(KISUMU) – Kenya is facing a sharp rise in food prices and increased pressure on government finances as a result of the widening economic fallout from the Iran conflict, a new global report warns. The analysis, released this weekend, indicates that fragile economies across the region are set to absorb a heavy blow from supply chain breakdowns and financial market turmoil.
The Global Peace Index 2026, published by the Institute for Economics and Peace, places Kenya among the countries most exposed to the indirect effects of Middle Eastern instability. Its findings carry direct relevance for South Sudan, which depends on the same import routes, fuel supplies and regional trade networks to keep its markets functioning. The report says the full economic weight of the Iran war is still building and will become clearer towards the end of the year.
One of the most urgent concerns is food production. The Gulf region supplies roughly 45 per cent of the world’s sulphur and 50 per cent of global urea, both essential for making fertiliser. Disruption to these supplies coincides with the second quarter planting season across East Africa, meaning the resulting shortfall in harvests will arrive in late 2026 and early 2027. For South Sudan, where agriculture is the backbone of household survival and a key part of national economic planning, any rise in fertiliser costs or drop in availability directly threatens crop yields and market stability.
Alongside the threat to harvests, the report draws attention to a dangerous cluster of debt obligations falling due in November and December 2026. Pakistan, Egypt and Kenya together face roughly 816 billion Kenyan shillings in debt rollovers. At the current exchange rate, this sum equates to approximately 6.3 billion US dollars, or about 36.5 trillion South Sudanese pounds. While South Sudan’s external debt profile is different in scale, its economy is tightly linked to the financial health of its neighbours. Pressure on regional currencies, reduced cross border trade and higher borrowing costs would flow into Juba’s markets through multiple channels.
The report estimates that the global economic impact of violence reached an extraordinary 3.5 quadrillion Kenyan shillings in 2025, a figure that translates to roughly 27 trillion US dollars or approximately 156.5 quadrillion South Sudanese pounds. This sum is equal to 10.5 per cent of global economic output. Military expenditure alone accounted for 1.57 quadrillion Kenyan shillings, equivalent to about 12.1 trillion US dollars or roughly 70.2 quadrillion South Sudanese pounds, a figure the authors describe as a signal of an increasingly fractured global security landscape.
East Africa’s vulnerability is compounded by what the report terms the interlocking nature of conflicts in the region. The crises in Sudan, Ethiopia, Eritrea, South Sudan and Somalia are now connected through pathways that allow instability to travel, including refugee flows, arms movements and disrupted trade corridors. The Iran conflict acts as a force multiplier, raising prices in import dependent states and drawing the attention of Gulf countries that have historically provided investment and aid to the region. The strategic value of Red Sea ports is also growing, as global shipping lanes face new threats.
For South Sudan, the implications are practical and immediate. Fuel imports, which move through East African transport corridors, will become more expensive if global oil prices jump and supply routes are interrupted. Food items that markets in Juba and other urban centres rely on, from maize flour to cooking oil, will reflect higher production and shipping costs. Household budgets already stretched by existing price levels will come under additional strain, while government revenues, still heavily dependent on oil exports, could be hit by price swings in global energy markets.
The report suggests that governments across the region should prepare for a prolonged period of economic uncertainty, where external shocks are no longer rare events but regular features of the financial calendar. For South Sudan, that means strengthening regional coordination on trade, monitoring fertiliser and fuel supply chains closely, and ensuring that fiscal buffers are built where possible to cushion the impact on ordinary citizens. The warning is not about distant battlefields but about market stalls, farm plots and the cost of a daily meal.