Why Nairobbery Is the New Capital of Troubled Kenya; Crime and Corruption Are Combining to Hit Foreign Investment in Poverty Stricken Kenya. Special Correspondent Fredrik Dahl Reports

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Byline: Fredrik Dahl

Crime in the Kenyan capital is so rife that the city is famously known as "Nai-robbery" - a play on what is seen as a serious obstacle to attracting foreign investors and lifting the country out of poverty.

The signs of a society struggling to contain robberies, murders and rape are evident everywhere in the sprawling capital of roughly 3.5 million people which is east Africa's main commercial hub and home to one of the continent's largest slums.

Private security guards stand outside banks and shops, people in the well-off suburbs live behind high walls and electric fences, visitors are told not to go out after dark.

Rape has become so common that billboards warn against "human beasts".

Almost everybody has a tale of being a victim of crime or knows someone who has and local media run daily stories about armed robberies, carjackings and gun battles between police and armed gangs in broad daylight.

Paul Andre de la Porte, who heads the United Nations Development Programme in Nairobi, said general crime was more of an obstacle to private sector inflows than corruption, which has dominated headlines with high profile figures accused of being involved in mult-million dollar scams.

Mr de la Porte said: "If we could get rid of the level of insecurity that we have in Kenya, that would be a major breakthrough for its socio-economic development."

The economy - helped by booming tourism - has picked up since President Mwai Kibaki won power in 2002, growing by some five per cent last year from an average of two per cent in the late 1990s under his autocratic predecessor Daniel arap Moi.

But critics say it still underperforms partly due to the government's failure to deliver on promises to root out graft and violent crime, and fix poor roads and other infrastructure.

The most recent comparative statistics show that Kenya received less in crucial foreign direct investments than its poorer neighbours Uganda and Tanzania - $46 million (pounds 26.3 million) in 2004 compared to $237 million (pounds 135 million) and $470 million (pounds 269 million respectively.

Apart from deterring investors, analysts say insecurity can also hurt existing firms by pushing up costs and restricting operations.

Many businesses close early in Nairobi where owners swiftly pull metal grills over windows to protect goods.

Merchant International Group, a London-based consultancy which measures investment risk by assessing ten criteria, gave Kenya a worse grade than many other African countries, in part reflecting its problems with corruption and organised crime.

Despite being one of sub-Saharan Africa's most developed and stable countries, Kenya received the same overall rating for this year's first quarter as volatile Ivory Coast, while Sudan was judged to be slightly less risky, despite violence in its Darfur region. …