The dry weather witnessed in the long rains season from March to May will be the worst in 38 years, worsening food shortages, water scarcity and piling pressure on electricity bills.
Intergovernmental Authority on Development (Igad) says the rains have already failed and even if it rains now, farmers will not make any meaningful return from their farms because the planting season is already over.
The agency has warned that about 541,309 children under five in Kenya are at risk of malnutrition at the moment with the food shortage expected to get worse in the coming weeks.
"We should not be talking of whether it will rain or not because even if it rains now, the planting season has already passed and we should focus on dealing with the situation at hand," said Igad executive secretary Mahboub Maalim.
According to Igad, if the forecasted rainfall deficit comes to pass, it will lead to an increase in food insecurity and increase livestock movement.
"Dry conditions and high temperatures between January and March have led to deterioration of pasture and water availability affecting livestock body conditions and reduced milk production," Igad says.
Igad has warned that there is a likelihood of conflict in border regions between Kenya and Uganda as competition for pasture resulting from movement is expected to increase.
The so-called long rains season from March to May has fallen far below the long-term average for the period.
Patrick Njoroge, the Central Bank Governor, said the bank could lower its economic growth forecast for this year to 5.3 percent, from 6.3 percent, if the drought proves severe, the bank said on its Twitter account, quoting an interview he gave to Bloomberg TV in New York on Tuesday.
Blaming the recent dry weather, the World Bank has trimmed its forecast for Kenya's economic growth to 5.7 percent from 5.8 percent.
Farming, including tea, flowers and coffee exports account for close to a third of annual economic output.
The government said last month 1.1 million Kenyans, mainly in the arid counties of Turkana, Marsabit, Isiolo, Tana River and Garisssa, need humanitarian food assistance.
The Famine Early Warning Systems Network, which is funded by the United States Agency for International Development, blames the failure of Kenya's long rains on tropical cyclone Idai, which redirected moisture away from the region.