Western donors received written requests Friday from the Kenyan government for additional aid to help shore up the faltering economy after the abortive coup attempt by Air Force personnel Aug. 1.
The total supplementary aid being requested is more than $125 million, according to reliable sources. Kenya, which is one of the top aid recipients in black Africa, receives its principal funds from Britain, West Germany and Scandinavia. The United States has planned to donate nearly $100 million in economic, food and military aid this year, making Kenya the third-largest recipient of U.S. aid in Africa, behind Egypt and Sudan.
Those countries are not known to have reacted to the request yet. Kenya has received substantial Western aid because it was known as one of Africa's showcase countries for its political stability until the attempt to overthrow President Daniel arap Moi's government three weeks ago.
Kenya needs an extra $500 million to balance growing import bills against falling export revenues this year. Money borrowed abroad already has been partially secured, but about another $100 million is still needed to bridge the gap. Even if the Kenyans are lucky enough to get all the aid they have asked for, some observers have expressed fears that it will not be sufficient to halt the economy's downward spiral.
The violent coup attempt, which was suppressed in a matter of hours by loyal Army and paramilitary troops, has only served to aggravate a growing mood of skepticism among foreign businessmen here. Low foreign-exchange reserves -- the equivalent of one month's import purchasing power at the end of July -- and a rising debt service ratio estimated at 15 percent are dimming the country's reputation as an ideal place for investment.
"The outlook for international investors and business in general is very bleak because the government has not addressed itself to the problems that exist," one American businessman said. "Right now nobody has any prospects at all."
Manufacturers are wondering how to recover from the withdrawal in June of the only export compensation they had, a 20 percent rebate scheme. The $30 million that the government saves there will be used to help balance a rocky national budget. Critics say this move to shore up dwindling foreign reserves is shortsighted because export revenues are already falling.
Because the coffers are dangerously low, the national oil refinery is operating at half the level it was during the first six months of the year, and the government announced a 10 percent cutback on oil imports Aug. 19. Industry sources say that even this will not avert the crisis. The manufacturing and agricultural sectors will be the first to feel the effects, with production likely to decline as energy becomes scarce.
The country's business community, an amalgam of Kenyans, European and U.S. expatriates and Asians of Indian and Pakistani origin, have demonstrated determination to return to "business as usual." However, the long-term effects are just beginning to emerge.
Property prices for housing of the type sought by middle-class Africans has remained stable, but rents on the larger homes lived in by expatriates have plummeted. Deals on the stockmarket have slowed to a trickle as buyers wait for a sign of confidence from the government.
Many would like to see Parliament dissolved and a national election called. So far there has been no indication that this will happen, although on Aug. 21 Moi, in his first major political move this month, appointed new commanders to the police force and the paramilitary General Service Unit. He also named Army Maj. Gen. Mahamoud Mohammed, an officer instrumental in suppressing the coup, to reestablish the Air Force.
Most disturbing for the business community is the specter of a major Asian exodus. Their disappearance would shake the foundations of the economy.
Although the country's 80,000 Asians make up only a small fraction of Kenya's 17.5 million population, they are responsible for roughly a quarter of the annual $400 billion gross domestic product and control about 90 percent of the wholesale and retail trade.
This tightly knit community bore the brunt of the widespread looting carried out by slum-dwellers during the uprising. Asian homes bordering on shantytowns also were ransacked by mobs; women and young girls were raped and property destroyed. The psychological damage inflicted will be difficult to repair. Scores of the Asians, traumatized by the violence, shipped their wives and children out of the country just days later.
Several Asian-owned shops in Nairobi have signs advertising closing sales, and there probably will be more to follow. Anti-Asian sentiments have surfaced in other African uprisings, and many Asians left Tanzania and Kenya in other upheavals. Ugandan dictator Idi Amin expelled the country's 75,000 Asians 10 years ago.
During colonial times Asians were classed politically and socially halfway between the whites and the blacks. They were not allowed to own agricultural land and so turned to trading and middle-level clerical jobs. When Kenya became independent in 1963 Africans who wished to rise up through the bureaucratic and commercial ranks found themselves encountering not the whites but the Asians. This often gave rise to resentment.
Despite the problem a mass departure of Asians would create, the ambivalent attitude that exists toward this community is reflected in the official government silence about the damage done to their homes and businesses even though the Asians have been exhibiting a high profile at the loyalty demonstrations that have been orchestrated throughout the country.
"Politically they are anathema, and Amin was right to get rid of them, but economically we can't afford to do it," mused a Kenyan member of Parliament. "The Asians do all the things that keep life going here. Even if Africans take over, it will be a generation before we reach the same level in the economy."