How Middle East conflict threatens Kenya's Sh164b export earnings

Investments Trade and Industry Cabinet Secretary Lee Kinyanjui. [Wilberforce Okwiri, Standard]

Kenya risks losing Sh164.6 billion in annual export earnings from Gulf trade if efforts to de-escalate the Middle East conflict fail, Trade Cabinet Secretary Lee Kinyanjui has said.

Kinyanjui warned that ongoing instability is disrupting logistics and trade flows, affecting key exports such as flowers, tea, meat, dairy and apparel as conflict continues in the region.

The Trade CS further said disruptions have worsened since the United States and Israel launched strikes on Iran on February 28, with delivery times now stretching by 10 to 20 days.

Air cargo delays of up to two days and rising freight costs have further strained exporters, especially those dealing in perishable goods.

CS Kinyanjui warned that the strain on exports poses a serious economic threat, with a hit to Kenya’s foreign exchange earnings.

"Kenya's exports reached a record Sh1.1 trillion in 2024, supported by strong performance in horticulture, tea, apparel, and emerging manufacturing sectors. However, the current geopolitical tensions now put at risk Sh164.6 billion worth of annual exports to the Middle East, one of Kenya's most strategic and fastest-growing markets," he said.

He added that some exporters are facing reduced volumes, product spoilage and price cuts due to limited market access.

Kinyanjui also warned that more than 400,000 Kenyans working in Gulf countries have been affected by the conflict, with potential knock-on effects on remittances.

"Disruptions in labour markets and logistics are expected to reduce diaspora remittances, further exerting pressure on the country's foreign exchange position," he said.

In response, he said the government is rerouting cargo through alternative air corridors, improving efficiency at the Lamu and Mombasa ports, and engaging shipping lines to manage rising freight and insurance costs.