Barely a week after UK-based PR firm, Grayling, was hired to help revive the ailing Kenyan tourism and help boost inward investment after the country suffered a series of terrorist attacks that left one of its highest foreign exchange earners severely dented, now it seems it has a new problem to contend with from the African Union.
The African Union problem cropped up recently during the 24th Heads of State Summit in Addis Ababa, Ethiopia, where the body presented its budget proposal to member states.
The union, which has been experiencing financial difficulties since the death of Libya’s president Moamer Kadhafi who had been heavily bankrolling a huge chunk of its budget, proposes a number of ways to finance its budget including the introduction of a USD 10.00 tax on flight tickets to and from African destinations and a USD 2.00 dollar tax on each night spent in a hotel in Africa.
These 2 levies are expected to raise USD 730 million dollars a year. The union also hopes to raise an additional USD 1.6 billion from a half-a-cent tax on SMS exchanges. If these new taxes on members states, which Kenya is a signatory to, are ratified, the African Union will manage to shake off its dependence on institutional aid but it will come at a huge financial sacrifice by member states who, like Kenya, have been registering a significant slump in tourism revenues as a result of terrorism activities.
Kenya’s tourism, for instance, is currently operating below capacity. Arrivals at the coastal town of Mombasa are at an all-time low, plummeting to nearly 50% by January.
It will be interesting to see what Grayling does to turn around the situation and convince international tourists to come to spend their holidays in a place where a flight ticket might now cost an extra USD 10.00 and every night spent in a Kenyan hotel may require a visitor to part with an additional USD 2.00 over and above the looming threat of terrorism which does not seem to want to go away.