Kenya’s exports worth US$1.3B at risk from Middle East conflict
The crisis has also pushed up global oil prices, further increasing production and logistics costs.
KENYA – Trade Cabinet Secretary Lee Kinyanjui has confirmed that Sh164.6 billion (approx. US$1.27 billion) in annual exports to the Middle East are at risk amid escalating regional conflict.
For fresh produce exporters, flowers, meat, dairy, and other high-value agricultural goods are among the hardest hit, with longer transit times and rising freight charges already affecting shipments.
Transit Delays and Rising Costs
Ongoing instability has led to the suspension and restriction of key maritime and air cargo routes through the Red Sea and Gulf corridors. This has resulted in transit delays of 10 to 20 days, increased freight charges, and air cargo delays of up to 48 hours.
“These disruptions are particularly severe for high-value and time-sensitive exports, including horticulture, meat, dairy and speciality coffee,” Kinyanjui said.
The dairy sector and other agricultural exports are also seeing reduced output and shipment disruptions.
Beyond Direct Trade: A Logistics Hub at Risk
“Beyond direct trade, the Middle East serves as a critical global logistics and transhipment hub. Disruptions in this region are therefore affecting not only exports to Gulf markets, but also Kenya’s access to Europe, Asia and North America,” the CS said.
The crisis has also pushed up global oil prices, further increasing production and logistics costs. Fuel alone accounts for up to 50 percent of logistics costs, significantly eroding exporters’ competitiveness.
For instance, tea exports, a major foreign exchange earner, are under additional pressure, with the Middle East accounting for up to 35 per cent of total volumes.
Government Interventions and Market Diversification
To cushion the economy, the government has introduced immediate and medium-term measures. Key measures include a temporary reduction in the Value Added Tax on petroleum products from 16 per cent to 8 per cent to ease the impact of rising fuel prices.
Additionally, a multi-agency framework has been activated to monitor fuel pricing, freight costs, and supply chain stability.
“We are working with Kenya Airways, international carriers and logistics partners to secure alternative cargo routes. Efficiency is being enhanced at key gateways, including the Port of Mombasa and Lamu Port, to reduce delays,” Kinyanjui said.
Strategic Shift Toward Africa Trade
The crisis highlights the risks of overreliance on limited transport corridors. Therefore, Kenya is accelerating efforts to diversify export destinations and to strengthen intra-African trade through the EAC, COMESA, and AfCFTA frameworks.
“The Government remains firmly committed to protecting Kenyan farmers, manufacturers and exporters,” Kinyanjui concluded.
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