Kenya’s export sector is facing fresh turbulence as the ongoing Middle East crisis disrupts key trade routes, threatening up to KSh164.6 billion worth of annual exports and exposing the country’s heavy reliance on the region as a logistics and market hub.
- •A briefing from the Ministry of Investments, Trade and Industry warns that the geopolitical tensions are already reverberating across global supply chains, with Kenyan exporters experiencing delays, rising freight costs and shrinking market access.
- •The Middle East accounts for a significant share of Kenya’s outbound trade, particularly in tea, horticulture and manufactured goods.
- •Officials say the crisis is not only hitting direct exports to Gulf markets but also disrupting transshipment routes that connect Kenya to Europe, Asia and North America.
The crisis has renewed urgency around diversifying Kenya’s export markets and logistics pathways. Officials say the country is accelerating outreach to Asia, Europe and Latin America, while deepening trade within Africa under frameworks such as the African Continental Free Trade Area and the East African Community.
“The current situation underscores the risks of over-reliance on single corridors,” the ministry said, signalling a longer-term policy shift towards resilience in trade infrastructure.
Shipping and air cargo routes through the Red Sea and Gulf corridors have been curtailed, pushing transit times up by as much as 20 days, according to a statement by CS Lee Kinyanjui. Air freight delays of up to 48 hours are compounding losses in perishable exports such as flowers and fresh produce.
Exporters are now grappling with a surge in logistics costs, driven largely by rising global oil prices. Fuel accounts for nearly half of transport expenses, placing additional strain on already thin margins.
The impact is already visible across sectors. Flower exporters are reporting weekly losses due to spoilage, while meat exports in some cases have dropped to below five percent of normal volumes. Tea, one of Kenya’s top foreign exchange earners, faces declining prices amid reduced access to a market that absorbs up to 35 percent of its exports.
The disruption is also expected to spill over into remittances, a critical pillar of Kenya’s foreign exchange inflows, although March figures indicate it might also trigger a short-term surge. More than 400,000 Kenyans work in Gulf countries, and any slowdown in those economies could tighten inflows that have recently hit record highs.
In response, the government has rolled out a series of emergency and medium-term interventions aimed at stabilising the export sector.
Among the immediate measures is a reduction in Value Added Tax on petroleum products from 16 percent to 8 percent to ease fuel-driven cost pressures. Authorities have also activated a multi-agency team to monitor freight costs, fuel pricing and supply chain disruptions.
Efforts are underway to secure alternative cargo routes in collaboration with Kenya Airways and international logistics partners, while operational efficiency is being enhanced at the Port of Mombasa and Lamu Port to reduce bottlenecks.
