A new study has found Kenya could lose up to Ksh1 trillion if a bill proposed by Member of Parliament Peter Kaluma to tighten the laws against homosexuality passes.
According to the study released by Open for Business, East African economies spend as much as $5 billion (about Ksh646 billion in the current exchange rate) a year due to the rising discrimination against LGBTQ people.
The study found that even without the proposed bill, Kenya already faces annual economic losses of up to Ksh201 billion ($1.5 billion) due to LGBTQ+ discrimination. President William Ruto has consistently expressed opposition to LGBTQ+ rights, emphasising that such orientations are incompatible with Kenya's cultural and religious values. However, his government is paying the price, according to the new study.
The ongoing costs stemming from reduced national productivity have been estimated to be between Ksh8.8 and Ksh22 billion, higher public health expenses between Ksh39.8 and Ksh179.3 billion, and the financial burden of anti-LGBTQ+ policing to be hovering around Ksh16 and Ksh31.9 billion.
However, the report warns that the proposed Family Protection Bill, similar to the Ugandan Anti-Homosexuality Act, has the potential to have an even greater financial impact on Kenya, especially given its larger economy and population.
Using similar estimation models, Open for Business estimates that these annual costs could rise to as high as Ksh1.1 trillion annually if Kenya passes this legislation.
According to the study, the legislation, which seeks to criminalise LGBTQ+ identities and related activities, could lead to a financial burden equivalent to 2.2–5.8 per cent of Kenya’s GDP. The study highlights the potential losses across various sectors, including international funding, tourism, and productivity.
The report warns that Kenya could lose between Ksh118.5 billion and Ksh463.2 billion ($877.5 million-$3.4 billion) in World Bank funding.
Additionally, foreign direct investment (FDI) and official development assistance (ODA) could decline by as much as Ksh1.6 trillion ($1.2 billion), further straining the country’s economy.
Public health costs are estimated to rise between Ksh42.4 billion and Ksh190.6 billion ($313.8 million-$1.4 billion) due to an anticipated increase in HIV/AIDS cases and reduced healthcare access for LGBTQ+ individuals.
The tourism sector, which is a crucial component of Kenya’s economy, could lose between Ksh108.1 billion and Ksh29.6 billion ($801.3 million - $960 million) due to reduced international travel and potential boycotts.
Other economic repercussions include a negative trade balance impact of up to Ksh76.5 billion ($566.6 million), decreased national productivity of up to Ksh24.7 billion ($182.8 million), and brain drain as skilled professionals leave the country due to the restrictive environment.
The study notes that the so-called ‘talent flight’ could cost the economy up to Ksh7.2 billion ($53.7 million), while anti-LGBTQ+ policing expenses could reach Ksh95.3 million ($706,200).
