Effect on Kenya by the Meltdown in Wall Street

[Chiumbo]

What is the effect of the financial meltown on Wall Street to Kenya? Will this stop the rise of the dollar compared to the shilling? Will this stop the increase in world oil prices? I am a little confused...

[Jina]

I do not think the mortgage crisis currently embroiling the United States will have any effect on Kenya. I doubt that banks and other financial institutions in Kenya invested heavily on mortgage securities issued by Wall Street firms.

[Pierre]

I think the financial crisis in the United States will affect foreign direct investments worldwide. A number of banks has already been bankrupted and many more burned by bad investments in the United States. They will not have the capacity or willingness to invest as they fix their own houses first before even thinking of investing.

That means Kenya will probably have problems securing financing or investments to improve its infrastructure and those kinds of stuff.

[Seth]

The global economy is a more intertwined world and the collapse of the most important and biggest economy will have global repercussions. If the U.S. economy slides into recession, there will be less tourists who will visit Kenya and less people who will buy its agricultural products. These are the most important part of Kenya's economy and will affect Kenyans greatly.

[walterdeus]

The current wall street meltdown has far much consequences that may not be felt by ordinary people. if not amicably resolved, the consequences may be felt in three months from now. The worst of it will happen when you will not be able to withdraw your money from the bank and you have thousands of $$$ in the bank.
Right now, some kenyans abroad are rejoycing because the exchange rate is high, i wish they knew the facts behind it. cammon guys!!

[Joseph]

My friend Seth has already touched the tourism sector that will be among the first industry to have a direct major impact on the kenyan economy.

Other members have also pointed out what may happen. Let me also add two more aspects.

Remittance of money back home from both foreign institutions and Kenyans living abroad.

I'm sure you might be aware of the billions of kenyan shillings that Kenyans abroad send each year to their relatives and business projects.

With the meltdown and collapse of wall street and its direct repercussions on major world financial institutions, expect to see a drastic fall in amount of cash send back home. Many Kenyans will definitely find themselves unemployed or their savings washed away and international bodies like World bank, IMF, Red cross, Care international and the rest will not be able to meet their day to day obligations (remember a bulk of their financial operations are financed by U.S institutions.)

International trade.

I really don't need to elaborate on this one, trade will only exist and run smoothly if there are willing buyers and sellers. Because we no longer use the barter trade system, but overwhelmingly use the monetary system to lubricate trade - it's this monetary system that is at stake here!