New report flags debt, food and security risks as Kenya enters election period

A new global peace report warns rising geopolitical
tensions, regional conflicts and economic shocks could complicate Kenya’s
economic outlook as the country heads towards polls.

 

The 2026 Global Peace Index, released by the Institute for
Economics and Peace, paints a troubling picture of a world becoming
increasingly unstable, with armed conflicts at their highest levels since the
Second World War.

 

At the same time, geopolitical tensions are creating new
economic vulnerabilities for countries far from the battlefields, the report
notes.

 

While Kenya is not among nations experiencing active armed
conflict, the report warns that the country remains exposed to the economic and
security fallout of crises in the Middle East and the Horn of Africa.

 

These developments are likely to influence some of the key
issues expected to dominate political debate ahead of the next elections.

 

Already, rising fuel prices caused by disruptions in the
Strait of Hormuz have created economic and political pressure on President
William Ruto’s administration.

 

The report ranks Kenya 132^nd out of 163 countries
in the peace index, an improvement of one place from the previous year.

 

Further, the report says Kenya is among countries engaged in
the most conflicts between 2020 and 2024, alongside the US, Niger, France and
Chad. All were involved in eight or more external conflicts, according to the
report.

 

The more consequential finding, however, lies in the growing
risks to food security, public finances and regional stability.

 

Among the report’s key warnings is Kenya’s exposure to debt
pressures at a time of heightened global uncertainty.

 

According to the report, Kenya, Egypt and Pakistan face debt
rollover obligations worth a combined $5.1 billion (Sh657.9 billion) towards
the end of 2026, a period that could coincide with disrupted agricultural
production and tighter global financial conditions.

 

“In November and December, Pakistan ($1.9 billion), Egypt
($2.3 billion), and Kenya ($0.9 billion) face large external debt maturities.
Under Scenario 2 [Extended ceasefire or stalemate of Iran war], rolling these
over at manageable rates is uncertain for all three. Under Scenario 3 [The war
resumes and the Strait of Hormuz is shut for an extended period], it is
effectively impossible,” the report says.

 

The study particularly notes that tight fiscal positions
make the imbalance worse.

 

Additionally, developing economies that import energy
entered the crisis with debt levels accumulated since Covid-19, reducing the
fiscal space they once had.

 

“For Sri Lanka, Pakistan, Egypt, Ghana and Kenya, the energy
shock raises spending demands, cuts revenues, pushes up borrowing costs and
threatens the IMF programme conditions that are, for many, the last line of
defence against default,” it adds.

 

The warning comes as the Kenya Kwanza administration
continues efforts to stabilise public finances after years of heavy borrowing while
seeking to create fiscal space for development programmes and social spending.

 

Any deterioration in global financial markets could increase
borrowing costs and constrain government spending at a politically sensitive
period when citizens are likely to demand greater economic relief and visible
development projects.

 

The report also highlights the potential impact of
escalating tensions in the Middle East on food production and prices.

 

It notes that Gulf countries account for a significant share
of global fertiliser inputs, including sulphur and urea, which are critical for
agricultural production worldwide.

 

Disruptions to supply chains resulting from conflict could
affect fertiliser availability and prices across East Africa, reducing
agricultural productivity and placing upward pressure on food prices.

 

Such developments in Kenya could have direct implications
for household budgets, farmers’ incomes and the broader cost-of-living debate.

 

The findings come as political campaigns begin taking shape
and parties position themselves around issues such as taxation, jobs, food
prices, healthcare and economic opportunity.

 

Historically, economic conditions have played a central role
in shaping voter sentiment, making food prices and household welfare likely battlegrounds
in the run-up to 2027.

 

The report suggests that some of the biggest challenges
affecting those issues may originate beyond Kenya’s borders.

 

Beyond the economic concerns, the report identifies the Horn
of Africa as one of the world’s most interconnected conflict systems.

 

Conflicts in Sudan, South Sudan, Ethiopia, Eritrea and
Somalia are increasingly linked through refugee flows, illicit trade networks,
competition for strategic resources and the involvement of external actors.

 

Kenya hosts refugees from several neighbouring countries.
For instance, the UN Commission on Human Rights in South Sudan last year said
renewed fighting had forced at least 300,000 people out of the country, with
25,000 ending up in Kenya.

 

Despite investing considerable diplomatic capital in peace
initiatives in Sudan, South Sudan and Somalia, the region’s peace and stability
remain fragile.

 

Instability in those countries can disrupt trade, increase
humanitarian pressures and create security concerns that ultimately affect
Kenya’s economy.

 

Globally, the report records the 12th consecutive year of
declining peacefulness, with more active conflicts than at any point since the
end of the Second World War.

 

The economic impact of violence reached an estimated $21.8
trillion in 2025, equivalent to more than 10 per cent of global economic
output.

 

Whether through food prices, debt obligations, trade
disruptions or regional insecurity, the costs of global instability highlighted
in the report are likely to become key issues in the 2027 campaigns and
elections.