Strategy Note /

Kenya locusts: Swarm in southwest (negative)

    Hasnain Malik
    Hasnain Malik

    Strategy & Head of Equity Research

    Tellimer Research
    18 February 2020
    Published byTellimer Research

    Locusts remain a material risk for Kenya growth, inflation, FX rate and equities. The latest update on the migration of swarms has one worrying reference to southwest Kenya.

    In Kenya the migration of locust swarms has progressed broadly in line with UN FAO expectations over the past week, with one exception: a tea plantation in the southwest county of Kericho. This is closer to the agriculturally most sensitive areas of Kenya than the swarms observed thus far and, therefore, appears a negative development.

    "The situation remains extremely alarming in Kenya, Ethiopia and Somalia where widespread Desert Locust infestations and a new generation of breeding threatens food security and livelihoods in the region. The situation is less worrisome in Uganda and Tanzania." This quote from the UN FAO (United Nations Food and Agriculture Organisation) is blunt.

    We have written before on the economic (agriculture accounts for 35% of GDP, food drives 36% of the inflation index) and equity market (the large stocks are on premiums to historic valuation). Please see:

    Kenya: Locusts, another risk, 30 January 2020

    Kenya:  Locusts nearing agriculture, not a crisis yet, 13 February 2020