The performance of Kenya’s private sector declined in March and April as a result of the global fuel crisis prompted by a war in the Middle East involving Israel, the United States, and Iran.
According to a report by Reuters, the crisis hit most private sector players hard, leading to a sharp decline in consumer demand, although the pace of decline slowed slightly in April.
The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) rose to 49.4 in April from 47.7 in March. However, any reading below 50 indicates a contraction. The March figure was the first time since 2025 that the index fell below the 50 mark.
“Businesses in Kenya suffered a further decline in operating conditions in April, as increasing fuel prices lifted average cost burdens and dampened customer demand,” Reuters quoted Stanbic Bank as saying.
Amid pressure from the war-induced crisis, fuel prices were reset in mid-April by as much as 24.2%. Inflation rose to 5.6% year-on-year in April from 4.4% in March, according to data from the statistics office.
The survey indicated that declines in business activity were most pronounced in the wholesale and retail, agriculture, and services sectors.
“Concerns about rising costs, tied to higher transport expenses and the ability to secure supplies—especially from the Middle East and Asia—have weighed on output and new orders,” said Christopher Legilisho, an economist at Stanbic Bank.
Kenya’s statistics office said in late April that it forecasts the economy will expand by 4.9% in 2026. However, it warned that Sub-Saharan Africa remains highly vulnerable to shocks caused by the U.S.-Israeli war with Iran.
The economy grew by 4.6% last year, little changed from 4.7% growth in 2024, and below the finance ministry’s estimate of 5.0% for 2025.
