The Middle East conflict is back in the headlines, and while it might seem like a distant problem, the ripple effects could hit Kenyan businesses hard. Rising fuel prices, disrupted trade routes, and economic instability are just a few of the challenges that could emerge.
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If you are a business owner in Kenya, you need to understand how this crisis might affect you and your business. And what you can do to stay ahead. Let us break it down.
Why the Middle East Conflict Matters to Kenya
The current crisis will affect your business in many ways. However, in this article, we are going examine five ways your business will likely be affected. Once you have gone through this article, you will be in a position to look at the whole Middle East conflict and determine the specific impacts the conflict is likely to affect you and your business.
a. Oil Prices Could Skyrocket
Top on the list is the effects on oil prices. We use oil (fuels, gas, etc.) in all aspects of our lives. Our political, economical, social and even religious lives are affected by what happened in the global oil industry. The Middle East is a major oil-producing region. Any conflict tends to send shockwaves through global oil markets. Kenya imports a huge chunk of its oil from the Middle East. So, if oil supply chains get disrupted, expect pump prices to climb.
What is the likely impact on businesses from increasing oil prices?
Higher oil prices mean that there will be increase in transport costs. This will be translated to higher products (goods, services, digital downloads and software) prices. If you run a logistics company, a retail business, or even a manufacturing firm, your expenses will likely increase.
What to do?
There are several steps that you can take currently to minimise the impact on the oil prices on your business. The following are three activities.
a. Lock in oil contracts early if possible. These are oil purchase contracts so that your purchase prices will not be increased. If you are oil dealer, you have to be careful because some of your customers may want to lock purchase prices and you may not be able to supply them later. This may result in your business being prosecuted for failure to honour contracts.
b. Optimise delivery routes to cut unnecessary trips. This will help you save on fuel costs.
c. Consider alternative energy sources like solar for long-term savings. This is going to minimise your reliance on the oil (fuel, gas, etc.) and to caution againinst thee high fuel prices.
b. Supply Chain Disruptions
Many goods imported into Kenya; electronics, machinery, even some food products, pass through Middle Eastern ports. If shipping routes are blocked or interrupted, like what happened during the Red Sea attacks earlier this year), businesses could face shortages and longer wait times. This will affect business operations. Some business may have to close down.
What is the impact of supply chain disruptions on businesses
Just imagine what is going to happen to businesses when they cannot receive materials e.g. raw materials, finished goods from places like China because of the middle East Crises. Delays cause by transport hitches mean higher costs, interrupted manufacturing, unhappy customers and negative impact on the operations of the business.
What to do
There are many steps that you can take. However, here are three critical steps that you can take starting today.
- Diversify suppliers Look into sourcing from other regions like Asia or Europe where the shipping routes do not go through Middle East regions.
- Stock up on critical inventory if you rely on imports. It may be expensive but when your competitors will be struggling, you will not. You may find that you will sell to them.
- Communicate with customers about potential delays to manage expectations. It is important to discuss with your customers about the potential disruptions of the supply chain by the happenings in Middle East regions.
c. Weaker Shilling, Higher Import Costs
When global oil prices rise, Kenya’s import bill goes up, putting pressure on the shilling. A weaker currency means imported goods become more expensive. The prices of everything from raw materials to finished products will go up.
What is the impact of a weaker shilling on businesses?
Higher costs will affect the business operations and returns including the bottom line e.g. squeeze profit margins.
What to do
There are many things that you can do but here are three things.
- Hedge against currency fluctuations if you purchase in forex. Speak to your bank for advice.
- Focus on local suppliers where possible to reduce reliance on imports. Probably it is time to focus on local supplies especially where you use local raw materials or alternative.
- Adjust pricing strategically—don’t wait until costs eat into your profits.You can change the prices early and make sure you warn your customers.
d. Tourism Could Take a Hit
Kenya’s tourism sector relies heavily on international visitors, including from the Middle East. If the conflict escalates, travel advisories might scare off tourists, and airlines could reduce flights.
What is the likely mpact of the effects on tourism on businesse?
Hotels, tour operators, and even restaurants could see fewer customers. This is likely to affect all those other businesses that rely on tourism.
What to do
- Shift your marketing focus to domestic and other stable international markets.
- Offer special deals to attract local tourists. This may lead to an extra business line for you.
- Diversify revenue streams for example, if you operate a hotel, consider hosting business conferences or events.
e. Increased Security Risks
Kenya has faced terror threats linked to Middle East conflicts in the past. If tensions rise in the next couple of days, security could be tightened at ports, borders, and major cities. This is likely to slow down business operations in the country.
What is the impact of increased security on businesses?
When there is security risk, many businesses are affected adversely. Depending on the industry, the effects can have dire consequences. Delays in cargo clearance, and higher security costs are some of the potential negative effects.
What to do
There are many things that you can do but the following are two critical activities.
- Stay updated on security advisories to avoid risky areas.
- Invest in secure logistics that can track shipments and use trusted transporters.
What Kenyan Business Owners Should Do Now Because Of Middle East Conflict
- Stay Informed
Do not wait until oil prices double or your shipments get stuck. Follow reliable news sources (like The Star, Business Daily, or international outlets like Reuters) to anticipate changes.
- Build a Cash Cushion
If costs rise unexpectedly, having extra liquidity can save your business. Cut unnecessary expenses and set aside emergency funds.
- Strengthen Local Networks
The more you can source locally, the less exposed you will be to global shocks. Build relationships with Kenyan suppliers to reduce dependency on imports.
- Rethink Pricing Strategies
If costs go up, you might need to adjust prices. Be transparent with your customers. Explain why prices are changing to avoid losing them.
- Explore New Markets
If your usual customers are cutting back, look for other opportunities. Could you sell to neighboring African countries? Can you pivot to a different product line?
Final Thoughts
The Middle East conflict is not just a news headline. It is a real threat to Kenyan businesses. Oil prices, supply chains, and even tourism could take a hit. But with smart planning, you can minimise the damage.
Stay alert, adapt fast, and do not wait until it is too late. The businesses that survive crises are the ones that prepare for them.
What is your plan? Have you already felt the impact off Middle East conflict? Share your thoughts in the comments. Let us help each other navigate this.
