January 16, 2019 / 6:22 PM / 5 months ago

Kenya-based foreign firms pledge to stick to Nairobi after attack

* Businesses encouraged by rapid end to attack

* No tourism cancellations seen so far

* Kenya is East Africa's business hub

* Flights, English, advanced IT draw investors

* Record shows Kenya's economy is resilient

By Duncan Miriri and George Obulutsa

NAIROBI, Jan 16 (Reuters) - International companies with regional headquarters in Kenya said on Wednesday that a deadly militant attack on an upscale Nairobi hotel complex would not scare them away from a city that has long been East Africa's business hub.

At least 14 people were killed and about 700 evacuated under fire after gunmen stormed the upscale dusitD2 hotel and office complex on Tuesday. Hotel guests and workers from companies like Visa Inc had to hole up for several hours while the attackers were hunted down and killed.

The raid echoed a 2013 assault by Islamist militants on an Israel-built shopping centre in the same neighbourhood that killed 67 people: Images beamed across the world during that assault dented Kenya’s image abroad and scared off tourists, damaging a vital sector of the economy.

Among Nairobi's other potential deterrents are sporadic political violence that erupts during elections.

But companies say the latest attack won't alter their plans to work in the region's richest city.

"We are very committed to Nairobi. GE is very committed to Kenya," said Brenda Mbathi, executive director for government affairs in East Africa at General Electric.

The American conglomerate set up its regional headquarters for sub-Saharan Africa in Nairobi in 2011, and now provides medical equipment to the Kenyan government and turbines to private power plant developers.

Convenient flights, a skilled English-speaking workforce and advanced information technology infrastructure have persuaded multinationals like GE and Alphabet Inc to set up regional hubs in the city.

The influx has helped shore up Kenya's long-held position as East Africa's wealthiest economy amid tough competition from other regional countries and Dubai to play a regional hub role.

The attack was claimed by Somali group al Shabaab, an al Qaeda affiliate fighting to topple Somalia's weak U.N.-backed government and impose strict Islamic law.

BUFFER ZONE

Neighouring Kenya has been a periodic target for al Shabaab after sending troops into Somalia to try to create a buffer zone along the porous border.

But robust economic expansion, estimated at 6.0 percent last year, has helped boost investor sentiments, although rising government debt levels have stoked concerns.

Snehar Shah, managing director for East Africa at British solar power firm Azuri Technologies, pointed out that Kenya was not the only country that had suffered attacks.

"We still believe that Nairobi is a hub for the region and we are very committed to being here," Shah told Reuters.

"This is also happening in places like London and it didn't stop business and tourism."

Google Africa, whose offices are near the hotel complex attacked, echoed his sentiments.

"We are here in Kenya for the long haul," said Dorothy Ooko, their head of communications.

Google lost some of its partners in the attack, including American Jason Spindler, the CEO of investment firm I-Dev International, part of Google's local start-up and developer network.

At the East Africa headquarters of U.S. ride-hailing firm Uber Technologies, staff were co-ordinating free rides to and from selected Nairobi hospitals for blood donors.

"Uber continues to stand in support of the Nairobi community as we recover from this devastating act," said their spokesman for East Africa.

1998 BOMBING

Such stoicism reflects a realisation that East Africa was not really getting more dangerous, said Ed Hobey-Hamsher, senior Africa analyst at global risk consultancy Verisk Maplecroft.

"One-off attacks will embarrass the Kenyan government but will not jeopardise its stability," he said.

Kenya has a record of resilience. Its economy recovered strongly from the 1998 bombing by al Qaeda’s East Africa cell of the U.S. Embassy in Nairobi which killed more than 200 people.

In the important tourism sector, which has attracted a wave of foreign investments recently from global chains like Hyatt Hotels and Accor SA, executives also stood firm.

"I don't see any cancellations and no one has cut short their stay," said Mohamed Hersi, chairman of the Kenya Tourism Federation, an umbrella body of hoteliers, tour operators and airlines.

The industry was encouraged by the swift security response that killed the attackers in less than 24 hours, he said.

Earnings from tourism, one of the top sources of foreign exchange, surged 31 percent last year to 157.4 billion shillings ($1.55 billion), the tourism ministry said on January 7.

The Nairobi Securities Exchange, a gateway for foreign investors into the fast-growing economies of East Africa, said trading had carried on normally on Wednesday.

"Despite the efforts by the terrorists to instil fear and destabilise our country, Kenya is a strong and resilient country. Today's market performance was stable," the bourse said in a statement. ($1 = 101.6000 Kenyan shillings) (Writing by Duncan Miriri; Editing by Katharine Houreld, William Maclean)

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