Ethiopia says Eritrea pushed 60 km into Tigray, Ebola reaches Kenya and Uganda's shilling passes 4,000.

East Africa's two biggest risks both crossed a border this week. In the north, Ethiopia told the UN Security Council that Eritrea had launched an "all-out invasion", and Eritrea answered by asking the Council to act against Ethiopia. In the south, a patient who traveled from DR Congo through Kampala died in Nairobi, giving Kenya its first case of an Ebola outbreak that has now killed 4,148 people. Money kept moving anyway. Central banks in Kenya, Tanzania and DR Congo held rates, Kenyan and Ugandan investors lined up for Dangote's refinery and a Nairobi supermarket chain went public. Somalia's armed political crisis links the two halves of the week: Mogadishu sits inside the Egypt-led Red Sea bloc that Ethiopia is now fighting on paper. The open question for the rest of the year is whether investors are pricing the war risk, or only the rate cycle.

What happened. Ethiopia wrote to the UN Security Council (UNSC) on Oct 8 that an "all-out invasion" by Eritrea left it no choice but to defend itself. Foreign Minister Gedion Timothewos said Eritrean forces advanced up to 60 km into Tigray, per Reuters. Ethiopia expelled 10 Eritrean diplomats, and the conflict monitor ACLED reported drone strikes, believed to be Ethiopian, on Eritrean forces near Adigrat, about 30 km from the border. Federal forces had retaken Mekelle from the Tigray People's Liberation Front (TPLF) on Oct 4.

Why it matters. This is the region's largest security risk of the year, and it now has a diplomatic track that can widen it. Abiy Ahmed, sworn in for a new five-year term, promised sea access "based on the principle of reciprocity", while Egypt, Eritrea, Somalia and Sudan said Red Sea security belongs to the coastal states. The stakes show in Ethiopia's own numbers: President Taye Atske Selassie told parliament that exports passed $11 billion for the first time, and a war on the Eritrean border puts that trade's route to the sea at risk. The UK and the US updated travel advice on Oct 7, and 36 rights groups asked the UN Human Rights Council for a special session. The UNSC has no Ethiopia meeting on its October program, so any session would be an emergency one.

Kenya notified the World Health Organization on Oct 6 of its first imported case of Bundibugyo virus disease, the Ebola strain behind DR Congo's outbreak. Health Cabinet Secretary Aden Duale said 28 contacts were traced. The patient reached Kampala on Oct 2, flew to Nairobi on Oct 3 and died on the night of Oct 5. Kenya is the fourth country to confirm the disease, per WHO.

The scale is the story. DR Congo counted 8,603 confirmed cases and 4,148 deaths through Oct 4, per its health ministry via the European CDC. WHO's own Aug 1 update counted 3,626 cases and 1,589 deaths, so the toll has more than doubled in about two months. Africa CDC's Wessam Mankoula says contact follow-up covers only 23% of the expected volume. In Swahili, Taifa Leo reported that doctors and nurses who treated the patient at Nairobi Hospital are resisting quarantine. WHO still advises against travel and trade restrictions, which protects the Kampala-Nairobi corridor for now.

The Central Bank of Kenya (CBK) held its rate at 8.75% on Oct 7, citing "higher energy prices arising from the conflict in the Middle East". Inflation rose to 6.8% in September from 6.6%, still inside the 2.5% to 7.5% band. The Bank of Tanzania (BoT) kept 6.25% for the quarter to December, and DR Congo's central bank held 12.5% at a meeting in Kolwezi, reported first in French by Zoom Eco.

The pressure shows up in currencies first. Ugandan banks quoted the shilling at 4,017 buying and 4,027 selling on Oct 5, a record low, against about 3,604 in March. Governor Michael Atingi-Ego said the Bank of Uganda (BoU) would not step in. Rwanda is the outlier, with inflation at 15.7% in August against a 5% target after three rate hikes this year. Kenya's fiscal squeeze adds to the case for caution: debt service is projected at 79.8% of ordinary revenue this fiscal year.

Kenya's and Uganda's Capital Markets Authority (CMA) regulators both cleared local investors on Oct 5 to buy into the Dangote Petroleum Refinery IPO, Kenya through global depositary receipts. The offer closes on Oct 13. The East African tranche is nearly 20% of an IPO of at least $1.6 billion, up to $300.4 million, per Nairametrics. The GDR price is reported as KSh 53.50 in one outlet and KSh 49 in another, so that detail is unresolved.

At home, supermarket chain Quickmart opened an IPO on the Nairobi Securities Exchange (NSE) on Oct 5 at Sh7.50 a share for two billion shares, about Sh15 billion, with the IFC committing about Sh1.94 billion. In London, Airtel Money priced at 196p for a £5.3 billion valuation and slipped 2.0% to 192.1p in its first session on Oct 9. The Nairobi All Share Index closed Oct 9 at 244.93, so the listings land on a flat market.

Somalia's federal government lost three towns in 48 hours, per Somali Guardian: Hees in Hiran to al-Shabaab, Balad Hawo in Gedo to Jubaland forces and Qansax Dheere in Bay to fighters loyal to ousted South West leader Abdiaziz Laftagareen. On Oct 11, armored units deployed near the Mogadishu homes of former President Sharif Sheikh Ahmed and former Prime Minister Hassan Ali Khaire, three days after Sharif called for "a broad and united national front to save Somalia."

The Somali-language press tells a softer story on one front. Goobjoog quoted Gedo police commander Col. Diyaad Abdi Khalil saying Jubaland forces entered Balad Hawo "peacefully" and that federal troops remain. The bigger risk is the timing: the opposition says the president's term ended on May 15, and Bloomberg reported Ethiopia plans to pull troops out of Somalia. President Hassan Sheikh Mohamud also told Al Jazeera that Somalia will not block Ethiopia's sea access on agreed terms, a hedge on the bloc he signed with Egypt.

■  The AU panel of Sahle-Work Zewde, Catherine Samba-Panza, Uhuru Kenyatta and Mokgweetsi Masisi met President Félix Tshisekedi in Kinshasa on Oct 10, as fighting continued around Kasake and Katoyi in Masisi (Actualite.cd, Radio Okapi, French).

■  South Sudan: Riek Machar's trial resumes Oct 14 and elections are set for Dec 22 (Radio Tamazuj).

■  Uganda's Foreign Minister Adonia Ayebare threatened to leave the ICC, and Justice Minister Norbert Mao pushed back in public (Daily Monitor).

■  DRC's subcontracting regulator ARSP reported 128 ineligible subcontractor registrations at three ERG units and 140 contracts under injunction at Ivanhoe group companies (Actualite.cd, French). Semafor's figure of $20 billion in such payments does not appear in the regulator's report and stays single-sourced.

■  Ethiopia's Capital Market Authority drafted a 50 million birr cap on online crowdfunding (The Reporter, Amharic).

■  The World Bank raised its 2026 growth forecast for sub-Saharan Africa to 4.3% from 4.1% (Reuters).

■  IMF staff reached agreement on Rwanda's first program review, worth about $35.7 million once the board signs off (IMF).

■  Kenya's health deal with the US is in force under a Court of Appeal stay, with reasons due Oct 30. Its value is reported as $1.6 billion in one outlet and higher in another (Nation, Kenyans.co.ke).

■  Burundi rejected the renewal of the UN rights rapporteur's mandate, passed 22 to 7 with 17 abstentions (Iwacu, French).

■  South Africa's sports minister congratulated Rwanda on a 2030 Formula One race. F1 has not confirmed it (EWN).

UNSC UN Security Council, the 15-member body that can authorize sanctions or force · TPLF Tigray People's Liberation Front, the party that ran Tigray · CBK Central Bank of Kenya · BoT Bank of Tanzania · BoU Bank of Uganda · CMA Capital Markets Authority, the securities regulator in Kenya and in Uganda · GDR Global depositary receipt, a certificate that lets investors hold a foreign company's shares on a local exchange · NSE Nairobi Securities Exchange

Kenya's inflation has risen three months running, and the CBK named Middle East energy prices as the reason. A fourth rise in October would put the band's ceiling in sight before the December meeting.

■  Dangote GDR. CMA Kenya approved the short-form prospectus on Oct 5. The offer closes Oct 13, and the NSE listing still needs approval from Nigeria's SEC (CMA Kenya).

■  Airtel Money. Full admission to the London Stock Exchange on Oct 14 after conditional dealings began Oct 9 (Hargreaves Lansdown).

■  Kenya budget. The Treasury's draft outlook paper puts the 2027/28 deficit at 5.7% of GDP. Semafor reported 5.9%, and the final paper was not found.

■  Critical minerals. US-backed Orion CMC is the preferred partner for Tanzania's Kabanga nickel project, about $940 million, with no deal signed (Bloomberg, Aug 5).

The African Union's new African Credit Rating Agency launched on Oct 7. Kenya has a reason to care: the AU's peer review body says the country lost Sh19.5 billion in its dispute over Moody's 2024 downgrade, per Business Daily. A home-grown rating will not move Kenya's borrowing costs by itself, but it gives every sovereign in this edition a second opinion to quote.

That's the week. Reply to this email, we read everything. And if Rwanda is on your radar, our sister edition Kilwa Rwanda goes deeper every Friday.

Kilwa East Africa · Monday, October 12, 2026 · Vol. 1 · No. 1 · Week 42

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Kilwa East Africa is produced by the Kilwa Research team from sources in English, Swahili, Amharic, Somali, French and Tigrinya. Figures carry their source and date, and unconfirmed reports are labeled. Kilwa Technologies is a research and data company, not an investment adviser. Nothing here is investment, legal or tax advice. kilwa.io