combating violent extremism. It is therefore recommended that the government
stops profiling Muslim communities as a counter terrorism strategy as it limits
chances of this community helping the government to fight extremism.
The private sector should be proactive in promoting policies that encourage youth
employment and create incentives that encourage the sharing of information
amongst the community and the police. This incentives will go a long way in
identifying potential terrorism activity and hence beneficial to the private sector as
well. The government in conjunction with the private sector, non-governmental
organisations and the religious leaders should intensify sensitisation programs on the
true beliefs of Islam with a view to preventing them from falling to the teachings of
the extremists.
The government should initiate an emergency fund to help cushion the victims of
terror from total economic ruin and mitigate chances of further radicalisation of
youth whose regions are prone to terror. In this regard the community should pursue
an inclusive way of raising their children in order to help detect early warning signs
of exposure to radical islamic ideologies.
Page 45 of 47
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