Kenya could see millions more people pushed into poverty this year as the economic shock from the ongoing Middle East conflict ripples through fuel prices, food costs and household incomes, according to a new World Bank warning.
In its April 2026 Africa Economic Update, the World Bank says Kenya’s poverty rate could rise by between 2 and 4.5 percentage points, depending on how much higher fuel prices spill over into the broader economy. That, the report says, could force between one million and 2.4 million more Kenyans below the poverty line.
“In Kenya, microsimulation estimates suggest that the poverty rate… could be 2 to 4.5 percentage points higher in 2026, depending on the extent to which higher fuel prices are passed through to economywide prices,” the report states.
“This would translate into an additional 1 million to 2.4 million Kenyans falling below the poverty line. Urban households are projected to be more heavily affected.”
The warning lands at a time when many households are already struggling to keep up with the cost of living. For families surviving just above the poverty threshold, even small increases in transport fares, cooking fuel, or food prices can quickly push them into crisis.
The World Bank notes that a growing number of Africans, including many Kenyans, now fall into a vulnerable category — not officially poor, but living only slightly above poverty and exposed to any economic shock. For these households, the rising cost of basics could erase years of gradual progress.
At the heart of the concern is Kenya’s dependence on imports linked to the Middle East. The country sources more than half of its petroleum products from the region, while a significant share of fertiliser used by farmers also comes from there. Any disruption in supply or higher global prices feeds directly into the cost of transport, farming and food production.
That matters deeply in Kenya, where public transport remains the main way millions move to work and school. Once fuel costs rise, fares often follow. When transport costs go up, food prices usually do too, as traders pass the extra cost to consumers.
Urban households are seen as especially exposed.
Unlike rural families who may rely partly on subsistence farming, many city residents buy nearly everything they consume — from food and water to transport and rent. That makes them far more vulnerable to inflation shocks.
The report also raises concern over falling remittances, another key support system for Kenyan households.
About 500,000 Kenyans are estimated to work in Gulf countries, many sending money home to support relatives. But the World Bank says the conflict could disrupt those flows, with Kenya potentially losing up to Ksh5.17 billion ($40 million) in remittances every month if the crisis persists.
That would be a major hit for families that depend on money from abroad to pay school fees, rent and medical bills.
The report says the impact could go beyond short-term hardship if the conflict drags on.
A prolonged crisis, it warns, could cause fertiliser shortages ahead of planting seasons, lower agricultural production and trigger even higher food prices in the months ahead.
What worries economists is that these pressures are coming just as growth expectations have weakened.
The World Bank has cut Kenya’s 2026 growth forecast to 4.4 per cent, down from an earlier 4.9 per cent, citing external risks linked to the conflict.
While agriculture and construction had shown resilience, the bank says those gains are now being threatened by rising costs, weaker demand and broader uncertainty.
Across Sub-Saharan Africa, the World Bank has also lowered the region’s growth outlook to 4.1 per cent, warning that rising fuel and fertiliser costs, heavy debt burdens and global uncertainty are creating a much tougher environment.
Still, the report does not paint only a bleak picture.
It points to Kenya’s horticulture sector as proof that long-term public investment can pay off.
The bank highlights decades of support for institutions such as the Kenya Plant Health Inspectorate Service and strong export standards that helped turn cut flowers and vegetables into a major foreign exchange earner.
It also notes Kenya spends about 0.81 per cent of GDP on research and development — among the highest rates in Africa and close to the African Union target.
The lesson, according to the bank, is that strategic public investment can strengthen resilience even during external shocks.
Officials also acknowledged government efforts to cushion consumers, including adjustments to fuel levies and the use of stabilisation funds instead of broad subsidies.
But the World Bank says those measures alone may not be enough if pressure continues.
“Targeted policy measures can help mitigate these risks,” the update notes.
It says expanding social safety nets, improving how public money is spent and protecting vulnerable households should now be priorities.
World Bank Division Director for Kenya Qimiao Fan has also previously warned that Kenya’s bigger challenge remains weak job creation and low incomes, particularly for young people.
That is part of what makes the new warning more serious.
This is not just about rising prices.
It is about households already stretched thin being asked to absorb another shock.
If fuel keeps climbing, remittances continue falling, and food costs rise further, analysts say the impact may be felt most in ordinary homes long before it shows in headline economic data.
For many Kenyans, the risk is simple: the economy may still be growing on paper, but daily life could become much harder. And if the conflict runs deep into the second half of 2026, the World Bank suggests the damage may not stop at higher poverty levels; it could reverse years of fragile gains.
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