Kenya’s export sector is under pressure following ongoing tensions in the Middle East, which are disrupting key trade routes and threatening billions in foreign earnings.
Cabinet Secretary (CS) for Investments, Trade and Industry, Lee Kinyanjui, noted that the instability could affect about Sh164.6 billion worth of annual exports to the region.
According to the CS, Kenya recorded a historic Sh1.1 trillion in exports in 2024, driven by horticulture, tea, apparel and manufacturing. However, the Middle East, one of Kenya’s fastest-growing markets, now faces uncertainty.
“The region is not only a major destination for our exports but also a key global logistics hub. Disruptions are affecting access to markets in Europe, Asia and North America,” Kinyanjui explained in a press statement.
Notably, restrictions along the Red Sea and Gulf corridors have increased transit times by 10 to 20 days, raised freight costs and caused air cargo delays of up to 48 hours.
In addition, the delays are affecting perishable exports such as flowers and fresh produce, which depend on timely delivery.
Further, high-value sectors including horticulture, meat, dairy and specialty coffee are already feeling the impact. Floriculture exporters are reporting losses due to spoilage, while meat exports have dropped significantly in some markets.
Tea exports for instance, which account for up to 35 percent of shipments to the Middle East, are also facing reduced demand and declining prices.
Equally, rising global oil prices have further increased production and transport costs, with fuel accounting for nearly half of logistics expenses.
At the same time, the crisis could affect diaspora remittances, as more than 400,000 Kenyans working in the Gulf face uncertainties in sectors such as construction and hospitality.
In response, the government has introduced measures to cushion exporters and maintain trade flows as the CS announced that VAT on petroleum products has been temporarily reduced from 16 percent to 8 percent to ease fuel costs.
“We have activated a multi-agency team to monitor fuel prices, freight costs and supply chains, focusing on key sectors such as horticulture, tea, coffee, livestock and manufacturing,” he added.
Similarly, Kinyanjui disclosed that the government is also working with Kenya Airways and other logistics partners to secure alternative cargo routes and reduce delays.
“Efficiency at the Port of Mombasa and Lamu Port is being enhanced to improve cargo movement, while engagement with shipping lines continues to address rising freight and insurance costs,” the CS elaborated, stressing that that the situation highlights the need to diversify export routes and markets.
Likewise, Kinyanjui revealed that efforts are underway to expand trade in Asia, Europe and Latin America, while strengthening regional trade through frameworks such as the East African Community (EAC), COMESA and the African Continental Free Trade Area (AfCFTA).
“The government remains committed to protecting exporters and ensuring continuity of trade while building long-term resilience,” he assured.
by Anita Kariuki
