The uncertainty arising from disruptions in the flow of goods through the Strait of Hormuz has finally reached Kenya in the form of “tail risks.” Although we all quietly expected it, the announcement of a sharp rise in fuel prices mid this month has still come as a shock.
Economists describe the current situation as a “tail risk” because most models did not anticipate that the blockage of such a narrow waterway would occur, or, if it did, that it would have such far-reaching consequences for global supply chains and financial markets.
