By Kepher Otieno - Reporter
Kenya, 10 August 2026 - Kenya’s economy is heading into a potentially disruptive final quarter of the year as the government warns that a strong El Niño could expose businesses, farmers and infrastructure to a fresh wave of weather-related shocks.
The Kenya Meteorological Service Authority has forecast above-normal rainfall from October, putting the probability of a strong El Niño at 81% and the likelihood of its effects extending into early next year at 97%, according to a government risk assessment released on Monday.
For businesses, the warning is more than a weather forecast. It is an early signal of potential disruption across supply chains, transport networks, agriculture, construction, retail and essential services.
And the potential bill is already visible.
Interior Cabinet Secretary Kipchumba Murkomen, who previously served as Roads and Transport CS, said damage to roads and other transport infrastructure caused by El Niño rains and subsequent flooding had been estimated at Sh37.3 billion.
“Repairing the damage to roads and other transport infrastructure caused by El Nino last year and the recent flooding in the country will cost Sh37.3 billion,” Murkomen said in July.
The figure offers a sobering backdrop to the latest warning. Another severe rainfall cycle could put additional pressure on infrastructure that is still being repaired from previous weather shocks.
The government has identified 18 counties as high-risk, with exposure ranging from flooding and landslides to disease outbreaks, infrastructure damage and displacement. The Lake Basin, Coast, Rift Valley and North Eastern regions are among the most vulnerable.
That puts a large part of Kenya’s productive economy on notice.
In the Lake Basin, Kisumu, Busia, Siaya, Homa Bay and Migori face risks from flooding, landslides, disease outbreaks and displacement. These counties are important agricultural and trading zones, meaning prolonged disruption could quickly move from farms and roads into markets.
For traders and manufacturers, the biggest concern may be the movement of goods.
Flooded roads, damaged bridges and disrupted transport corridors can increase delivery times and operating costs. Businesses operating with thin margins have little room to absorb such shocks indefinitely.
Murkomen has already warned that flooding can disrupt the movement of people and goods. In July, he said damage to critical infrastructure had created major economic losses and affected the movement of goods, including from Lamu Port.
The implications stretch beyond transport.
A farmer unable to move produce to market loses income. A wholesaler facing delayed deliveries may raise prices. A manufacturer waiting for raw materials can suffer production interruptions. A retailer in a flood-prone area can face both damaged inventory and weaker customer traffic.
Urban centres are not insulated.
Nairobi, Mombasa and Kisumu have been specifically classified as high-risk, with flooding, blocked drainage systems, infrastructure strain and service disruptions identified as major threats.
For retailers, wholesalers and manufacturers, this could translate into interruptions in deliveries and higher operating costs. For households, it could mean pressure on food and other essential prices if transport and distribution networks are affected.
Agriculture faces an equally complicated picture.
More rainfall can be beneficial in drought-prone areas, but excessive rain can destroy crops, wash away soil and disrupt harvesting and transportation. The economic impact therefore depends less on rainfall alone than on whether farmers, roads, storage facilities and markets can withstand the shock.
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The Rift Valley illustrates the dilemma. Turkana, Baringo, West Pokot and Narok have been identified as vulnerable to drought, flash floods, landslides, livestock losses and food insecurity.
In North Eastern Kenya, Garissa, Wajir and Mandera face risks including drought, water scarcity, livestock losses, poor pasture and food insecurity.
The message for companies is clear: weather resilience is becoming a business issue.
Construction firms may face delays and higher costs. Transport operators could contend with damaged roads and disrupted routes. Insurers may face increased claims. Agricultural businesses may have to reassess procurement, storage and distribution strategies.
Financial institutions also have an interest in the outcome. Farmers and small businesses hit by floods, livestock losses or prolonged disruption may struggle to service loans, creating secondary pressure on lenders and local economies.
But the looming threat also creates an economic opportunity.
Demand could rise for drainage equipment, water storage, emergency supplies, construction materials, agricultural inputs, logistics services and disaster-response solutions. Businesses that prepare early could find themselves better positioned than those waiting for disruption before acting.
The government’s decision to map vulnerable counties and place emergency teams on high alert is therefore significant. The assessment says the identified counties have been prioritised according to their vulnerability, while additional areas may be included if experts identify further risks.
For Kenya’s private sector, the warning should trigger contingency planning rather than panic.
Companies with exposed warehouses may need alternative storage arrangements. Transporters may need contingency routes. Farmers and agribusinesses may need to review drainage, storage and harvesting plans. Retailers may need to reassess inventories in vulnerable markets.
The larger economic lesson is that climate shocks are no longer simply environmental events.
They are increasingly balance-sheet events.
The Sh37.3 billion infrastructure repair bill cited by Murkomen shows how quickly extreme weather can become a fiscal and business burden.
If the latest forecast materialises, the cost will not be measured only in flooded homes or damaged roads. It will also appear in lost working days, disrupted supply chains, higher transport bills, damaged inventories, weaker farm incomes and pressure on household purchasing power.
Kenya’s best defence, therefore, may be preparation.
The government’s early warning provides businesses with something more valuable than hindsight:
How effectively that warning is converted into stronger infrastructure, resilient supply chains and faster emergency response could determine whether El Niño becomes a manageable disruption — or another costly blow to economic activity.