The guns are firing in the Middle East. Kenya is picking up the tab.
The US‑Israel war on Iran has done more than rattle global oil markets. It has forced Kenya back into the arms of the World Bank and the IMF — and taxpayers are bracing for impact.
Last week, Nairobi signaled it needs emergency financing from the World Bank. Central Bank Governor Kamau Thugge put it plainly: concessional loans would replace expensive domestic borrowing, cut interest costs, and reduce debt vulnerabilities.
But cheap money comes at a price.
The IMF plays hardball.
Its terms are notoriously tough: reform State corporations, slash spending, raise revenues. Translation? New taxes. A crackdown on evaders. And the informal sector — traders, workers, everyone — finally brought into the net.
The World Bank is gentler: climate action, competition curbs, refugee integration. But make no mistake — both lenders froze Kenya’s funding in 2025 when it failed to meet conditions. A Sh96.8 billion loan was suspended.
Now, with the Iran war pressuring domestic revenues and remittances expected to slide, Kenya has little choice. The country must meet every performance criterion.
Foreign exchange reserves have already fallen by $1.3 billion (Sh167.9 billion) in just over a month — from March 5 to April 9. They now sit at $13.3 billion, enough for 5.7 months of imports. Healthy, but shrinking.
The IMF and World Bank remember Kenya’s broken promises. This time, they’ll collect.
For the ordinary Kenyan, the message is clear: the war in Iran is being fought twice — on distant battlefields and inside your wallet.