How Kenya’s 2025 protests are affecting regional trade and investment

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OPINION

By Caroline Mbura Muhindo

On June 25, 2025, thousands of protesters once again took to the streets of Nairobi and other major Kenyan cities, marking the anniversary of the bloody 2024 anti-tax demonstrations.

The protest, which began peacefully, quickly spiralled into deadly violence, leaving between eight to 16 people dead and over 400 injured.

The Kenyan government labelled the protest actions as “terrorism disguised as dissent,” while human rights groups have raised alarms about excessive use of force. Beyond the human cost, these events are sending tremors through Kenya’s economy, and for neighbouring countries like Uganda, the implications are increasingly difficult to ignore.

Kenya has long been a vital economic engine in East Africa, a regional anchor for commerce, diplomacy, and innovation. But its political unrest now risks undermining the very pillars of that stability.

From disrupted tourism and shaken investor confidence to diplomatic anxiety and regional trade exposure, the ripple effects are wide and significant.

One of the most immediate impacts is on Kenya’s tourism sector, which has historically been a top foreign exchange earner.

In 2024, the country welcomed 2.39 million international visitors, generating approximately KSh452b ($3.5b).

The 2025 target of three million tourists and KSh560b in earnings is now in jeopardy, with travel advisories likely and cancellations already surfacing.

This is especially damaging to coastal towns like Mombasa and wildlife circuits like the Maasai Mara, which are heavily dependent on tourism revenue and employment.

Additionally, Nairobi's position as a regional diplomatic and business hub is at stake. The city hosts the United Nations Office at Nairobi (UNON)—one of only four UN headquarters globally—and is the African base for numerous multinational corporations (MNCs), including Google, Microsoft, and Standard Chartered. These institutions depend on a stable environment for their regional operations.

A prolonged period of instability could prompt a relocation of offices to safer capitals like Kigali or Addis Ababa, which would affect not only Kenya, but also its regional partners, including Uganda, which depends on Nairobi for regional logistics and corporate coordination.

Equally vulnerable is Kenya’s position as the tech nerve center of East Africa. Known as the “Silicon Savannah,” Kenya attracted $638m in venture capital in 2024 alone, making up 29% of Africa’s total tech investment.

However, political instability creates uncertainty that threatens to slow funding, displace talent, and push start-ups to more predictable environments.

The ongoing crisis in Kenya poses significant regional risks, particularly for Uganda. Small and medium-sized enterprises (SMEs), the backbone of Kenya’s economy, have suffered due to frequent shutdowns in central business districts like Nairobi. These disruptions have reduced consumer activity and earnings, with ripple effects reaching Uganda.

Kenya is Uganda’s largest regional trade partner.

In 2023, Kenya exported goods worth $893m to Uganda—including cement, palm oil, and coated flat-rolled iron—while Uganda’s exports, mainly milk, raw sugar, and cereals, totaled $439m. Kenya’s exports have steadily risen, while Uganda’s have slightly declined, highlighting a growing trade imbalance and exposure.

Instability in Kenya’s transport and manufacturing sectors directly affects Uganda’s supply chains and market access, especially for perishables. Disruptions at Mombasa port or along the Northern Corridor could spike prices and delay imports.

Moreover, Kenya’s fiscal challenges, including tax hikes amid 70% debt-to-GDP, risk further unrest. Youth unemployment—54% of the population is under 25—adds pressure.

In conclusion, Kenya’s 2025 protests are a regional concern. Uganda and its neighbours must support efforts that restore calm, promote inclusive governance, and ensure economic resilience across the East African Community.

The writer is the International Relations Analyst and Executive Director at Diplomacy Ignited -Initiative