A shortage of basic food items pushed more supplies across Kenya's porous borders, with informal imports reaching Sh573 million in the year to June 2025, according to a new survey by the Kenya National Bureau of Statistics (KNBS).
Rice, sugar and milk made up the biggest share of the goods that entered the country outside formal import procedures, with their combined value reaching Sh145 million. Rice was valued at Sh63 million, followed by sugar at Sh45 million and milk at Sh37 million.
The figures point to the growing role played by cross-border traders in filling gaps in the local market, particularly when domestic production falls short of demand.
The trade covered goods brought into Kenya through border points without going through the usual formal declaration processes. It involved small-scale traders operating across neighbouring countries, while the same routes can also be used by traders seeking to avoid taxes and other costs associated with formal imports.
During the period covered by the survey, Kenya faced shortages of several food products, increasing the need for supplies from neighbouring countries.
KNBS Director-General Macdonald Obudho said informal trade provides an important link to food supplies, particularly when the country faces drought, shortages or low production.
"Informal cross-border trade contributes to macroeconomic stability and social development by enhancing food security and generating income, particularly for rural populations," he said.
"When effectively harnessed, it has the potential to complement Africa's ongoing efforts towards poverty reduction and sustainable economic growth."
Sugar was among the commodities whose availability came under pressure during the period after cane production declined. The reduced supply affected millers and contributed to higher prices in the local market.
At the same time, Kenya's formal sugar imports increased by about 90 per cent to 608,178 tonnes as the country sought to bridge the supply gap.
The shortage also appears to have encouraged additional sugar supplies through unofficial channels. The government is now examining informal sugar trade amid concerns that unregulated imports are affecting market prices and government revenue.
"The industry faces severe market distortions and inefficiencies, primarily due to unregulated cross-border trade. Kenya remains a net importer, producing approximately 72 per cent of its domestic sugar requirement in 2024, and the market remains vulnerable to illegal sugar inflows through porous borders, weak traceability systems and significant price disparities" the Kenya Sugar Board said in a brief.
"This informal trade undermines local producers, distorts prices, discourages investment and results in substantial loss of government revenue," it added.
The rice market also experienced a supply squeeze during the period. To increase availability, Agriculture Cabinet Secretary Mutahi Kagwe permitted the duty-free entry of 500,000 tonnes of rice from countries outside the East African Community.
However, rice continued to move through informal trading routes, with Tanzania emerging as the main source.
The KNBS estimates show that 43 per cent of rice brought into Kenya informally came from Tanzania, while Somalia and Ethiopia supplied the remaining share.
Milk was another major product in the informal trade, with drought playing a role in reducing domestic supplies in some parts of the country.
North-Eastern Kenya experienced prolonged dry conditions that resulted in livestock deaths and a decline in milk production. The shortage created demand for supplies from neighbouring Somalia, which borders the region.
Somalia supplied most of the milk that entered Kenya through informal channels and recorded milk as its leading informal export to Kenya during the period covered by the survey.
The KNBS findings are based on a survey conducted in December 2024 and June 2025. The assessment found that 10 commodities, including rice, sugar and milk, made up more than half of the total informal imports recorded during the period.
Other major products included cattle, goats, cooking oil, fish, beans, maize and new shoes.
The list also included oranges, groundnuts, maize flour, pasta, new women's clothes, mangoes, cassava, millet and packaging sacks and bags.
The flow of goods varied depending on the neighbouring country involved.
Uganda was a key source of fish entering Kenya informally. Traders also brought groundnuts, cassava, packaging bags, bananas and other fruits from Uganda.
Sugar moved into Kenya mainly from Somalia and Ethiopia, according to the KNBS estimates. The two countries also accounted for much of the milk brought into the country outside formal channels.
Tanzania's dominance in informal rice supplies reflects the importance of the country's border trade in meeting demand for the commodity. The rice trade involved traders operating outside the formal import system, allowing supplies to reach Kenyan markets without passing through all the standard import procedures.
The findings also show that informal trade is not a one-way movement of goods into Kenya.
Kenyan traders also supplied neighbouring markets, with informal exports valued at Sh618 million in the 12 months to June 2025. This was higher than the Sh573 million recorded in informal imports.
The difference means Kenya exported Sh45 million more through informal channels than it brought into the country during the period.
The survey provides a picture of the scale and variety of goods moving across Kenya's borders outside official trade systems. Food products dominated the list as households and traders sought alternative supplies when local markets faced shortages.
For sugar, however, the informal flow remains a concern for the local industry, which says uncontrolled imports can put pressure on local producers while reducing the amount of revenue collected by the government.
Rice supplies were boosted through both formal and informal channels as the country responded to shortages, while milk from Somalia helped meet demand in areas affected by drought and declining livestock production.
The findings further show that informal cross-border trade remains closely linked to conditions in local markets. When production drops or shortages emerge, traders turn to neighbouring countries to fill the gaps, while differences in supply between border communities continue to shape the movement of goods.
Kenya therefore remained both a market for goods from neighbouring countries and a supplier to the region during the period, with informal exports exceeding imports despite the Sh573 million worth of goods brought into the country outside official channels.