The government has made strengthening security and improving confidence a priority and it is not difficult to see why. Security concerns – a result of recent terrorist incidents, including the April 2015 Garissa University attack and the 2013 Westgate Mall attack – have had a noticeable impact on certain sectors of the economy. The most affected has been tourism, a key foreign exchange earner, with knock-on effects for airlines, banks and many others. Tourist numbers fell 11.1% year-on-year (y-o-y) in 2014, and arrivals are expected to fall even further in 2015 as official figures for the first 9 months of the year are down 16.9% overall and visitor totals for the first five months of the year are down 25% y-o-y.
The government’s 2015/16 budget allocated KSh112.5bn ($1.2bn) to the National Intelligence Service and defence more generally, and KSh102.4bn ($1.1bn) to the State Department of the Interior, a combined 13% rise from the prior year. All told, national security agencies should receive roughly 7% of the overall budget for 2015/16. The Kenyan government has also purchased an additional 2400 police vehicles, as well as better equipped its security forces and recruited another 15,000 personnel. There is even a project under way to build a wall along the 700-km Somali border that will include security features such as fences, cement walls and observation posts, at a total cost of roughly $260m.
In May 2015 the Kenyan police implemented the first phase of its National Security Surveillance, Communication and Control System for Nairobi and Mombasa, which includes 1800 high-powered CCTV cameras and an integrated command, as well as an emergency response contact centre. In addition to the increase in public sector-led initiatives, a robust security and risk management industry is growing.
The private security industry in Kenya has grown substantially in recent years, and according to James Omwando, group CEO of African multinational KK Security, there are somewhere between 2000 and 4000 private security firms and 300,000-400,000 security guards in operation, comprising everything from small operations with only a couple of staff to larger, professional outfits. The largest companies make up the 30 members of the Kenya Security Industry Association, an industry trade association that sets standards such as minimum wage and overtime, legal compliance, back-up resources and strategies, and training and development. Security companies typically cover at least three main services: guarding, electronic alarms and cash-in-transit. Among the largest clients are the country’s flagship institutions, including banks, telecoms companies and extractive firms. However, there is growing demand at the smaller end of the sector for basic building security in commercial and residential developments. Since the Westgate attack a plethora of new firms have been established. The majority of new build business premises in Nairobi now boast security guards, and many up-market private homes have guards and fast-response alarm systems.
Cost To Business
Omwando told OBG that businesses should allocate about 10% of their overhead to security. However, the sector in Kenya is not much different from that of other African countries, and costs can be brought down through greater use of technology. He told OBG, “Rising wages in the industry means that hiring guards is not as affordable as it used to be, and people are increasingly considering technology as an alternative. While tech will likely not completely replace human guards anytime soon, it is increasingly cost competitive over the long term.”
In light of the government’s renewed efforts to help improve overall security, Omwando said no business has shown signs of pulling out of the market. He told OBG, “Nairobi is a central destination for most corporates. It is central to the region. It will take a lot for international companies to close their doors.”
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