“No Cause for Alarm?” — Mbadi Downplays Middle East Crisis as Kenya Faces KSh 250 Billion Weekly Hit–
By News Desk
No Cause for Alarm?” — Mbadi Downplays Middle East Crisis as Kenya Faces KSh 250 Billion Weekly Hit
The Cabinet Secretary for the National Treasury, Hon. John Mbadi, has assured the Parliamentary Committee on Finance and National Planning that Kenya’s economy remains stable despite escalating tensions in the Middle East that threaten global economic growth.
Appearing before the Committee, CS Mbadi outlined the government’s preparedness and policy interventions aimed at cushioning Kenyans from potential economic shocks arising from the ongoing conflict.
He maintained that Kenya’s economy remains resilient, with real GDP projected to grow at 5.3 percent in 2026 and 2027, up from 5.0 percent in 2025, despite fears of disruptions in global energy markets, trade, and financial systems.
“To ensure we remain ahead of any adverse impacts, the government has adopted a whole-of-government approach. An inter-ministerial team is actively monitoring developments and preparing response strategies,” Mbadi told lawmakers.
Oil Supply and Energy Security
The CS acknowledged that the Middle East remains a critical supplier of petroleum products to Africa, exposing economies to risks of supply disruptions and price volatility. However, he emphasized that Kenya’s Government-to-Government (G-G) oil import arrangement with key suppliers — including Aramco Trading Fujairah FZE, ADNOC Global Trading Ltd, and Emirates National Oil Company Limited — will help stabilize local supply.
He further revealed that Kenya currently holds sufficient fuel reserves:
Super Petrol: 138,623 metric tons (16 days cover)
Diesel: 207,841 metric tons (19 days cover)
Jet Fuel: 150,398 metric tons (49 days cover)
Additional shipments are expected in March and April, significantly boosting fuel coverage in the coming weeks.
However, Mbadi cautioned that global price increases in May and June could push up local pump prices, triggering inflationary pressure. He warned oil marketers against hoarding fuel for speculative gains.
Potential Policy Interventions
In anticipation of prolonged conflict, the government is considering fiscal measures, including a shift to ad valorem taxation on fuel, as opposed to the current VAT structure, to mitigate price shocks.
Lawmakers, led by Committee Chairperson Hon. Kuria Kimani, urged early intervention strategies similar to those implemented during the COVID-19 pandemic.
Trade and Export Disruptions
CS Mbadi disclosed that Kenya is already experiencing significant economic losses:
KSh 250 billion per week in lost revenue due to halted live animal and meat exports to Gulf markets
Threats to tea exports due to disrupted trade routes and weakened bilateral agreements, including a KSh 5.6 billion deal with Iran
The Gulf region remains a major destination for Kenya’s livestock exports, accounting for 85% of live animal products and 68.9% of meat exports.
Opportunities Amid Crisis
Despite the challenges, Mbadi highlighted emerging opportunities, particularly the increased strategic importance of Lamu Port, which has seen revenue surge from KSh 15 million to KSh 350 million daily due to rising transshipment activity.
“This disruption, while challenging, positions Kenya as a critical logistics hub as global shipping routes adjust,” he noted.
Calls for Diversification
Members of Parliament called for long-term solutions, including:
Investment in e-mobility to reduce oil dependence
Exploration of alternative African oil markets
Leveraging Turkana oil resources to enhance energy security
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