The government has raised alarm over the potential impact of the ongoing conflict in the Middle East.
The National Treasury on Monday warned of far-reaching consequences for Kenya’s economy, particularly through disruptions to global supply chains and rising commodity prices.
The ministry raised the concerns during a high-level consultative meeting chaired by Treasury Principal Secretary Chris Kiptoo, bringing together senior officials to assess emerging risks and coordinate a unified response to the unfolding crisis.
Principal Secretaries Mohammed Liban (Petroleum), Jonathan Mueke (Livestock), and Boniface Makokha (Economic Planning), alongside technical teams from key government departments, attended the meeting.
Officials warned that escalating tensions in the Middle East could trigger a ripple effect across global markets, with Kenya particularly exposed due to its reliance on imported fuel and agricultural inputs.
Among the key risks flagged were potential disruptions to international supply chains and logistics, which could delay shipments and increase the cost of essential goods. The government also cited concerns over rising energy and fertiliser prices, which are likely to drive up production costs and feed into domestic inflation.
“There are significant risks to both the global and domestic economy,” the Treasury said, noting that increased price volatility could affect everything from food prices to transport costs.
Kenya’s energy sector is expected to be among the hardest hit, given its dependence on imported petroleum products. Any sustained increase in global oil prices could translate into higher pump prices, with knock-on effects across the economy.
Similarly, the agricultural sector faces renewed pressure from rising fertiliser costs, which could affect planting decisions and crop yields. This, in turn, may have implications for food security and the cost of living.
The government is also monitoring potential exchange rate pressures, as global uncertainty tends to trigger currency volatility. A weakening shilling would make imports more expensive and increase the burden of servicing external debt.
In addition, officials expressed concern over the possible decline in remittance inflows from Kenyans working in the Middle East. The region hosts at least 500,000 Kenyan workers, and any disruption to their earnings could affect household incomes and foreign exchange reserves.
To address these risks, the government announced the establishment of a standing mechanism to continuously monitor global developments and guide timely policy responses.
The framework will bring together key ministries and agencies to ensure coordinated action.
The inclusion of ministries responsible for petroleum, livestock and economic planning reflects the sectors most vulnerable to external shocks. Rising fuel prices could increase the cost of transport and production, while higher input costs in agriculture may push up food prices.
Already, there reports of fuel hording in the country in anticipation of higher prices.
Livestock producers, already facing climate-related challenges, could also be affected by increased feed costs and supply disruptions.
Treasury said government’s approach is aimed at safeguarding economic stability through early warning systems and proactive intervention measures. These could include targeted support for affected sectors and policies to cushion consumers from rising costs.
