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How Russia-Ucraina conflict can damage Kenya

Oil, import-export with the country already in inflation

23-02-2022 by Freddie del Curatolo

The armed conflict between Russia and Ukraine is also likely to have negative repercussions on the Kenyan economy, which in itself is not going through a good period, to put it mildly, due to both the aftermath of the pandemic and the political "scraping" for electoral campaigns and the relative reluctance of local investors to enter the market.
Like many other countries, Kenyans will be affected by the increase in energy and oil costs, of which Russia is the third largest exporter in Africa, and the loss of business due to the probable blockade that Putin's government will receive from the United Nations (despite the opposition of China and a few other nations that have sided with Moscow, while the NATO bloc is firm in supporting Kiev's reasons). Moscow has in fact been threatened with sanctions if it invades Ukraine by the Western powers, which include denying it the ability to trade using the dollar, crippling its ability to trade with countries like Kenya.
And that's no small thing: Kenya in fact buys grain from both the Russians and the Ukrainians, with imports coming in to meet 75% of its annual demand, which is about 1.2 million tons.
Maize flour remains the first source of sustenance for the population. The increase of "polenta" (sima) in the country has already been noticeable from a year ago, the package of "maize flour" has gone from 90, the price of a blockade imposed after a year of pandemic, to 126 shillings, bringing half the country to its knees. Thinking of a further increase would mean bringing at least half of Kenyans to hunger, considering that already with current prices, aggravated by drought and climate change, the number of citizens who can not afford more than one meal a day has increased by 33%. Even bread, another daily food of Kenyans, depends on the import of flour from Eastern European countries and so, going down further in social and economic category, the poor people also depend on the increase of 5 shillings of a samosa or a chapati, which are often the basic sustenance of the day.
The increase in oil costs is also linked to the cost of transport and electricity, so products that travel by road (but also cargo planes) and electricity bills could increase further.
As for the national economy, Russia has recently become the largest buyer of tea from Kenya and the block of trade, due to the war and the impossibility of dealing in dollars, would be a major damage for the chain of the small green leaf.
On the other hand, as far as diplomatic relations are concerned, the crisis on the Ukrainian front does not put Nairobi in much difficulty. Nairobi has always had good commercial relations (and contracted debts) with both the United States and China, but it also has a long history of collaboration and economic agreements with Vladimir Putin's Russia.

TAGS: kenya russiakenya petroliokenya importazioni

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