Category: Business Daily

The High Court has rejected a request by a Chinese contractor to compel the Kenya Electricity Transmission Company (Ketraco) to set aside Sh570 million pending arbitration in a dispute where the service firm is pursuing Sh1.5 billion compensation over delays in the Kenya-Tanzania power interconnection project.

The High Court, however, ordered Ketraco to appoint an arbitrator within seven days to resolve the dispute with North China Power Engineering Company Ltd (NCPE), warning that the contractor would be free to appoint one unilaterally if the State corporation fails to comply.

The ruling clears the way for arbitration in a payment row arising from one of East Africa’s flagship regional power projects, which links electricity grids of Kenya and Tanzania and enables cross-border electricity trade.

NCPE is seeking compensation from Ketraco for ‘idle time’ following delayed implementation of the project.

‘Idle time’ is an amount paid as compensation for the time a contractor’s employees or machines remain unproductive due to factors that can either be controlled or uncontrolled by the contracting party.

The Chinese firm wants to be paid for losses it says arose after the project was delayed for several years despite an initial completion target of December 2018.

The company claims the delays left equipment and workers idle, increased insurance and administrative costs, and triggered other expenses that it says Ketraco should reimburse.

Court records show the contractor sought an order requiring Ketraco to deposit $4.4 million (Sh570 million), into a joint interest-earning account operated by lawyers representing both sides pending determination of the dispute.

The company argued that Ketraco had already acknowledged that amount as an undisputed portion of its claim.

But the court declined the request, finding that a similar application had already been considered and rejected when the dispute was first referred to arbitration last year.

‘The applicant has not demonstrated any material change of circumstances since that ruling,’ the court said.

‘The assertion that the respondent (Ketraco) acknowledged an amount of $4.4 million does not, without more, establish a basis for requiring the respondent to deposit that sum into a joint account.’

The court further held that such an order would effectively secure the contractor’s monetary claim before an arbitral tribunal had determined liability.

‘Such an order would, in substance, amount to securing the applicant’s monetary claim before liability has been determined by the arbitral tribunal,’ the court ruled.

The dispute stems from a contract awarded to NCPE for construction works under the Kenya-Tanzania Power Interconnection Project.

The project involved construction of about 510 kilometres of high-voltage transmission lines linking the two countries.

The contractor says the contract was expected to be completed in December 2018 but suffered repeated delays that pushed completion to 2023 through a series of extensions.

NCPE argues that the delays were largely caused by difficulties in acquiring wayleaves needed for construction of transmission infrastructure.

Its lawyers told the court that the company had documented losses arising from idle equipment, idle workforce, office maintenance costs, management overheads, insurance premiums, bank guarantees and related expenses incurred during the prolonged delay period.

The contractor also accused Ketraco of frustrating the commencement of arbitration despite a court order issued in July 2025.

The court noted that NCPE had written several letters seeking appointment of an arbitrator after the matter was referred to arbitration.

Ketraco did not dispute receiving the correspondence but said it was undertaking a verification exercise intended to narrow issues before arbitration.

The court found that nearly nine months had elapsed since the court directed the parties to appoint an arbitrator.

“The respondent has failed to cooperate in the appointment process within a reasonable time,” the judge said.

The court ordered Ketraco to select an arbitrator from names proposed by the contractor within seven days. If it fails to do so, NCPE will be at liberty to appoint an arbitrator whose appointment will be deemed valid for the commencement of the proceedings.

The Global Fund has cut funding for Kenya’s HIV programme by 18.2 percent to Sh26.4 billion ($205million) over the next three years under its Grant Cycle 8(G8), which runs from 2026 to 2028. This will be a major cut from about Sh32.3 billion ($250 million) in the previous funding cycle.

Disclosures by the Clinton Health Access Initiative (CHAI), a global health organisation specialising in intelligence and data analysis, place Kenya among 13 sub-Saharan African countries facing significant HIV funding chops as global donor resources tighten, even as countries transition to domestic funding.

‘Overall allocations across HIV, TB, and malaria are 17.9 percent lower than those of the previous three-year cycle. For HIV specifically, allocations across 13 sub-Saharan African countries included in CHAI’s analysis declined by an average of 18 percent, with reductions ranging from 9-34 percent at the country level,’ the organisation said in its HIV market impact memo. These reductions follow a shortfall in the Global Fund’s latest replenishment.

The Fund had sought at least $18 billion (Sh2.3 trillion) for its Eighth Replenishment to support HIV, tuberculosis, and malaria programmes between 2027 and 2029. However, it secured about $9 billion (Sh1.2 trillion) in pledges, forcing it to make lower allocations to several high-burden countries.

Kenya’s reduction comes at a time when the country is also dealing with the near-total withdrawal of support from the US President’s Emergency Plan for AIDS Relief (Pepfar), which analysts describe as one of the most significant HIV financing disruptions in more than two decades.

Meanwhile, around 1.4 million people are living with HIV, and another 1.4 million are currently receiving antiretroviral treatment.

The number of new infections increased from 16,752 in 2024 to 19,991 in 2025, reversing progress in reducing infections by over 67 percent since 2010. On average, 54 people become newly infected every day, and 57 people die daily from Aids-related illnesses.

Mother-to-child transmission remains at seven percent, which is above the global target of five percent.

Kenya had already experienced cuts in the previous grant cycle. Its Grant Cycle 7 allocation for HIV, tuberculosis, and malaria was initially approved at $408 million (Sh52.6 billion), before being reduced to $354 million (Sh45.6 billion) due to global resource constraints.

The country has secured Sh12.3 billion from the Global Fund for the financial year starting in July, with HIV programmes accounting for Sh8.83 billion, more than 70 percent of the total. However, budget projections indicate that HIV funding will decline to Sh9.75 billion in 2027/28, before falling sharply to Sh4.47 billion in 2028/29.

This signifies a transition away from donor dependence. Under the Global Fund’s sustainability framework, countries are expected to finance an increasing proportion of their health programmes domestically.

“The Global Fund is also phasing out grants to 35 countries in GC8, with another 12 to follow in GC9. For many countries already absorbing reduced USG support, this is one of several major financing transitions occurring simultaneously,” the memo read.

On its part, Kenya has committed $593 million (Sh76.5 billion) from its own budget during the current cycle, with future allocations increasingly dependent on domestic co-financing. In its latest budget allocation, the Treasury allocated Sh18.5 billion for the Global Fund.

Since 2003, Kenya has received approximately $2 billion (Sh258 billion) from the Global Fund for tackling HIV, tuberculosis and malaria.

Auditor-General Nancy Gathungu has questioned the legality of the appointment of the chairman of the Agricultural Finance Corporation (AFC), John Mruttu, saying he was chosen by the wrong authority and is, therefore, holding office irregularly.

In her audit report for AFC for the financial year ended June 2025 Ms Gathungu said Mruttu, a former governor of Taita Taveta County, was appointed chairperson of the State corporation by Cabinet Secretary for Agriculture and Livestock Development instead of the President as required under the State Corporations Act.

According to the report, Mr Mruttu was appointed to a three-year term effective November 18, 2022, through Gazette Notice No. 14235 issued by the Agriculture CS.

Ms Gathungu said the appointment was made “in contravention of Section 6(1)(a) of the State Corporations Act”, which provides that unless the law establishing a State corporation states otherwise, the board shall consist of a non-executive chairperson appointed by the President.

She further cited the Mwongozo Code of Governance for State Corporations (2015), which states that chairpersons of all State corporations shall be appointed by the President.

The findings have revived debate over how chairpersons of State corporations should be appointed in Kenya.

The State Corporations Act and the Mwongozo Code generally vest the power to appoint chairpersons in the President. However, some State corporations are established under sector-specific laws that contain separate provisions governing board appointments.

AFC has rejected the Auditor-General’s findings, arguing that Mruttu’s appointment was lawful and undertaken in accordance with the Agricultural Finance Corporation Act, the legislation that established the lender.

“The Corporation respectfully notes that the observation arises from an interpretation of the applicable statutory framework governing AFC and not from any act of non-compliance by the Corporation or its management,” AFC said in its response.

The corporation argues that Section 4(3) of the AFC Act expressly provides that the chairperson shall be appointed by the Cabinet Secretary responsible for Agriculture in consultation with the Cabinet Secretary responsible for the National Treasury.

AFC further notes that Section 6(1) of the State Corporations Act recognises that where a State corporation is established under a written law containing specific provisions on board composition and appointments, those provisions take precedence.

“It is important to emphasize that the issue raised by the Auditor-General does not concern misconduct, impropriety or procedural irregularity on the part of the Corporation. Rather, it relates to differing interpretations of statutory provisions governing appointments within State corporations,” AFC said.

The corporation added that the matter has since been clarified through engagement with oversight institutions and legal interpretation of the applicable laws. It also noted that AFC now falls under the Government-Owned Enterprises (GOE) Act, which has streamlined the appointment of chairpersons and board members across State corporations.

Mr Mruttu is a veteran politician who served as the first Governor of Taita Taveta County between 2013 and 2017. He lost his re-election bid in 2017 to Granton Samboja. Before entering elective politics, he held senior positions in the public and private sectors and has remained active in regional development and agricultural initiatives.

Established in 1963, AFC is a State-owned development finance institution mandated to provide credit to farmers, agribusinesses and agricultural value chain players.

The lender plays a critical role in financing food production, mechanisation, irrigation and livestock development, making it one of the government’s key vehicles for supporting Kenya’s agricultural sector.

Kenya imported a record amount of electricity in the first three months of 2026 as rising demand from households and businesses outpaced growth in domestic power generation, exposing rising pressure on the energy supply system, and highlighting challenges posed by intermittent renewable power sources.

Data from the Kenya National Bureau of Statistics (KNBS) shows electricity imports rose to 494.08 million kilowatt-hours (kWh) in the January-March period, the highest level ever recorded for a first quarter and a 26.4 percent increase from 390.9 million kWh, or units, in the corresponding period last year.

The surge came despite local electricity generation reaching an all-time high of 3.45 billion kWh during the quarter, up 7.4 percent from 3.21 billion kWh a year earlier.

Electricity consumption, however, grew faster, rising by nine percent to 3.04 billion kWh from 2.79 billion kWh, or units, over the same period, highlighting a widening gap between demand growth and additions to local supply.

The figures point to an economy whose demand for electricity is expanding faster than domestic generation capacity, forcing Kenya to increasingly rely on power imports from neighbouring countries, largely Ethiopia, to meet rising demand.

A breakdown of generation data shows geothermal energy was the main driver of growth in domestic electricity supply during the quarter. Output from geothermal plants rose by 21.1 percent to 1.66 billion kWh from 1.37 billion kWh a year earlier, accounting for virtually all the increase in total generation.

Geothermal’s share of Kenya’s electricity mix climbed to 48.3 percent from 42.8 percent a year earlier, further cementing its position as the country’s most important source of power.

Hydropower generation also increased by seven percent to 852.63 million kWh from 797.01 million kWh.

However, output from other renewable sources weakened, the provisional data shows. Wind power generation fell 14.1 percent to 448.52 million units, while solar generation dropped 7.5 percent to 123.1 million kWh. Costly diesel-powered thermal generation also declined 6.4 percent to 358.1 million kWh.

The drop in wind generation is particularly critical given its role in supporting the national grid during periods of high demand.

Kenya Power Managing Director Joseph Siror has previously acknowledged that the utility is sometimes forced to ration electricity when output from wind and solar plants decline, creating supply deficits that cannot be fully compensated for by geothermal, hydroelectric plants and imported electricity.

Dr Siror said the challenge is most acute when wind generation collapses during peak evening demand periods, forcing the utility to implement load shedding to protect the stability of the national grid.

‘I can confirm that there are many instances when we have been forced to load-shed the country when the wind generation is low, and this is because when you sum up all the other generation sources without wind, they cannot serve the peak demand,’ he said earlier this year.

The Kenya Power chief noted that while installed wind capacity is expected to contribute about 435 megawatts, the technology’s intermittent nature means output can occasionally slump close to zero.

The latest generation figures appear to reinforce those concerns, with wind power production declining by more than 73 million kWh compared to the first quarter of 2025, increasing pressure on other sources and imported electricity to fill the gap.

Despite record geothermal production, overall supply growth in the review period remained insufficient to keep pace with demand.

The latest figures show Kenya consumed 623.4 million more units of electricity in the first quarter of 2026 than it did during the same period in 2022, representing growth of nearly 26 percent.

By contrast, domestic generation increased by about 433.4 million kWh over the four years going back to 2023, equivalent to growth of about 14 percent, leaving imports to bridge much of the supply-demand gap.

Electricity imports have consequently increased more than fivefold over the past four years, climbing from 97.03 million kWh in the first quarter of 2022 to nearly half a billion units in the opening three months of 2026.

The growing dependence on imported electricity is emerging as a key challenge for policymakers seeking to sustain economic growth, while maintaining energy security.

Recognising the mounting pressure on the power sector, the Treasury said in the 2026 Budget Policy Statement (BPS) that the government plans to add 10,000 megawatts (MW) of generation capacity over the next seven years through geothermal, wind, solar, hydroelectric and nuclear energy projects.

The Treasury said the expansion is intended to support domestic electrification, industrial manufacturing, agro-processing, e-mobility, green industrialisation and the digital economy while meeting the increasing energy requirements of data centres, artificial intelligence and advanced manufacturing.

“Reliable and affordable energy supply remains central to powering manufacturing, promoting agricultural value addition, and enabling digital transformation across all sectors of the economy,” the Treasury said.

The government argues that Kenya’s vast geothermal, hydro, solar and wind resources provide a strong foundation for expanding affordable electricity supply and reducing dependence on imports.

President William Ruto has also signaled plans for a major expansion of the country’s electricity infrastructure.

Speaking during a Private Sector Roundtable in August 2025, Dr Ruto said the government was reorganising the energy sector with the aim of substantially expanding generation and transmission capacity before the end of the decade.

“By God’s grace, before 2030, we should have doubled the grid that we have. And we should try and do it with renewable energy,” the President said, adding that the government was also exploring nuclear energy and other alternative power sources.

The latest import figures are likely to strengthen the case for accelerated investment in new generation projects, grid expansion and energy storage solutions as Kenya seeks to keep pace with rapidly rising electricity demand.

While regional power trade has helped stabilise supplies and reduce the risk of widespread shortages, the record import volumes in the opening quarter of the year reveal a growing reality for Kenya’s power sector: demand is rising faster than domestic generation, and fluctuations in wind and solar output are making the challenge even more acute.

The result is that Kenya is increasingly turning to imported electricity to bridge supply gaps at a time when the government is betting on a massive expansion of generation capacity to support industrialisation, digital transformation and long-term economic growth.

Lebanese contractor Zakhem International Construction Limited has moved to court seeking more than Sh10.9 billion from Kenya Pipeline Company (KPC), citing delays in the construction of the Mombasa-Nairobi petroleum pipeline.

The project, announced in 2013 and launched in 2015, was initially scheduled for completion within 18 months but took 21 months.

Zakhem argues that although the contract period was extended several times because of implementation delays, the project rates and quality requirements remained unchanged.

The contractor attributes the delays to KPC’s alleged failure to comply with National Construction Authority (NCA) requirements, delayed approvals and procurement of major plant and equipment, late issuance of construction drawings and details, and external obstructions.

‘From the outset and throughout the project, we diligently performed our contractual obligations. However, the progress and completion of the works were materially affected by numerous acts, omissions, defaults and breaches attributable to the defendant,’ the firm’s chairman Ibrahim Zakhem says in a petition filed at the High Court.

KPC floated the Sh48 billion tender for the replacement of Line 1, the Mombasa-Nairobi petroleum products pipeline.

Zakhem says KPC was contractually obligated to pay the agreed contract price and any extra sums due for completed works and defect rectification.

According to court documents, the contractor took possession of the site on January 6, 2015, and began construction as scheduled. However, it claims progress was hampered by KPC’s actions and omissions.

The company accuses KPC of introducing major design changes during implementation, failing to provide uninterrupted access to sections of the pipeline corridor, issuing numerous variation orders and additional work orders, and causing work suspensions.

Zakhem further alleges that KPC failed to address physical obstructions, third-party interference, community disruptions and encroachments along the pipeline route within a reasonable time despite its contractual obligations.

The contractor says it commissioned an independent consultant whose March 2018 report concluded that the project had been delayed beyond the original completion period.

According to Zakhem, the delays resulted in substantial additional costs and necessitated extensions of the completion period. The company maintains that it is entitled to extensions of time, reimbursement of prolongation and disruption costs, and adjustments to the contract price.

Court records show that Zakhem submitted five Extension of Time (EOT) claims between 2016 and 2018, seeking $41.4 million under EOT 1, $65.1 million under EOT 2, $44.8 million under EOT 3, $34.6 million under EOT 4 and $15.2 million under EOT 5.

The contractor argues that the contract entitles it to extensions where project completion is delayed by the employer’s actions or omissions and allows corresponding adjustments to the contract price.

Separately, Zakhem, earlier this year, sued KPC seeking $6 million arising from the same contract.

That claim stems from a partial High Court decree issued on June 16, 2020, ordering KPC to pay the contractor $44 million (then about Sh5.72 billion).

Zakhem says about Sh4 billion of the decretal sum was remitted to the Kenya Revenue Authority (KRA) to settle tax obligations. KPC subsequently paid Sh3.099 billion on October 22, 2020, and Sh915 million on January 8, 2021.

The contractor argues that discrepancies arose because the decree was denominated in US dollars while payments to KRA were made in shillings, without properly accounting for exchange rate fluctuations.

Using an exchange rate of Sh108 to the dollar, Zakhem calculates that KPC paid a total of $36.86 million, leaving an outstanding balance of $7.1 million as at January 31, 2021.

The company says a further Sh485 million recovered through a court order in June last year-equivalent to $3.75 million at an exchange rate of Sh129-reduced the balance to $3.4 million.

‘From the $7,157,824 being the balance from the partial decree, the company is yet to remit the sum of $3,406,434,’ the demand letter states.

Zakhem says the unpaid amount accrued interest of $2.62 million at 14 per cent per year between June 16, 2020, and December 31, 2022, bringing the total claim to $6.03 million (about Sh781 million).

In June last year, the contractor obtained a court order allowing it to recover Sh485 million from KPC bank accounts.

KPC has disputed the claim, arguing that all outstanding payments were settled under a consent agreement reached on September 25, 2023.

The state corporation said the suit is an attempt to reopen a matter that was conclusively resolved and maintains that exchange rates and final payable amounts were fully discussed and agreed during negotiations.

However, the High Court rejected KPC’s argument and ruled that the amount remained outstanding.

Earlier, Zakhem had sought $126 million (about Sh16.38 billion) in a broader claim, but the High Court awarded $44 million in a partial judgment.

KPC appealed the decision and, while the appeal was pending, the parties entered negotiations that led to the 2023 settlement.

The corporation has also argued that there is no enforceable decree arising from a case that has since been withdrawn.

Kenya does not suffer from a shortage of industrial policies. Over the past two decades, successive governments have launched ambitious programmes to transform the country into a manufacturing and export-oriented economy.

Vision 2030, the Bottom-Up Economic Transformation Agenda, Special Economic Zones, County Aggregation and Industrial Parks, and export promotion initiatives all reflect a clear commitment to industrialisation.

Yet manufacturing’s contribution to GDP has remained largely stagnant. This raises an important question: Is Kenya’s industrialisation challenge really about policy, or is it increasingly about governance?

Much of the debate focuses on what government should do. Far less attention is paid to whether institutions possess the coordination, infrastructure and administrative capacity needed to translate policy ambitions into economic outcomes.

Industrialisation is not simply about building factories. It requires reliable infrastructure, efficient logistics, affordable energy, supportive regulation, access to markets and effective coordination between national and county governments. In practice, industrial transformation is as much a governance challenge as an economic one.

The rollout of County Aggregation and Industrial Parks illustrates this reality. While the initiative could stimulate local value addition and job creation, its success will depend on collaboration among counties, national agencies, investors, utilities and transport authorities.

Industrial parks without reliable infrastructure, market linkages or management systems risk becoming underutilised investments.

The same applies to Kenya’s opportunities under the African Continental Free Trade Area. Trade agreements alone do not generate exports. Firms must be competitive, export-ready and able to meet international standards, supported by regulators, financiers and export promotion agencies.

As Kenya seeks to accelerate industrial transformation, the conversation should shift from designing new policies to improving implementation. The country’s greatest challenge may no longer be strategy formulation, but building the state capacity, institutional coordination and governance systems needed to make existing policies work.

Telkom Kenya shed over 160,000 mobile subscribers in the three months ended March 2026, extending a prolonged decline that has seen the operator tumble from the country’s third-largest mobile network to fifth place within less than two years.

Fresh data from the Communications Authority of Kenya (CA) shows Telkom’s active mobile subscriber base fell to 584,438 as of March from 744,902 recorded last December.

The decline represents a loss of 160,464 subscribers during the quarter, equivalent to more than one in every five customers on its network.

The latest contraction comes at a time when Kenya’s overall mobile market recorded its strongest quarterly growth on record, highlighting Telkom’s struggle to retain users even as rivals aggressively expanded their customer bases.

During the review period, active mobile subscriptions across the industry rose by a record 5.7 million to 84.1 million, driven largely by customer acquisition and win-back campaigns run by operators.

While competitors gained subscribers, Telkom continued losing ground, further widening the gap between itself and larger rivals Safaricom and Airtel Kenya.

The latest figures also cement Telkom’s position as Kenya’s fifth-largest mobile operator after being overtaken by both Equitel and Jamii Telecommunications Limited (JTL) in recent months.

Equitel first displaced Telkom from third position in the quarter ended September 2024, marking the first time the operator had fallen out of the top three since liberalisation of Kenya’s telecommunications market.

The decline deepened further in the quarter ended December 2025 when JTL, which operates the Faiba mobile network, overtook Telkom to push it into fifth place.

As of March this year, Equitel’s subscriber base stood at 1.5 million while JTL had 883,944 active mobile subscriptions, both substantially ahead of Telkom.

The latest losses extend a trend that has persisted for several years as the operator struggles to compete against larger rivals with deeper financial resources and broader network coverage.

Telkom’s mobile subscriber base has been shrinking steadily despite repeated restructuring efforts, ownership changes and investments aimed at reviving the business.

Industry analysts have previously linked Telkom’s subscriber losses to network coverage challenges, lower brand visibility and changing consumer preferences as customers gravitate toward operators offering wider service ecosystems.

The growing importance of mobile money and digital financial services has further strengthened the competitive position of larger operators.

Unlike Safaricom’s M-Pesa platform and Airtel Money, Telkom has struggled to establish a similarly strong digital ecosystem capable of driving customer retention.

The operator’s difficulties have also coincided with major shifts in Kenya’s telecommunications landscape, where competition has increasingly moved beyond traditional voice services toward data and digital platforms.

As smartphone adoption rises, consumers are placing greater emphasis on network quality, internet speeds, and value-added digital services when choosing mobile providers. This has intensified pressure on smaller operators whose ability to sustain infrastructure investments often lags behind larger competitors.

Imports from India crossed the Sh100 billion mark for the first time in the opening quarter of a year, underlining the growing influence of the South Asian nation as a source of goods for Kenya.

Data from the Kenya National Bureau of Statistics (KNBS) shows that imports from India rose by 52.6 percent to Sh102.5 billion in the three months to March, from Sh67.2 billion in the same period last year.

The jump made India Kenya’s second-largest source market for goods after China and the fastest-growing among Nairobi’s major trading partners, adding Sh35.4 billion worth of exports to the local market compared to the first quarter of 2025.

The latest provisional numbers, based on customs records as captured by the Kenya Revenue Authority, show India accounted for 13.8 percent of Kenya’s total imports of Sh740.8 billion in the first quarter, expanding from 10.4 percent a year earlier.

Kenya’s key purchases from India include pharmaceutical products, rice and refined petroleum fuels.

India is a major source of semi-milled and wholly milled rice consumed locally, medicines used in hospitals and pharmacies, and premium motor spirit sold at filling stations as the country serves as a strategic loading zone whenever there are disruptions in the Middle East.

The composition of imports points to India’s growing importance in sectors tied to food security, healthcare and energy, making it one of Kenya’s strategic trading partners.

The data shows India leapfrogged the United Arab Emirates, with only China supplying more goods to Kenya during the quarter.

Imports from China rose by 29.2 percent to Sh192 billion, reinforcing the Asian giant’s grip on the Kenyan market and extending its lead over all other trading partners.

China accounted for 25.9 percent of Kenya’s total imports of Sh740.8 billion during the quarter, meaning that roughly one shilling out of every four spent on the purchase of goods from abroad went to Chinese suppliers.

China’s dominance is underpinned by its position as a key provider of industrial machinery, construction materials and telecommunications equipment such as smartphones that support Kenya’s infrastructure, manufacturing, construction and digital economy.

Some of Kenya’s leading imports from China include crushing and grinding machinery used in mining, quarrying and construction activities, hot-rolled steel products used across the building sector, and telecommunications equipment used in the transmission and routing of voice and data services.

The KNBS numbers reveal an increasingly concentrated import structure in which China and India occupy a commanding position.

Combined imports from the two countries stood at Sh294.5 billion in the first quarter, equivalent to 39.8 percent of Kenya’s total import bill.

In practical terms, nearly Sh4 out of every Sh10 Kenya spent on imported goods during the quarter flowed to suppliers in either China or India.

The growing influence of the two countries has cemented Kenya’s trade tilt towards Asia, which has become the principal source of manufactured goods, industrial inputs, pharmaceuticals, fuel products and consumer merchandise.

China’s dominance has strengthened steadily in recent years. Beijing’s share of Kenya’s import market has risen from 18.6 percent in the first quarter of 2024 to 22.9 percent in the same period last year before climbing to 25.9 percent this year.

India has also expanded its footprint, with its share of imports increasing from 10.6 percent in the first quarter of 2024 to 13.8 percent this year, reflecting stronger demand for Indian products and deeper trade ties between Nairobi and New Delhi.

India’s rise mirrors its growing status as a global manufacturing and refining hub that supplies competitively priced products ranging from medicines and agricultural commodities to petroleum products and industrial raw materials.

Apart from China and India, Saudi Arabia emerged as another major beneficiary of Kenya’s import demand. Imports from the kingdom surged by 158.5 percent to Sh49.4 billion, lifting its share of Kenya’s import market to 6.7 percent from 3.0 percent a year earlier.

In contrast, imports from the United Arab Emirates fell by 20.9 percent to Sh72.9 billion. The reduced share of UAE is in part tied to disruptions at Abu Dhabi National Oil Company (ADNOC), a major player in Kenya’s government-to-government (G2G) fuel supply arrangement, whose refinery was among the first oil facilities in the Gulf to be hit by Iranian drones.

The KNBS data shows purchases from the United States also dropped by 34 percent to Sh23.1 billion, reducing America’s share of Kenya’s import bill to 3.1 percent. Imports from Japan grew modestly by 3.7 percent to Sh32.1 billion.

Recently, Kenyans have witnessed the infiltration and violent disruption of most civic and political gatherings by hired thugs, leaving a trail of injury and wanton destruction of property.

Trends in political rallies and meetings reveal a rise in ‘goon’ culture. Hired persons are unleashed on gatherings to terrorise, disrupt meetings and cause mayhem. The aim is to intimidate citizens and consolidate and align political camps.

At the end of the stick, businessmen and property owners are left counting losses, most of which are not recoverable unless well-worded insurance covers are in place.

Courts have in the past interpreted insurance policies and clauses touching on insurable political risks. In many instances, property owners and policyholders have been left without compensation where the claims are not specifically covered.

Following the 2007 post-election protests, Ukwala Supermarket in Kisumu was attacked by mobs and looted. In a suit against Kenindia Insurance Company, the court was faced with the question whether the losses to Ukwala were covered and recoverable.

The insurer argued that the losses arose from civil commotion and terrorism which were exempted as per the policy taken by the supermarket.

While dismissing the insurer’s defence that the loss and damage suffered was attributable to civil war or civil commotion assuming the proportion of a popular uprising, the Court found that the loss was occasioned by sporadic activities of looters who were acting for personal gain and not for any organised cause or terrorism.

In another 2007 post-election related case, Phoenix of (E.A) Assurance Co. Ltd v Leonard Gichora Kiiru [2019], the court interpreted a clause on general exceptions on war, civil war, political war and terrorism in favour of the insured after his vehicle was damaged by fire during the riots. It was held that the post-election violence was in furtherance of political turmoil which was covered under the policy.

Courts have relied on definitions of terrorism and political risks that parties adopt in the insurance policies as separate from other definitions in legislation dealing with crime and political offences. Strict interpretations found in the Prevention of Terrorism Act are not always adopted in insurance claims following riots.

In Kenolkobil Limited and another v Chartis Kenya Insurance Company Limited [2015], the court held that the definition of riots and strike under the insurance policy did not match the violence that took place during the post-election violence.

Similarly, in ICEA Lion General Insurance Co Ltd v Husseini [2024], the insurance cover excluded riots and civil commotion. There was no extension for riot, strikes and civil commotion to entitle compensation for losses arising from a riot.

Some insurance companies offer insurance for political violence and terrorism but exclude malicious damage. This may raise concerns where damage caused by goons is considered malicious and therefore exempt from cover.

Other insurers offer a wider coverage defining terrorism and political violence to encompass physical loss and damage, business interruption costs, due to a terrorist act or acts of political violence such as riot, strike, civil commotion, revolution, war, civil war, rebellion, insurrection, sabotage, coups, malicious damage, and consequential looting.

The latter wording provides cushion against political violence to a wider range of risks as currently emerging from goon violence.

As the General Election approaches in August 2027, there will be heightened political campaigns and civic activities. Considering the acts of hooliganism by goons so far, property owners, likely to be exposed to such violence, should consider whether their property is covered for political risks. Policyholders should ensure that the policies extend the cover to political risks like riot, strikes and civil commotion.

The wording should be specific to extend the cover to riots involving assemblage of three or more persons in a public place taking concerted action in a turbulent and disorderly manner for a common purpose. The cover should also encompass a public uprising by many people who, acting together, cause harm to people or to property.

The rising cases of hired goons and political violence pose great economic losses to Kenyans affected along the way of such riots. Businesses and supply chains face the risk of interruption. Whereas insurance cannot protect against civil unrest, well-worded insurance policies can ensure that consequential losses from riots, strikes and civil commotion are mitigated and compensated.

Kenyan households spent Sh27.7 billion on school-related expenses for children in schools abroad in the year to May 2025, highlighting the burden families face in the pursuit of quality education abroad.

A new official survey on inward and outward remittances shows that the cash sent to scholars abroad was equivalent to 68.4 per cent of Kenya’s total remittance outflows of Sh40.5 billion in the period.

A rising number of households are sending their children to universities abroad amid concerns about the quality of education in cash-strapped and often mismanaged local institutions, and a lack of job opportunities in the Kenyan economy for graduates.

The survey that polled 4,400 households was carried out in August 2025 by the Kenya National Bureau of Statistics (KNBS in collaboration with the Central Bank of Kenya (CBK) and Financial Sector Deepening Kenya (FSD Kenya). This is the first comprehensive nationwide assessment of household remittance flows in Kenya.

The findings showed that those aged between 20 and 29 received Sh16.02 billion in cash and in-kind remittances, while the 30-39 age group received Sh16.35 billion.

Those holding secondary education before leaving Kenya received Sh20.4 billion, or 50.2 percent of total remittance outflows, indicating that the support mainly went towards catering for tertiary education needs.

‘This pattern reflects the significant financial needs of young adults abroad, including education, living expenses, and initial settlement costs for students and early-career professionals. In addition to cash remittances, individuals in this age group also received a higher share of in-kind remittances, indicating support for both personal and professional requirements,’ said KNBS in the report that was published on Tuesday.

Recipients in paid employment received Sh5.06 billion from relatives living in Kenya, split almost evenly between cash remittances (Sh2.38 billion) and in-kind goods (Sh2.67 billion).

In contrast, out of the Sh27.7 billion sent to students abroad, only Sh89.6 million was in non-monetary or in-kind goods such as Kenyan food items.

Those categorised as homemakers received Sh930.4 million from Kenya, while unemployed individuals seeking jobs abroad were sent Sh645.7 million, all of it in cash to help them meet daily needs.

The highest ratio of in-kind goods sent abroad went to those in self-employment, whose overall remittances of Sh815 million comprised Sh725.5 million in in-kind goods and just Sh89.5 million in cash.

In terms of destination countries for the outward remittances, Turkey and the US led with volumes of Sh10.07 billion and Sh8.26 billion respectively, followed by the UK at Sh6.27 billion, Uganda at Sh5.25 billion and Australia at Sh1.42 billion.

‘The high concentration of remittances to recipients in Turkey, the US, and the United Kingdom highlights the significant educational, professional, and familial connections that drive these financial flows, while substantial transfers within the EAC emphasise the enduring importance of regional support networks,’ the report added.

Overall, the inaugural report found that Kenya’s total remittance flows were higher than previously estimated, after bringing into visibility the flows transacted through informal channels and in-kind goods transfers.

Total inflows stood at Sh931.8 billion in the 12 months to May 2025, which was Sh280.6 billion higher than the Sh651.2 billion inflows that were recorded by the CBK through formal channels like banks, mobile money and remittance service providers in the period.

Some of the channels preferred by those sending money home or abroad informally include in-person delivery through self or relatives, Hawala systems or through cryptocurrencies. The main motivation for using these channels was to cut the cost of transmission, speed, and ease of access.

For those living in neighbouring countries-particularly along the Uganda and Tanzania corridors- households reported using road transporters including buses, matatus, motorcycles, and bicycles to ferry goods to their relatives in Kenya.