Category: Business Daily

An estimated five million households will be connected to electricity under a Sh114 billion ($880 million) World Bank-backed project that mainly seeks to light up rural Kenya.

The project, dubbed Accelerating Sustainable and Clean Energy Transformation (ASCENT-Kenya), is funded by the World Bank and other financiers and marks Kenya’s latest efforts to achieve universal electricity coverage by 2030.

ASCENT-Kenya will also see 7,500 public education institutions and 2,500 public health facilities linked to electricity, which will significantly boost their service delivery.

Kenya’s electricity coverage stood at 74 percent in 2024, and disclosures from the Ministry of Energy and Petroleum show that 13 million, mostly in semi-arid and remote regions, still lack reliable power, a gap that ASCENT-Kenya seeks to plug.

The project will involve solarisation of existing diesel-powered mini-grids, building new mini-grids, subsidisation of clean-cooking appliances to bolster uptake, and setting up battery storage for renewable energy.

‘Accelerating Sustainable and Clean Energy Transformation (ASCENT-Kenya) will aim at assisting Kenya in achieving universal electricity access ahead of 2030 and significantly scale up access to clean cooking technologies and fuels,’ the ministry notes in disclosures.

‘More than 13 million people, mostly in arid and semi-arid and remote regions, still lack reliable power, and the pace of new connections has slowed. Achieving universal access by the year 2030 will therefore depend on scaling Distributed Renewable Energy solutions, alongside continued grid expansion.’

The new connections are expected to open up new economic fortunes, improve the quality of life and boost Kenya Power’s electricity sales and earnings.

International Development Association (IDA), the arm of the World Bank tasked with helping low-income countries to expand universal energy access via concessional loans and grants, will provide $450 million (Sh58.23 billion) or slightly more than half of the $880 million for the project.

Co-financiers will top up the remaining $430 million, helping Kenya to move closer to its ambitious plan of lighting up more homes and public institutions in the areas outside the national grid.

Kenya had targeted to achieve universal energy access by 2030, but a slowdown in new connections and reduced funding from the Treasury have hit the ambitions.

There are currently over 10.2 million customers connected to Kenya Power, and this number is set to increase significantly through ASCENT-Kenya.

Last Mile Connectivity project and the Kenya Off-Grid Solar Access Project (KOSAP), which are heavily funded by the World Bank and the African Development Bank (AfDB), have been the key drivers of new connections in the last few years.

Customers within 600 metres of the marked transformers automatically qualify for Last Mile Connectivity, where they pay a subsidised fee of Sh15,000 while KOSAP links customers to mini-grids that are either solar or diesel-powered.

Under Last Mile Connectivity, 50 percent of every purchased token by a beneficiary goes towards paying the Sh15,000 loan.

The Ministry of Energy and Petroleum estimates that some $1 billion (Sh129.4 billion) is needed to achieve universal electricity access in Kenya, highlighting the funding gap that has forced the country to rely on development partners like the World Bank and AfDB.

The value of loans tapped from Kenyan banks for which borrowers have not serviced for at least three months fell by Sh40.1 billion in the year to June 2026 amid a decline in borrowing rates that have eased pressure on customers.

Central Bank of Kenya (CBK) data shows gross non-performing loans (NPLs) fell to Sh688.2 billion by the end of June from Sh728.5 billion a year earlier even as the banking sector expanded lending.

Gross loans increased by Sh498.2 billion or 12 percent to Sh4.65 trillion from Sh4.15 trillion over the period, pointing to an improvement in asset quality as lenders grew their loan books.

The decline in bad loans came as CBK eased its monetary policy stance, cutting the Central Bank Rate (CBR) to 8.75 percent at the end of June, from 10.75 percent a year earlier. The rate was last reduced in December 2025 from 9.25 percent to 8.75 percent and has remained at that level to date.

Lenders say the lower policy rate has gradually reduced borrowing costs, offering relief to households and businesses servicing loans and easing repayment pressure. CBK data shows average lending rates fell to 14.37 percent in June, compared with 15.28 in the same period last year.

The sector’s improvement in asset quality coincided with improved profitability across the banking sector. CBK data shows banks’ cumulative profit before tax rose 16.4 percent to Sh172.4 billion in the six months to June 2026, up from Sh148.1 billion in the same period last year.

The latest figure represents the fastest growth in half-year net profit performance in four years. It is dwarfed by a 24.1 percent rise in pre-tax earnings to Sh119.7 million that the sector posted in six months ended June 2022 on recovery from the dip posted in the previous period due to Covid-19 pandemic disruptions.

The reduction in the stock of non-performing loans was more pronounced among large banks, with KCB Bank Kenya and Equity Bank Kenya on top. This came in the period the two banks stepped up recoveries especially from large corporates.

‘NPL improved as targeted resolution initiatives, including recoveries, rehabilitations, full and final settlements, government engagements on associated entities, and strategic write-offs, delivered positive outcomes,’ said KCB.

Data on the 11 Nairobi Securities Exchange (NSE)-listed banks, which includes all the nine lenders classified as large, showed combined gross NPLs from Kenyan banking operations fell by Sh51.56 billion, or 8.8 percent, to Sh534.18 billion in June this year from Sh585.74 billion a year earlier.

The larger decline among the listed lenders compared with the Sh40.1 billion sector-wide reduction suggests the figure was offset by increases in defaults among some medium and small-sized lenders during the review period.

Kenya’s pesticide use has reached a record high, highlighting the country’s growing dependence on chemical crop protection even as health and environmental risks rise.

Data from the Food and Agriculture Organisation (FAO) shows pesticide use in Kenya increased to 6,953 tonnes in 2024, up from 444 tonnes in 1990.

This places Kenya ninth in Africa for pesticide use and second in the region, behind Uganda’s 11,293 tonnes.

Fungicides and bactericides accounted for the largest share at 3,133 tonnes, followed by herbicides at 2,476 tonnes and insecticides at 1,335 tonnes. Rodenticides made up only nine tonnes.

The figures underscore the central role pesticides play in protecting crops from pests, weeds and diseases. For farmers, chemicals remain essential to prevent losses and maintain yields. But the huge use comes with pressures such as surging illegal import markets and hazardous chemicals.

A recent report by Route to Food Initiative (RTFI), a programme of the Heinrich Böll Foundation, showed that more than two-thirds of Kenya’s pesticides were classified as highly hazardous pesticides (HHPs).

According to FAO, HHPs are a class of pesticides acknowledged to present high levels of acute or chronic hazards to human health and the environment.

‘Maize, wheat, coffee, potatoes, and tomatoes in Kenya require the largest volumes of pesticides, with a heavy reliance on HHPs,’ the Route to Food report notes.

According to the report, maize, a staple food for most Kenyan households, relies on 40 different active ingredients for pest, disease, and weed control, with 83 percent of the pesticide volume categorised as HHPs.

In 2020, the National Assembly Committee on Health highlighted the complex problems that emerged due to increased exposure to agrochemicals.

The Committee’s report, in response to a public petition, was a political statement about the serious public health concerns and environmental consequences of pesticides and their misuse.

This is a key issue in Africa, where many countries hold stockpiles of obsolete or highly hazardous pesticides that remain a risk long after use has ended.

The costs of relying on pesticides extend beyond the direct expenses farmers incur for chemicals.

Long-term pesticide exposure has been linked to a range of health concerns. In the Caribbean, high rates of prostate cancer and multiple myeloma have been reported, with prolonged pesticide exposure identified as a contributing factor.

Environmental costs are significant. Weed killers can contaminate rivers and coastal waters, harming fish and damaging sensitive ecosystems such as coral reefs. Discarded pesticide containers also pose risks to livestock and wildlife.

The persistence of some pesticides highlights the scale of the challenge. In Guadeloupe and Martinique, contamination from the insecticide chlordecone remains decades after its use was banned.

To reduce the use of HHPs, the report recommends implementing integrated pest management strategies such as biological controls, crop rotation and reduced reliance on synthetic pesticides.

Also, promote access to knowledge and information to support informed decisions about sustainable agricultural practices, including pest and disease management.

Lastly, support research efforts to develop and promote biopesticides and biocontrol methods as alternatives to highly toxic pesticides.

Africa’s agricultural sector accounts for roughly a fifth of the continent’s GDP yet receives less than 5.0 per cent of commercial bank lending. For two decades, guarantee funds, blended finance facilities, and donor-backed risk-sharing mechanisms have worked to close that gap, with real but uneven progress. Now the risk landscape they were built for is shifting, and the tools need to shift too.

Three lessons stand out from years of engagement with banks and value chain financing. Guarantees alone don’t move money; capacity does: a $6.9 million guarantee facility in Kenya unlocked a $32 million loan portfolio only because it was paired with technical assistance for banks and borrowers.

Partner selection matters as much as guarantee size: risk-sharing with well-capacitated banks achieved roughly 10 times leverage, more than double the Kenya ratio. And some of the most valuable work isn’t the money at all: absorbing the risk of untested approaches early, then sharing what worked, is a public good in itself.

This experience was mostly built handling idiosyncratic risk, meaning one farmer’s bad season or one client’s default, which banks can increasingly manage with better data.

But a different risk is growing faster: systemic, covariate risk (variable not of primary interest) that hits an entire region at once, as seen this year in fertiliser price shocks from the Iran conflict’s disruption of trade routes, and a super El Niño building for late 2026 into 2027.

No bank can diversify away a risk that hits its whole loan book at once. That isn’t a confidence problem private capital will eventually solve; it’s structural, and public capital is specifically suited to absorb it.

African governments have already committed to this. The Kampala CAADP Declaration calls for at least 10 percent of public expenditure to go toward agrifood systems, with $100 billion mobilised by 2035, and names resilience to climate, health, and economic shocks as a core pillar.

The complication: this is the third time the target has been set, after Maputo in 2003 and Malabo in 2014, and tracking already shows some regions falling short again. What needs to change is what the money is spent on.

Much of today’s agricultural support, in Africa and among OECD countries alike, isn’t idle; it’s actively working against resilience.

Globally, governments spend more than $840 billion a year supporting agriculture, and roughly two-thirds of producer-level support comes in the most market-distorting forms: payments tied to specific commodities or inputs rather than outcomes.

Coupled support like this discourages the diversification that builds climate resilience and locks farmers into patterns that make sense only as long as the subsidy lasts.

In Africa, input subsidy programs remain politically popular and fiscally significant, but they’re structured around maintaining current yields rather than building the buffers, such as soil health, water management, and diversified income, that let farmers absorb a bad season without a full-blown crisis.

This is why the case isn’t simply “find money to redirect toward guarantees.” It’s “recognize that some of what we’re already spending is making the problem worse.”

The lessons from guarantee work don’t need to be discarded; they need redirecting. Three shifts would move guarantee mechanisms from covering generic default risk to managing climate risk specifically.

Trigger design tied to climate events, not just loan performance. Guarantees can use parametric or index-based triggers, such as rainfall thresholds, satellite-observed drought indices, and temperature anomalies, that release coverage automatically when a covariate climate event hits a region, rather than waiting for it to show up loan by loan.

Regional parametric insurance schemes have already shown payouts reaching governments within weeks of a confirmed drought or cyclone.

Layered capital stacks that separate ordinary risk from tail risk.

A guarantee facility can carry a first-loss tranche for ordinary credit risk, and a second, climate-specific tranche, potentially reinsured regionally or globally, that activates only for systemic, weather-driven losses. Donors absorbing the first-loss layer can catalyse several times that amount in commercial lending banks would otherwise consider too risky, so scarce public capital concentrates on the risk private markets can’t diversify away.

Conditioning guarantee eligibility on resilience-building practices. Coverage, or preferential pricing on it, can be tied to farmers adopting practices that measurably reduce climate exposure: drought-tolerant varieties, soil and water conservation, diversified cropping. This turns the guarantee from a purely financial tool into one that actively drives the resilience it’s meant to protect.

Each of these mechanisms depends on observing, at scale and low cost, what farmers are actually doing, something that used to require expensive field verification.

AI tools combining satellite imagery, weather models, and yield analysis can now verify farming conditions for millions of smallholders far more cheaply and extend to guarantee design: confirming whether a farmer planted a drought-resilient variety, setting more accurate localized triggers, and scoring producers without formal credit histories.

None of this requires new money nobody can find. It requires applying what guarantee work has already taught us, about leverage, partner selection, and paired capacity-building, to the risk that’s actually growing, using tools only now becoming affordable. Ordinary risk is a job for banks and better data. Climate shocks are a job for public capital, structured to unlock private capital. The Kampala Declaration already gives us the vehicle. The question is whether we finally use it.

‘We mainly focus on the export of livestock to the GCC [the Gulf Cooperation Council] countries. We have the capacity to handle one million goats and lambs in a year,’ Willy Laboso told BDLife in an interview during the Kenya Meat Expo 2026 held at KICC in Nairobi.

The company operates a meat processing facility at the Export Processing Zone (EPZ) in Athi River, Machakos County, and sources livestock from pastoralists and aggregators, particularly in the arid and semi-arid land areas, before slaughtering, processing and supplying the animals to local and overseas markets.

The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, a region that has emerged as an important destination for Kenyan livestock and meat products.

The growth in export-oriented meat processing comes as Kenya seeks to increase the value generated from its livestock sector.

Sh397 billion market

According to data from the Ministry of Agriculture and the State Department of Livestock Development, Kenya produced approximately 613,627 tonnes of meat in 2024, with an estimated market value of Sh397 billion.

‘This represented a 10.2 percent increase in production volume and a 30.5 percent rise in value compared with 2023, highlighting the growing economic importance of the meat industry,’ said Agriculture Cabinet Secretary Mutahi Kagwe during the opening of the expo, the annual event organised by Nation Media Group.

Beef remained the largest contributor, accounting for about 260,000 tonnes valued at approximately Sh160 billion in 2024. However, Mr Kagwe said the country needs to diversify the meat industry by investing in goat meat, mutton, poultry, camel meat, pork and emerging value chains such as rabbit meat, an opportunity for investors.

Ken Meat’s success model has been on value addition, as the company handles slaughtering, processing, packaging and cold storage. Its facility can slaughter up to 6,000 goats and sheep a day and 350 cattle daily, according to Mr Laboso.

How export market works

One of the key challenges faced by meat entrepreneurs is securing a sufficient and consistent supply to meet export demand.

Mr Laboso said the meat export business starts much earlier than the slaughterhouse. It depends on an extensive network of pastoralists and livestock aggregators who supply animals from different parts of the country.

Ken Meat works with suppliers in Garissa, Wajir, Kajiado and Machakos, among other areas.

Over the years, the company has worked with about 500 pastoralists and aggregators, although the number varies as some livestock keepers are not tied to particular aggregators. ‘We work with aggregators and pastoralists, purchasing the lamb and goat for local and export purposes,’ he says.

The model has enabled the processor to connect livestock keepers in dryland areas with both domestic and international markets, while allowing the company to aggregate sufficient numbers of animals for its processing and export operations.

Spotting an opportunity

For meat exporters, other challenges include identifying market opportunities and scaling the business without compromising supply, quality or delivery.

Ken Meat started out as an aggregator before shifting toward processing and working with other aggregators. Mr Laboso says the transition was largely driven by the need to make the business more efficient.

‘We were looking for markets outside. We found it more profitable working with people who already have markets, so that we just offer the logistics services,’ he said.

Under the model, a customer with an overseas order can contract Ken Meat to handle the processing and delivery. The company slaughters the animals, packages the meat and facilitates delivery to the customer’s destination.

The shift has also enabled the company to concentrate on processing while relying on aggregators to consolidate livestock from different pastoralists.

Weighing opportunities

Entrepreneurs are constantly weighing opportunities, deciding which are worth pursuing and which are better left on the table.

Mr Laboso said the company does not currently operate a livestock fattening facility and instead focuses on export of carcasses, but also serves the domestic market, particularly with beef and value-added meat products.

While small ruminants dominate its export business, cattle are mainly processed for local consumers. Ken Meat can process about 300 to 400 cattle a month, depending on the season, according to Mr Laboso.

It also focuses on prime cuts are rump steak, topside, strip loin, T-bone, silverside steak and Ossobuco.

Mr Laboso said value addition allows processors to utilise more parts of an animal rather than leaving trimmings and other portions as waste.

‘You cannot deal in cuts without having value addition because when it comes to value addition, there are specific weights that are needed by consumers and that comes along with trimmings,’ he said. ‘If not value-added, then it will be considered as waste. Value addition ensures that at the end of the day there is no by-product in the value chain. Every part has its margin.’

Export challenges

Securing access to a reliable, export-compliant slaughterhouse is another challenge facing meat exporters.

The government seeks to improve the infrastructure supporting the meat industry. Mr Kagwe said Kenya has about 2,000 slaughter facilities, including approximately 49 large slaughterhouses and 322 medium slaughterhouses, alongside slaughter slabs.

However, he cautioned that the country should focus not only on the number of slaughter facilities but also on their quality, capacity utilisation, hygiene, refrigeration, inspection, waste management, environmental management, logistics and market connectivity.

The export business has also made compliance and traceability increasingly important. Mr Laboso said traceability is one of the areas the company is working to strengthen as Kenya seeks access to larger and more lucrative markets.

He said the company is keen to work with more pastoralists and aggregators who can meet traceability requirements.

‘Traceability will lead us to better markets out there and not just be fully dependent on one region of the world,’ he said.

The Government’s Animal Identification, Registration, Traceability and Tracking system (ANITRAC), a digital livestock identification and traceability platform, could help address some of these challenges. The system is intended to enable animals to be tracked through the value chain, providing information that can support disease control, food safety and access to export markets.

On challenges in getting adequate supply, Mr Laboso compared the situation to crop farming, where farmers depend on rain.

Changes in weather conditions can affect the availability and quality of animals supplied to processors. ‘We need more aggregators in the field because pastoralists usually depend on nature. It is like the farmer who fully depends on rain. So, when the variations of nature change, so does the availability of raw material,’ Mr Laboso said.

The company is consequently looking for stronger relationships with aggregators and pastoralists to improve access to livestock throughout the year. For the wider meat industry, Mr Laboso said increasing the supply of quality animals would help Kenya take advantage of the demand for meat both locally and internationally.

He said the high price of beef in the domestic market is an indication of the demand that exists, while Kenya’s livestock products continue to attract buyers abroad.

‘The demand that is there for beef in the country is purely evident also in the pricing of beef right now. If you go to the supermarket and see how much beef costs compared to other domesticated animals that we eat, you will see that beef is quite expensive, and it is because of its demand,’ he said.

Ken Meat currently employs about 200 people, up from 150 when it started, according to Mr Laboso. The growth in employment shows the expansion of its processing operations and the need for labour across slaughtering, processing, packaging and other functions.

Flexibility, Mr Laboso said, has been one of the key lessons that has enabled the company to grow, particularly as it transitioned from an aggregator to a processor and logistics provider.

‘One aspect that any entrepreneur needs is to not be rigid but to be flexible and to change with the times,’ he said, adding that the decision to work with aggregators while providing processing and logistics services demonstrates the company’s ability to adapt its business model to changing market conditions.

Multiple insiders familiar with the airline’s turnaround plans revealed behind-the-scenes intrigues that saw a strategic investment offer scuttled in January 2026 after interest groups demanded that the ‘field be opened to more players’.

At least four firms had expressed interest in KQ, as the airline is popularly known, with proposals including cash injections or providing airplanes in exchange for a strategic equity stake in the airline. ‘There was an investment offer around January that was about to be sealed, but some interest groups emerged and started pushing for opening doors for more parties,’ a source told Business Daily.

Sources said this tussle prompted the airline to revert to a tender system to recruit a strategic investor, further delaying the turnaround plans.

Consultancy firm KPMG was picked to prepare an investment memorandum to guide the tender, with the KQ board approving the document.

The international tender for a strategic investor is, however, yet to be floated nearly seven months after the earlier investment offer was scuttled.

KQ board chairman Kiprono Kitonny said the tender plans remain on course and denied claims of fallouts over the strategic investment following Mr Kamal’s abrupt exit.

‘We are all on the same page. We have the investor memorandum that has been done by KPMG, and now we’re in the process of appointing a transaction advisor,’ Mr Kittony told the Business Daily, adding that the open tendering process is the ideal situation since KQ is a publicly listed company.

KQ has been searching for a strategic investor for years, with the latest push coming as the airline grapples with mounting financial pressures and negative equity. The carrier posted a Sh17.2 billion net loss in 2025, reversing a Sh5.4 billion profit a year earlier, while its first-half loss widened further to Sh16.1 billion in 2026.

The plan has also evolved from a search for a single cash investor into a broader exercise that could involve different forms of capital and strategic support.

President William Ruto’s government had previously sought a strategic investor for its 48.9 percent stake in KQ. In December 2022, Dr Ruto met executives of Delta Air Lines in Washington, amid efforts to attract the US carrier as a potential strategic investor. The discussions crumbled as the carrier explored a merger with South African Airways, which also failed to materialise.

Former CEO Allan Kilavuka subsequently continued the search. In August 2024, he said KQ was close to concluding negotiations with a potential investor, although the talks did not result in an investment.

The latest capital target has grown from an initial $500 million (Sh65 billion) to roughly $1.2 billion (Sh155 billion), reflecting the scale of the airline’s balance sheet and fleet requirements. The Treasury has said the strategic investor is expected to provide capital and help strengthen the airline as the government seeks to reduce the burden of supporting the carrier.

Mr Kamal disclosed in March that KQ was already talking to at least four potential strategic investors and was open to bringing in more than one investor rather than relying on a single partner.

In an interview with NTV last week, he said interest had increased after an initial investor emerged in January.

‘Up to March, we had only one investor, and we thought that was a single source, but after that investors started to come one after the other,’ he said.

This followed the reconstitution of KQ’s board, which saw Mr Kittony appointed chairman and the addition of David Ndii, Chris Diaz and Winnie Nyamute as directors.

Mr Kamal told Business Daily that one of the investors had offered the airline airplanes in exchange for equity, while another was offering cash, and another debt that is convertible to equity. He said the airline was open to all of them.

His abrupt departure now leaves the board to oversee the next stage of a process that KQ says remains on course.

Read: Kamal pushed out of KQ after 8 months

Mr Kamal denied that his resignation was linked to the investor search.

He told the Business Daily that he was leaving because of a personal matter that required him to take a leave of absence and return home.

Its 8 a.m. on a Monday. You have barely settled at your desk when requests start pouring in. The CEO wants revised projections after a customer delays an order, the bank needs an updated cashflow forecast, and the board pack is due before lunch.

Not long ago, that meant hours rebuilding Excel models and rewriting reports. Today, an AI assistant can produce a solid first draft in minutes.

The bigger question is not productivity. It is this: if AI can perform much of the technical work, where does the real value of a finance professional lie?

The answer is higher up the value chain. For years, finance careers began with collecting data, reconciling accounts, updating spreadsheets and producing routine reports before progressing to interpretation, commercial judgment and strategic decision-making.

AI is rapidly compressing those lower-level tasks, freeing professionals to spend less time producing information and more time interpreting what it means for the business.

That shift makes human judgment more valuable, not less. AI can generate convincing answers that are inaccurate, based on flawed assumptions or unsupported conclusions. In finance, a wrong figure can influence lending, investment or board decisions. AI should accelerate analysis, but accountability must remain with people.

There is also a paradox to using AI effectively. It requires context. Professionals must explain the business, define assumptions and clarify objectives before the technology produces useful results.

That initial effort pays dividends as future analyses become faster and more relevant. This is particularly significant for Africa, where many finance teams operate with limited staff. Rather than reducing headcount, AI offers lean teams greater capacity.

Time saved on reporting and documentation can be redirected to scenario planning, working-capital management and providing better insights to leadership.

The profession will also need to rethink how young finance professionals are trained. Routine modelling and reporting have traditionally been part of learning the fundamentals. Those skills remain essential because professionals must understand the mechanics well enough to question AI-generated output.

The finance leaders of 2030 will not be valued for building spreadsheets faster.

They will be valued for asking better questions, challenging assumptions and turning numbers into sound business decisions. AI changes the tools, but judgment, context and accountability remain the profession’s greatest assets.

The State restricted commission payouts on earnings per trip in 2022 as part of a strategy to protect drivers from high fees, down from previous rates that often reached 25 percent.

At the same time, the court stopped the National Transport and Safety Authority (NTSA) from enforcing a requirement that digital taxi platforms retain detailed passenger and driver data and hand it over to the authority.

The court found the three-year data retention and disclosure requirement unconstitutional and disproportionate, saying it amounted to continuous surveillance of customers and drivers.

She declared key parts of the NTSA (Transport Network Companies, Owners, Drivers and Passengers) Regulations, 2022, unconstitutional, but suspended the declaration for 12 calendar months to allow the government to undertake fresh public participation.

The government was ordered to conduct a formal regulatory impact assessment and align the regulations with the Constitution and enabling legislation.

The court found that the regulations were gazetted while Parliament was in recess, without waiting for them to be tabled before Parliament for scrutiny and approval.

It said enforcement began before Parliament had scrutinised and approved the regulations, denying stakeholders the constitutional safeguard of legislative oversight.

The court made the declaration while ruling on a petition filed by Bolt Operations OU in 2025 challenging the constitutionality and legality of the regulations, including the 18 percent commission cap, mandatory data retention and disclosure requirements, the regulator’s powers and alleged discrimination against digital platforms.

The commission dispute concerned how fares collected from passengers are shared between digital platforms, drivers and vehicle owners across Kenya’s digital taxi market.

Under Regulation 9, a transport network agreement must provide for a commission payable to the platform that does not exceed 18 percent of total trip earnings. It also bars terms intended to push the commission above that ceiling.

The court barred enforcement of that ceiling against the petitioner and digital transport operators during the 12-month suspension.

The 2022 rules also covered licensing, driver and vehicle standards and passenger safeguards.

The commission ceiling followed complaints from drivers about charges imposed by ride-hailing companies. The drivers protested commission rates of 25 to 30 percent and demanded an 18 percent ceiling.

Read: Uber, Bolt drivers to get powers for setting fares

The High Court found the commission restrictions unconstitutional because the Government had not demonstrated their necessity or proportionality through the required regulatory process.

‘The absence of a regulatory impact statement assessing the economic consequences of such price control, through a regulation which the Court has already found lacked the necessary constitutional safeguards, compounds the arbitrariness of the measure,’ the court said.

It found that the price-setting provisions lacked statutory foundation and economic justification, and that they ‘constitute an unconstitutional deprivation of property and contractual autonomy’.

‘There was no empirical evidence of necessity or proportionality and, therefore, the restrictions cannot be justified or considered reasonable limitations under Article 24 of the Constitution.’

In regard to privacy, the dispute concerned Regulation 17, which required ride-hailing platforms to retain detailed trip and payment information for three years and surrender it to NTSA on demand.

The records include driver and passenger identifiers, pickup and drop-off locations and times, payment methods and pricing details.

The court characterised the requirement as creating a form of continuous surveillance and found the provision unconstitutional and disproportionate.

The court said the requirement created ‘a regime of continuous surveillance.’ Regulation 17 imposed obligations on digital taxi platforms by compelling them to act as custodians of surveillance data.

‘Regulation 17 infringes the right to privacy under Article 31 of the Constitution and contravenes the principles of the Data Protection Act 2019,’ she said.

Article 31 of the Constitution guarantees every person the right to privacy, including the right not to have information relating to their family or private affairs unnecessarily required or revealed.

The Data Protection Act, 2019, gives effect to this constitutional guarantee by embedding principles of data minimisation, proportionality and consent, including informed consent.

The court said that allowing compulsory disclosure of private information on demand, in the absence of adequate safeguards and a regulatory impact statement, compounded the arbitrariness of the measure. The court declined to strike down the regulations immediately, saying doing so would remove safety standards, driver verification checks and other operational rules in the digital ride-hailing sector.

‘An immediate nullification and ceasing to operate would destabilise the transport sector,’ Justice Aburili said. ‘The appropriate remedy would be to suspend the declaration of invalidity,’ she added.

The judge said the contested provisions would cease to be enforceable after the 12 months if compliance was not achieved.

The court also considered whether the regulations encroached on transport functions assigned to county governments under the Constitution.

It found that counties retain responsibility for local transport services, including taxis and parking, while the national government oversees transport safety standards and policies that cross county boundaries.

Justice Aburili held that NTSA could license digital platforms operating across counties without taking away counties’ powers over individual vehicles, drivers, parking and local transport operations.

More than 15 computer monitors sit empty at Lillian’s cyber café on Nairobi’s Tom Mboya Street, a reminder of how technology changed a business that was once at the heart of Kenya’s digital revolution.

On a recent afternoon, only one customer is browsing at the partitioned café. Lillian, who has run the business for 20 years, is seated at an empty cubicle watching TikTok videos, while her sole assistant watches YouTube videos at the reception desk.

It is a far cry from the years when customers streamed into cyber cafes to print documents, send emails, apply for jobs, and catch up with their friends on Facebook and the now-defunct Google+.

Internet shops in Kenya boomed in the late 2000s and early 2010s in the cities and larger towns. But now, widespread use of smartphones and cheaper, faster mobile data has largely replaced the need for traditional internet browsing at these cafés.

Lillian says business has declined by about 90 percent due to the reduced need for physical computer access.

The decline has forced her to cut her staff from four to one, as power and other operating costs rise. Browsing charges, meanwhile, have remained at Sh1 per minute for years.

‘This business needs to bring in around Sh5,000 to be able to sustain itself – rent, power, internet bill, staff costs,’ she says, pointing across the empty chairs and the black network rack mounted on the wall.

‘Now, getting Sh1,000 will be a challenge at the end of the day.’

Even a day-long browsing offer of Sh300 has done little to bring customers back, she says.

The decline has also hit printing, once a major source of income for cyber cafes. With smartphones and laptops allowing users to create, store and share documents digitally, customers are increasingly questioning whether they need physical copies.

‘Printing costs are relatively high, so people are really weighing options before they have to print anything,’ she says. ‘If they can use it in softcopy format, why bother printing it at a higher cost?’

The rising cost of living has compounded the problem, making both customers and the business more cautious about spending.

‘I have to pay staff more, yet the business is not doing as well, so I am forced to lay them off and remain with just one, who I am still struggling to pay,’ says the businesswoman.

‘Furnishing this café was about Sh250,000 then. Now all these desks are here collecting dust.’

Kenya’s smartphone connections rose to 50.2 million in the three months to March, up from 48.7 million in December, marking the first time the country has crossed the 50 million smartphone threshold.

The handsets have become the primary gateway to the internet for the majority of Kenyans, with Communications Authority of Kenya (CA) data showing that 98.2 percent of Kenyan internet users between January and March 2026 accessed the net through a smartphone.

In contrast, the use of other devices such as desktop computers, laptops, and feature phones continues to decline.

On the walls of Lillian’s internet café, there are notices advertising ‘Zoom calls’ and ‘Teams meetings’. A larger enclosed cubicle at the corner has been turned into a private working space for customers who need somewhere quiet.

It is, she says, her attempt to adapt to the evolving technology. ‘That is for people who might have important calls when in town, and they want to take a work call or job interview at a quiet place within a public café.’

But even these additions have not been enough to reverse the decline. Her plans now point to an exit from the traditional cyber café model.

She plans to close the business within a year, sell the remaining monitors to second-hand goods buyers and retain only a few computers in a smaller shop offering essential services such as document printing, KRA returns, job and visa applications.

‘Farming has also come in handy; that is where my focus is now,’ she says.

For other cyber café operators, survival has meant changing the business almost entirely. In uptown Nairobi, along Muindi Mbingu Street, Fred Omondi’s shop is a glimpse into what the internet café business has evolved into.

The business still has computers, but browsing is no longer at the centre of its operations. Instead, Fred now describes it as a computer services provider, offering typesetting, basic graphic design, corporate branding materials, banner and window-sticker printing, adhesive decorations, photocopying and document printing.

Customers can also get help with tax filing, CV and cover letter formatting, job and visa applications and government services such as applying for driving licences and certificates of good conduct.

Every few minutes, a customer walks in for photocopying, another brings photos on his smartphone for colour grading and printing, while a motorcycle rider seeks adhesive decorations for his bike.

Mr Omondi employs two other people and has reduced the traditional cyber café footprint to just three computers. The rest of the shop is occupied by specialised equipment, including a photo printer, heavy-duty document printer and banner vinyl printing machine.

‘We still get customers seeking the cyber café style of browsing once in a while, but most of them are now in need of services that they cannot do at their homes from their smartphones or laptops,’ he says.

Mr Omondi says customers are also increasingly seeking technical assistance with tasks such as managing email and calendars, applying for government tenders, submitting documents and applying for jobs online.

The decline of traditional computer package training, which also boomed in the 2010s, has also left shops like his filling part of the computer literacy gap.

The introduction of the Competency-Based Curriculum (CBC) in 2017 has provided another source of business.

‘With parents now more involved in their children’s schoolwork, demand for printed research material and assignments has increased. That was previously mostly a reserve of the schools,’ he says.

The shop has also found a niche among small businesses in the city centre, which outsource bulk printing rather than invest in their own equipment.

The pivot has required a significant investment; Mr Omondi estimates that his equipment alone is worth almost Sh3 million, making the operation far more capital-intensive than a conventional cyber café.

However, the investment is paying off, he says. Online services and applications start at Sh500, while typing and editing cost from Sh350. Binding ranges between Sh50 and Sh150, while printing costs between Sh650 and Sh1,500 depending on the paper and size.

Logo design costs Sh7,000, while letterhead designs, business cards, and company profile design and printing cost about Sh15,000.

He says some businesses have spent as much as Sh50,000 on bulk branding materials at his shop.

The cyber café may be disappearing as a place to access the internet, says Mr Omondi, but for those willing to invest in equipment and turn their shops into service centres, the digital transformation has created new opportunities.

‘They can be reinvented as places where customers come to get things done,’ he says, ‘since there will always be tasks they cannot handle at home because of equipment needs and varying computer literacy levels.’

Nairobi’s commercial streets went quiet on August 28, 2026. Along Moi Avenue, Kenyatta Avenue and Tom Mboya Street, traders pulled down their shutters and marched to Times Tower, protesting a Customs change they say could bury small importers.

The dispute is over a single number: Sh3.2 million, the new minimum benchmark for a 40-foot container carrying consolidated goods, up from Sh2.5 million.

KRA says the Sh3.2 million benchmark is provided for under the East African Community Customs Management Act’s customs valuation framework and is not a new tax or a law passed by Parliament.

That figure had remained unchanged since the 2022/23 financial year. Since then, the shilling has weakened, freight costs have shifted and import volumes have grown. KRA argues those changes justified revisiting a three-year-old benchmark rather than leaving it untouched indefinitely.

The revised figure was due to take effect on July 1, but after pushback from traders and freight agents, implementation was delayed to August 20 to allow negotiations. It came into force regardless.

Consolidation exists to help small traders.

Several importers share one container and split shipping costs instead of paying for half-empty containers. KRA’s complaint is that the same arrangement has also become a loophole. By pooling goods into one container and clearing it under a single reference value, some importers, particularly of high-value electronics and smartphones, have underdeclared cargo, misclassified goods or concealed items to reduce duty.

Crucially, KRA insists Sh3.2 million is not a flat tax slapped on every container. It describes the minimum yield as a risk-management filter, not the actual tax liability. Containers below the benchmark qualify for simplified clearance, while traders who dispute the valuation can request individual assessment based on the actual value of their goods.

The authority also says traders are not locked into the consolidated system. They may opt out of the simplified arrangement and have containers verified on actual value, or de-consolidate cargo into individual consignments so each importer pays duty on their own goods.

None of this makes traders’ anxiety irrational. A 28 percent jump, or an extra Sh700,000 per container, hits hardest for thin-margin retailers whose business models were built around the previous threshold. De-consolidation also brings more paperwork, inspections and clearance costs.

The Small Traders Association has vowed weekly protests until KRA returns to the negotiating table. But the legal architecture is not entirely KRA’s to bargain away.

The authority may adjust the threshold, extend the grace period or refine implementation, but it maintains that containers benefiting from undervaluation cannot remain outside the customs net indefinitely.