New research has revealed the massive economic impact of LGBT+ discrimination in Kenya, costing the country hundreds of millions of dollars a year.
This is according to a report by Open For Business, a coalition of global companies making the case that inclusive and diverse societies are better for business and economic growth.
The group found that Kenya – Africa’s eighth largest economy – is losing $181 million to $1.3 billion (Sh18.5 billion and Sh130 billion) per year, or 0.2% to 1.7% of Kenya’s annual Gross Domestic Product (GDP), because of anti-LGBT+ discrimination.
This is equivalent to roughly 30% of the government’s total spending on education and 144% of its spending on health in 2018. The cost of the LGBT+ discrimination can be broken down into three elements:
• Lost tourism dollars: Kenya’s tourism industry, which dominates the services sector that contributes about 63% of GDP, is missing out on $64 million to $140 million (Sh6.5 billion to Sh14.3 billion) per year in revenues.
• Healthcare costs: Poor health outcomes, particularly the prevalence of depression and HIV/AIDS, from LGBT+ discrimination is costing Kenya approximately $1.0 billion (Sh105 billion) per year, or 1.4% of GDP. This is equivalent to about 25% of the total amount spent by Kenya on education in 2018 and it is more than the total amount spend on healthcare.
• Underutilisation of human capital: Inefficiencies in the form of unemployment, underemployment, wage gaps and lower productivity caused by LGBT+ discrimination is costing Kenya $105 million (Sh10.7 billion) per year. The actual cost to GDP is likely higher, given that labour combines with capital and other inputs to produce economic output, argue the report’s authors.
LGBT+ inclusion can give Kenya an economic boost
Homosexuality is illegal in Kenya under the country’s colonial-era penal code which penalises same-sex sexuality with five to 14 years in prison. LGBT+ people have no explicit protection from discrimination and face widespread social stigma and rejection.
The researchers said that for those working on national economic policy, the report “provides evidence of the link between economic outcomes and a culture of openness and inclusion”. For those seeking to end discrimination based on sexual orientation or gender identity, “this report shows LGBT+ inclusion is not [just] a cultural issue [but] is a business and economic issue.”
The modernisation of Kenya’s economy is claimed to be a top priority for the country’s government through its “Vision 2030” development plan which aims to create “a globally competitive and prosperous country with a high quality of life by 2030.”
The researchers said, however, that to become a thriving economy and to achieve the goals laid out in Vision 2030, “Kenya should foster a culture of openness, embrace diversity, and present an inclusive, progressive image to the world.” They added that, “LGBT+ inclusion can give Kenya an economic boost, helping Kenya to reach its goal of more than tripling its per capita income by 2030.”
In an earlier Open For Business report published in 2018 at the World Economic Forum at Davos, which established the Open For Business City Ratings (scoring cities on how inclusive, progressive and economically competitive they are), the capital Nairobi was rated “D”, which means that Kenya is not “open for business”. The report found that cities with higher scores of LGBT+ inclusion generally have higher rates of quality of living as well.
The research in Kenya was undertaken by David Kuria Mbote from DK Consulting and Roseline Njogu and Dr Eric Kibet from Lexlink. The Open for Business coalition consists of major multinational companies such as Barclays, EY, Google, IBM, KPMG, Mastercard, Microsoft and Virgin.
The Kenya High Court is currently deliberating a legal challenge to the constitutionality of criminalising same-sex intimacy. The court had been set to issue its potentially landmark ruling last week but this was postponed to 24 May, apparently due to the three judges’ workload.