Category: Business Daily

Kenya’s competition watchdog and the public procurement regulator have stepped up a crackdown on tender cartels accused of inflating the cost of government projects and denying taxpayers value for money.

The Competition Authority of Kenya (CAK) said it was working more closely with the Public Procurement Regulatory Authority (PPRA) to identify and eliminate bid-rigging schemes that distort competition in the award of public contracts.

The move comes as the government seeks to tighten oversight of procurement, which accounts for about 60 percent of public expenditure and remains vulnerable to collusive practices among suppliers.

Bid rigging occurs when firms that are expected to compete for a contract secretly coordinate their bids instead of submitting independent offers.

The practice is regarded as one of the most harmful forms of anti-competitive conduct worldwide, as it directly impacts public spending and can result in governments paying significantly more than market prices.

The Treasury estimates that about Sh1.68 trillion -60 percent of the Sh2.8 trillion budget for the national government [executive] in the next financial year, starting July – will be spent on procurement of goods, services and public works, making the integrity of tendering processes critical to public finance management.

Speaking during the inaugural CAK Research Conference on Competition and Consumer Welfare, Treasury Principal Secretary Chris Kiptoo described bid rigging as one of the most urgent competition challenges facing the public sector.

“Every shilling lost through bid rigging is a shilling stolen from a school, a road or a hospital,” Dr Kiptoo said. ‘One area where the response is particularly urgent is public procurement. Government procurement accounts for roughly 60 percent of the national budget.’

One of the most common schemes is cover bidding, where some firms deliberately submit artificially high bids or unacceptable proposals to create the illusion of competition, while ensuring a predetermined company wins.

Another tactic is bid suppression, where competitors agree not to submit bids or withdraw from a tender process to allow a chosen firm to secure the contract unchallenged.

Competition and procurement watchdogs are also tracking bid rotation arrangements, where cartel members take turns winning contracts according to a pre-arranged schedule while others submit non-competitive bids.

There are also schemes that are involved in market allocation, where competing firms divide customers, regions, government agencies or categories of contracts among themselves and avoid competing against one another.

Dr Kiptoo said the partnership between CAK and PPRA should focus on eliminating schemes that undermine competition and lock out deserving businesses, particularly small and medium-sized enterprises.

CAK Director-General David Kemei said the authority views bid rigging as a major economic threat because it increases procurement costs and diverts resources away from essential public services.

‘It is very critical that bid rigging is really minimised, if not eliminated, because of the negative impact that it has on the economy. I’m confident because PPRA leadership understands that, and is also convinced that we should have a competitive aspect when it comes to public procurement,’ Mr Kemei said.

There are also cases where businesses use subcontracting arrangements to compensate losing bidders, thereby preserving cartel agreements and discouraging genuine competition. Such practices can be difficult to detect because the bids appear legitimate on paper, yet they often leave patterns such as recurring winners, identical pricing structures or suspicious bid withdrawals.

Mr Kemei acknowledged that tackling procurement cartels would not be easy but said the law gives CAK sufficient powers to investigate anti-competitive conduct.

‘We will really save a lot for this economy when we join hands [with PPRA]. It is not an easy job, though. But since the law gives us a mandate, we will actually take it on,’ he said.

This has come at a time when the Treasury has started rolling out the electronic government procurement system (e-GP), which is expected to enhance transparency in line with the Public Procurement and Asset Disposal Act of 2015 and accompanying regulations.

Under e-GP, all government contracts are initiated, evaluated, and awarded online.

Four lenders had not met the December 2025 minimum core capital requirement of Sh3 billion and remained non-compliant at the end of March, reflecting the strain of the new rules ahead of an even higher threshold later this year.

Banks’ disclosures for the quarter ended March 31, 2026 show that Credit Bank, Consolidated Bank of Kenya, Development Bank of Kenya and Access Bank Kenya had core capital below Sh3 billion, putting them in breach of regulatory requirements.

Under the Business Laws (Amendment) Act, 2024, banks were required to raise minimum core capital to Sh3 billion from Sh1 billion by the end of December 2025, triggering a wave of fundraising across the sector.

The law requires lenders to increase minimum core capital further to Sh5 billion by the end of 2026, Sh6 billion by the close of 2027, Sh8 billion in 2028 and Sh10 billion by the end of 2029.

The revised capital requirements have put pressure on smaller lenders. At the end of September last year, 10 banks had core capital below Sh3 billion.

The 10 lenders had a combined core capital of Sh15.58 billion, leaving them needing at least Sh14.41 billion to comply with the revised Central Bank of Kenya (CBK) rules.

Capital race

Six of the 10 lenders – M-Oriental Bank, Africa Banking Corporation (ABC), Middle East Bank Kenya, CIB Kenya, Premier Bank and UBA Kenya – have since raised their core capital above Sh3 billion, leaving only four still seeking compliance.

Credit Bank, which closed March with a capital shortfall of Sh1.63 billion, is racing to raise fresh capital after shareholders approved a plan in a mid-December 2025 extraordinary general meeting to raise Sh4.5 billion through a private placement.

Two key shareholders of Credit Bank – ShoreCap III LP and Sansora Group of Companies – committed to the CBK that they would inject Sh1 billion each into the lender.

‘Pursuant to the shareholder approval of the capital-raising initiatives at the EGM held on December 19, 2025, the board and management continue to implement various capital-raising measures, particularly the private placement offer and the pursuit of other strategic partnerships aimed at bridging the capital gap, alongside strengthened and more aggressive recovery efforts,’ Credit Bank said in commentary accompanying its first-quarter earnings.

‘There is an investor who has expressed interest and submitted documents to the CBK for vetting. The investment will be in the region of $100 million (Sh12.93 billion) and will lift its core capital above Sh5 billion by the end of 2026,’ said a source familiar with the ongoing transaction.

State-owned Consolidated Bank is seeking Sh1.125 billion from the National Treasury to boost its capital from the negative Sh541.14 million reported at the end of March.

Consolidated Bank acting chief executive Dominic Murage said the lender had developed a ‘comprehensive capital build-up and restoration plan’ aimed at achieving compliance with regulatory requirements while supporting growth ambitions.

‘Raising additional capital to finance growth and maintain healthy regulatory ratios is of paramount importance and the board has put in place a clear capital build-up plan to achieve the required capital requirements,’ said Dr Murage.

Compliance pressure

Another State-owned lender, Development Bank of Kenya, has not disclosed plans to raise fresh capital. The lender closed March with core capital of Sh2.17 billion, leaving a shortfall of Sh826.97 million.

Access Bank Kenya closed December with core capital of Sh1.1 billion and requires at least Sh1.89 billion to meet the minimum threshold.

The lender, alongside National Bank of Kenya (NBK), is owned by Nigeria’s Access Bank Group and is counting on a merger with NBK to achieve compliance.

‘The directors confirm that this [capital shortfall] is expected to be fully addressed through the proposed merger with National Bank of Kenya Limited, which will strengthen the combined entity’s core capital position and ensure compliance with the regulatory requirement,’ the lender said.

NBK, which closed March with core capital of Sh12.4 billion, is already compliant, positioning the merged entity to meet the regulatory threshold once the transaction is completed. Access Bank Group acquired NBK from KCB Group.

The clock is now ticking towards another increase in minimum core capital to Sh5 billion by the end of this year, creating fresh pressure for smaller lenders.

Earlier last year, the CBK asked 24 banks whose core capital was below the final target of Sh10 billion to submit plans detailing how they intended to raise fresh capital to meet the enhanced requirements.

The Treasury first proposed an increase in banks’ minimum capital during the reading of the 2024 budget, arguing that the move was necessary to strengthen the stability of a sector that now holds more than Sh6.393 trillion in deposits.

Kenya’s higher capital threshold, the first increase in 12 years, mirrors similar moves in neighbouring Uganda and Tanzania.

The banking sector has changed significantly since the Sh1 billion minimum capital requirement was introduced in 2012. Total assets have grown to more than Sh8.624 trillion as of February this year, up from Sh2.3 trillion 13 years ago.

A few weeks ago in Stockholm’s Gamla Stan, we had drinks in a cave bar.

Dusk had fallen, and we were walking from Stortorget, the old square where the Nobel Prize Museum sits today and where, in 1520, a king and about 100 of his subjects were executed during what came to be known as the Stockholm Bloodbath.

History can be a lot to carry around after dinner, so our guide and friend suggested we stop for a drink and process the violence of the age.

We ducked into a narrow stone passageway and descended underground. It was a cave, literally. A small restaurant sat to the left and a bar to the right. Always take a right when presented with such options.

We unwound our scarves and settled into one of the dozen or so seats. The rough stone ceiling hung low enough to remind you where you were, but not low enough to force reverence. One woman ran both the bar and the restaurant. Four other patrons occupied the room, which somehow made the place feel full.

We ordered wine.

A shaft of light fell through a fire escape above us. Our friend, who is 58, told us about practising Wing Chun, a form of martial arts.

He is a master of sorts. Which explained why he wasn’t drinking. Masters, I assume, must remain pure and sober in case they are suddenly required to strike somebody with the side of a palm.

At the next table, four red-faced British tourists grew progressively louder, as British tourists have done throughout history. We ignored them as one should ignore hooligans.

Five hundred years ago, cellars like these stored beer, wine, salt, and imported goods in the cool underground. Others served as taverns where sailors gathered under flickering candlelight to trade stories, spread rumours, gamble away wages, and arrange questionable transactions with prostitutes. In short, fun times.

Five centuries later, the candles are gone, the sailors have been replaced by us, tourists, but people still come underground carrying the same cargo: stories, loneliness, hope and a thirst.

Investors seeking to exit a Sh4.8 billion real estate fund by Two Rivers International Financial and Innovation Centre (Trific) will be bought out by the company, marking a sweetener for financiers by curbing the risks of illiquidity.

Illiquidity occurs when an asset cannot be quickly converted into cash without a significant loss in value.

Trific and Nabo Capital have partnered to set up a fund for the buyout of those leaving the dollar-denominated Income Real Estate Investment Trust (I-Reit), which would limit illiquidity risks by ensuring investors quickly sell their assets without suffering significant loss in value, especially where there are no willing buyers.

According to the parent firm of Trific, Centum Investments Plc, the fund has been capitalised to the tune of Sh517.8 million ($ 4 million), which will provide immediate counter-party availability to match any small-ticket exits by investors.

‘There’s certainly liquidity risk and sometimes an investor fears getting stuck with an asset. We have created a liquidity fund with the I-Reit manager, which acts as a market maker such that once an investor offers their units for sale and they do not get a buyer; the role of this fund will be to buy back those units,’ Centum Investment CEO, James Mworia, told the Business Daily.

The Sh4.8 billion instrument is Kenya’s second US dollar-denominated I-Reit, coming two months after Africa Logistics Properties raised Sh4.5 billion ($34.6 million) through a restricted Industrial Property Reit.

Centum Investment says its experience in executing the company’s share buyback has played a crucial role in designing the liquidity fund that accompanies the Trific I-Reit.

Centum’s share buyback plan closed on March 31, with a total of 10.83 million shares having been repurchased.

Some 10.6 million shares were repurchased in the first buyback between February 2023 and September 2024 and 150,800 repurchased between October 2024 and March 2026.

‘Because the I-Reit manager is also the one doing investor relations, they will have units to sell, post-buying back from those seeking an exit, to any prospective investors they engage with. We experienced this when we did the share buyback for Centum,’ Mr Mworia said.

Trific said one does not need a lot of money to be a market maker.

According to the National Bureau of Statistics, hard currency deposits in Kenya’s banking system closed at Sh1.36 trillion in March, having grown from Sh1.24 trillion in March 2025.

‘The dollar deposits held by what we would call retail depositors in banking runs into the billions. These are people earning a meager two to three percent on their deposits,’ Mr Mworia said.

‘We thought of giving these people an opportunity of unlocking a higher return. It made sense for the Reit to not only target institutional but also retail investors.’

The Trific I-Reit targets a minimum investment of Sh129,463 ($1,000), with the offer having opened on May 13 and slated to close on June 12, 2026.

Kenya’s top nine banks were holding collateral or security for loans worth a staggering Sh5.7 trillion in December, exposing borrowers to huge losses in case of default.

The nine listed banks, including KCB Group, Equity Holdings, Co-operative Bank and NCBA Group, have grown collateral sitting on their books from Sh5.1 trillion in 2024.

The collateral held by the banks, which is over a quarter of the Kenyan GDP, was 1.5 times the loans issued by the lenders at Sh3.6 trillion, underlining the banks’ reliance on security to issue loans.

This shows that mainstream lenders are trailing personal credit digital lenders with roots in Silicon Valley who are increasingly relying on mobile phone algorithms to lend to millions, including the unbanked.

While the trillions worth of collateral is providing a buffer to lenders in the event of default, it exposes borrowers to loss of assets like land, cars and shares that are often sold at a discount in auction yards.

Already, the top banks are fighting with multiple borrowers in court for selling loan security at huge discounts relative to their market prices.

‘Historically, the risk of borrowers defaulting was high, so banks were seeking high coverage. Unfortunately, that has remained the case even when repayment rate has improved and more information about borrowers is available,’ said Francis Mutonyi, a financial consultant with Goldplus Advisory.

The nine banks, which hold 75.5 percent of Kenya’s banking market share, had gross non-performing loans of Sh553.8 billion loans at the end of 2025, which represents 15.1 percent of their credit offered households and businesses and is lower compared to the industry default rate of 15.4 percent.

The bulk of the collateral at nearly half of the securities is in the form of homes, office blocks and land, highlighting how property ownership and access to loans are tied together.

Common assets used as collateral include car logbooks, shares and debentures.

KCB Group, with a loan book of Sh1.1 trillion, had security for loan defaults of Sh3 trillion. The group said it did not have a breakdown of the collateral apportioned to the subsidiaries of Kenya, Uganda, Tanzania and DR Congo.

Equity Group had security worth Sh784.4 billion, including land at Sh709 billion, shares valued Sh8.7 billion and assets classified as others valued at Sh75.7 billion.

NCBA Group had assets valued at Sh529.1 billion held as collateral of which property was Sh280.2 billion, logbooks Sh59.4 billion and debentures Sh152.2 billion.

The bank had a loan book of Sh317.1 billion.

Co-operative Bank of Kenya had collateral of Sh208.9 billion, made up of land (Sh113.7 billion), logbooks (Sh36.09 billion) and debentures (Sh59.1 billion).

This indicates that NCBA, Equity and Co-operative had Sh1.1 trillion worth of real estate and land as security.

Without land, most Kenyans lack collateral to access financial services, restricting their ability to invest.

‘Risk-based lending has not fully matured in Kenya, despite the introduction of the credit reference bureau (CRB) system,’ said Mr Mutonyi.

‘Even borrowers with strong cash flows, good banking history, and positive CRB records still find it difficult to obtain unsecured business financing,’ he added.

Kenya has three credit bureaus, with the first starting operation in 2010 in what was expected to help banks lend more to those without security and lower commercial lending rates by improving credit information in the banking sector.

But despite the presence of a credit information pool in Kenya, commercial bank in the country have not yet passed on the benefits.

Fintech firms like Tala and Branch argue that their technology, which relies on an algorithm that builds a financial profile of customers, minimises the risk of default.

Using machine learning algorithms, the apps assess the creditworthiness of borrowers by scanning personal data on their phones, including contacts, mobile money transactions, social media footprint and web history.

Within minutes, loans, ranging from Sh500 to Sh300,000, are deposited and are accessible on borrowers’ phones.

Bankers reckon they are now turning to data analytics to support unsecured lending, especially small-ticket loans.

‘In the banking industry now, there is a notable growth in unsecured lending as banks leverage on digital channels to extend unsecured facilities,’ said Raimond Malonje, chief executive of Kenya Bankers Association.

‘For every 10 unsecured facilities, there are up to 25 secured facilities in value. As such, there is no overreliance on secured loans in the industry.’

Provision of collateral in other markets has been used to ensure the borrower gets better loan terms, including pricing and tenure, but in Kenya collateral is a basic requirement to accessing credit.

Banks discount assets issued as collateral at different rates.

The discounting rate of land as collateral is estimated at 70 percent of property value to offer lenders adequate cover in the event of default and auction of the asset via forced sale.

The law bars auctioneers from selling property below 65 percent of their market value.

Logbooks are used when the value of a car is discounted at 70 percent debt while the more volatile assets like shares cover 50 percent of value.

Household goods such as television sets, fridges and sofa sets are accepted as security for short-term loans.

Saccos are the latest to push back against plans to allow the Kenya Revenue Authority (KRA) to raid taxpayers’ bank accounts in the middle of contested tax demands, warning of potential cash flow pressures and operational disruption.

The Kenya Union of Savings and Credit Cooperatives (Kuscco) on Wednesday asked the National Assembly not to pass the proposal in the Finance Bill 2026, which seeks an amendment on the Tax Procedures Act.

Section 42(14) (e) of the Tax Procedures Act bars the KRA from issuing agency notices, freezing bank accounts and assets or taking any enforcement measures while a tax dispute is still active or under appeal.

However, the Finance Bill 2026 is proposing the deletion of this provision.

‘Taxpayers may feel compelled to prioritise immediate financial survival over the pursuit of legitimate claims, particularly where enforcement measures such as agency notices restrict access to working capital or disrupt operations,’ Kuscco said in submissions made to Parliament by its Chief Executive Arnold Munene.

Kuscco joins the Kenya Bankers Association and Kenya Private Sector Alliance (Kepsa) in campaigning against the proposal.

According to Kepsa, the agency notices will compel third parties-typically bank or trade debtors-to remit funds directly to the KRA on behalf of the taxpayer even before a dispute is heard and determined.

‘If the taxpayer subsequently succeeds on appeal, recovery of those funds from KRA is uncertain or protracted,’ Kepsa said in its submissions on May 25.

‘The practical effect is that the right of appeal is rendered illusory. A taxpayer who cannot withstand the financial pressure of an agency notice is compelled to abandon a meritorious appeal or settle under duress rather than on the merits.’

Kuscco told the National Assembly Departmental Committee on Finance and National Planning that allowing the taxman to recover disputed amounts through agency notices will disrupt operations of financial entities such as saccos by restricting access to working capital and liquidity.

‘Funds held in sacco accounts are not idle reserves but are deployed to support lending, member withdrawals and ongoing financial obligations. The issuing of agency notices against such funds can disrupt lending and delay access to member savings,’ Mr Munene said.

Similar attempts to expand the enforcement powers of the KRA have been proposed in previous Finance Bills, reflecting an ongoing policy tension between strengthening revenue collection and protecting the Kenyan taxpayer.

Kepsa said giving KRA such powers will have ‘immediate and severe’ consequences for taxpayers with disputes currently before the courts, given that they had structured their litigation strategy on the basis of the existing tax procedures.

‘Removing that protection mid -litigation-without any transitional provisions-exposes them to enforcement action they had no reason to anticipate when commencing their appeals. We submit that the proposed deletion should be rejected in its entirety,’ Kepsa told the parliamentary team.

Private sector players are concerned that premature enforcement through agency notices also poses difficulty and delay in obtaining refunds where a taxpayer ultimately succeeds in a dispute.

Kenya’s tax dispute resolution process – from objection to tribunal and court determination – is usually lengthy.

Private sector players are, therefore, worried that the decision would see them part with significant amounts and chase the money for many years since refunds are ‘neither automatic nor immediate’ when they win cases.

‘The issuance of agency notices during disputes may significantly disrupt business operations by restricting access to working capital and liquidity,’ Mr Munene added in his submissions.

‘This risk is particularly pronounced for saccos and other financial institutions, whose operational stability depends on the continuous availability of funds.’

The value of Kenya’s food and beverage imports hit Sh81.6billion in three months to March 2026, marking a record first quarter expenditure and underscoring renewed concerns over dwindling domestic crop output.

The 40.9 percent jump in the food and beverages import bill from Sh57.9billion in the corresponding quarter of 2025 also represents the fastest growth since 2023 when the country battled a devastating drought and disruptions in the global supply chain.

Provisional data from the Kenya National Bureau of Statistics (KNBS) show the increase of Sh23.7 billion ranked food one of the biggest drivers of the country’s rising import bill and signalled growing reliance on foreign supplies to bridge domestic production shortfalls.

Kenya remains heavily dependent on imports of wheat, rice, edible oils and sugar, while yellow maize is periodically imported to bridge production deficits during drought years and stabilise food supplies.

Food imports expanded nearly three times faster than Kenya’s overall import bill, which grew 14.4 percent to Sh740.8 billion in the review period from Sh647.6 billion a year earlier.

The renewed jump in food imports comes against a backdrop of worsening drought conditions across large parts of the country.

The State Department for Arid and Semi-Arid Lands (ASALs) and Regional Development earlier this year warned that drought conditions had intensified following successive seasons of below-average rainfall.

“In early 2026, drought conditions have intensified in ASALs, following successive below-average rainfall,” the Department’s Principal Secretary Kello Harsama, who was last week transferred to the Petroleum department Mr Harsama said on February 27.

He said that below-average rains in late 2024 limited recovery, while the 2025 short rains performed even worse in both amount and distribution.

The poor rains constrained water availability, pasture regeneration and crop production, worsening food insecurity across drought-prone regions in northern Kenya.

According to the Kenya Food Security Steering Group, a multi-agency entity coordinating food security in Kenya under the leadership of the National Drought Management Authority (NDMA) alongside the UN World Food Programme, 3.5 million Kenyans required humanitarian food assistance as of February 2026, up from 2.2 million people in February 2025 and 1 million in July 2024.

The increase followed the failure of the October-December 2025 short rains, which reduced crop output and undermined livestock productivity.

The government says it was forced to spend more than Sh6 billion on drought response measures in 23 arid and semi-arid land counties, including food assistance, livestock feeds and water provision.

A further Sh778.5 million was disbursed through the Hunger Safety Net Programme, an unconditional Government cash transfer programme under NDMA, to support 133,101 vulnerable households in eight severely affected counties.

The Treasury has already warned that drought poses a direct threat to economic growth this year through lower agricultural output and wider spillover effects across the economy.

‘A drought affecting crop production in 2026 is projected to reduce output noticeably, reflecting immediate losses in agricultural value added and spillover effects across the broader economy,’ the Treasury wrote in the 2026 Budget Policy Statement.

The Treasury officials added that drought-related losses in livestock production would also weigh on growth, although the effects would be smaller because of the sector’s relatively weaker linkages with the wider economy.

The latest spending marks the highest first-quarter food import bill on record, surpassing levels recorded during the food crisis triggered by drought and global market disruptions in 2022 and 2023.

The previous surge came in 2023 when Kenya was reeling from what the government described as the worst drought in four decades, alongside supply chain shocks linked to Russia’s invasion of Ukraine.

The crisis pushed up prices of staple foods and fertiliser, squeezing farmers and consumers while exposing the country’s dependence on imported food commodities.

President William Ruto’s administration responded by introducing fertiliser subsidies and allowing tax-free imports of selected food items to stabilise supplies and ease pressure on household budgets.

Food items imported duty-free included white maize, rice, yellow maize, soya beans, soya bean meal, protein concentrates and feed additives.

The National Treasury said the tax waiver was intended to “bridge the food stocks deficit as well as lower and stabilise food prices.”

The fertiliser subsidy programme became one of Dr Ruto’s flagship interventions after he assumed office in September 2022 amid soaring food prices and widespread concern over the cost of living.

At the time, fertiliser prices had climbed to about Sh6,500 for a 50-kilogramme bag, driven by supply disruptions in global markets following the war in Ukraine.

Government subsidies subsequently reduced the price to Sh3,500 before falling further to Sh2,500.

As Parliament prepares to debate the Finance Bill 2026, economists, policymakers, tax experts and academics are confronting a central question: how to position Kenya for a rapidly changing global economy without deepening pressure on households and businesses already grappling with rising costs.

That tension framed discussions at a fiscal policy dialogue hosted by KCA University through its Centre of Excellence in Tax Education (CETE), where speakers examined the implications of the Finance and Appropriations Bills 2026 and what they signal about Kenya’s economic direction.

The forum brought together policymakers, tax practitioners, academics, students and private sector players to interrogate fiscal sustainability, taxation, public expenditure and investment priorities at a time of rising public debt and heightened scrutiny of government spending.

Speaking at the forum, Nairobi International Financial Centre (NIFC) Chief Executive Daniel Mainda said Kenya’s fiscal and regulatory choices must increasingly be understood as signals of Kenya’s economic ambitions, not just revenue tools.

He said Kenya is now competing for capital in a global marketplace that extends far beyond the region.

‘Kenya is not only competing with its neighbours. Nairobi today is competing with Dubai, with Singapore, with Mauritius, with Abu Dhabi and increasingly with digital ecosystems that do not care about borders anymore,’ he said.

‘The countries that will win are not necessarily those with the most capital. They will be those with innovation, institutions and environments where capital feels safe.’

Mr Mainda said the Finance Bill should therefore be read as a blueprint of the kind of economy Kenya is trying to build, particularly as it increasingly engages with digital finance, startups and cross-border investment flows.

He pointed to Kenya’s fintech sector, mobile money ecosystem and startup activity as evidence that the country already has the foundations of a regional innovation hub.

‘There is a reason Nairobi continues to attract startups, venture capitalists, regional headquarters, fintech firms and technology companies,’ he said. ‘Every day, young Kenyans are building businesses from laptops, from phones, from co-working spaces and small offices across the city.’

He noted that Kenya remains among Africa’s leading destinations for venture capital and continues to process trillions of shillings annually through mobile money platforms, reflecting a fast-evolving digital economy.

However, economist and public finance expert Dr Patrick Mumo Muinde cautioned that macroeconomic stability must be matched with attention to lived economic realities.

Big numbers

While noting improvements in inflation and a rebound in private sector credit, he warned that headline indicators often mask the strain on households and small businesses.

‘We can talk about big numbers and growth projections, but the real question is how these policies affect households, businesses and taxpayers,’ he said.

Dr Mumo pointed to fuel price volatility and global economic uncertainty as key risks undermining business planning and investment confidence.

‘What investors and businesses need is predictability and stability. If businesses cannot predict their production costs, they cannot accurately determine their margins or plan for growth,’ he said.

He argued that the success of the Finance Bill and broader fiscal policy should ultimately be judged by their impact on ordinary citizens.

‘The final resting place of every policy is the household and the taxpayer,’ he said.

‘How does it affect the person selling vegetables? How does it affect the business owner? How does it affect household purchasing power?’

While Mr Mainda emphasised Kenya’s long-term competitiveness and global positioning, Dr Mumo underscored the short-term pressures facing households and enterprises, highlighting a policy tension between growth ambitions and economic relief.

KCA University Vice Chancellor Prof Isaiah Wakindiki said universities are increasingly becoming critical spaces for public policy engagement, bringing together experts, policymakers and young people in structured dialogue.

‘How we allocate resources reflects who we are as a society and what we value for tomorrow,’ he said.

He noted that such forums help bridge the gap between academic theory and real-world policymaking, especially for students preparing to enter governance, finance and industry.

‘Universities exist as an intersection of knowledge and society. We are stewards of inquiry and incubators of solutions that outlive political cycles,’ he said.

Prof Wakindiki added that exposure to fiscal debates allows students to understand how policy decisions translate into national outcomes.

Commercial banks should reassess the billions of shillings in loans extended to State corporations, experts have said, warning that government backing of the debt may not be guaranteed under the new law which transformed many public agencies into public limited liability companies.

Analysts at law firm Bowmans said lenders should treat State-owned enterprises (SOEs) as standalone entities on the strength of their own balance sheets, rather than quasi-sovereign borrowers with government support as has been the case in the past.

The warning follows the enactment of the Government Owned Enterprises (GOE) Act, 2025, which came into force in December 2025 and overhauled the legal framework governing SOEs.

‘…Lenders should not assume continued sovereign support and should reassess GOE credit risk on a standalone basis,’ the analysts including Aleem Tharani, Dominic Indokhomi, Edwin Baru, Nairuko Kantai and Qabale Guyo said in a note.

‘Existing guarantees that refer to a named statutory corporation may not automatically extend to the successor company, depending on the drafting’.

The law repealed many individual statutes that created State agencies and requires numerous corporations to be reconstituted as public limited liability companies as part of a broader programme to commercialise public assets and attract private investment.

‘The GOE Act also does not expressly provide for the transfer of sector-specific regulatory approvals, operating licences, concessions or permits. Financial institutions should review each approval on a case-by-case basis,’ the analysts said.

The concern is significant given the size of borrowing by State corporations outside Kenya’s officially guaranteed public debt.

Treasury data shows at least 14 state-owned enterprises had accumulated Sh44.87 billion in non-guaranteed debt by June 2025, much of it owed to commercial lenders. The loans are excluded from Kenya’s public debt stock because they lack government guarantees, although they still expose taxpayers to potential fiscal risks if distressed entities fail to honour their obligations.

For years, banks have viewed lending to State corporations as relatively low-risk because of their strategic importance and the belief that the government would ultimately step in if necessary. Some of the country’s largest public entities have substantial outstanding obligations to lenders.

Kenya Power carried Sh10.4 billion in non-guaranteed loans as at June 2025, including Sh7.07 billion owed to Standard Chartered Bank and Sh3.37 billion borrowed from NCBA Bank.

Its exposure was closely matched by KenGen, which held Sh10.34 billion borrowed from Absa Bank Kenya, the largest single non-guaranteed loan among state corporations.

The Kenya Airports Authority had outstanding loans of Sh8.98 billion from Agence Française de Développement and the World Bank, while the Geothermal Development Company owed NCBA Bank Sh1.36 billion.

The financially troubled National Oil Corporation of Kenya carried Sh5.98 billion in commercial debt, comprising Sh3 billion owed to KCB Bank and Sh2.98 billion to Stanbic Bank.

Although the GOE Act provides that successor companies will inherit the assets, liabilities, rights and obligations of the entities they replace, uncertainty remains over government support arrangements linked to the previous structures.

Bowmans says guarantees, comfort letters and support agreements tied to specific statutory corporations may not automatically survive the transition, depending on their wording.

The uncertainty could influence how banks price loans, assign risk weights and determine future lending to state-owned enterprises.

The law firm further warns that some existing financing agreements may contain provisions tied to the statutory status or borrowing powers of corporations established under laws that have since been repealed.

As a result, lenders may need to renegotiate facility agreements, obtain waivers or seek legal confirmations to avoid complications during the transition process.

Additional risks could emerge from audits required before assets and liabilities are transferred to successor companies.

According to the analysis, the reviews could reveal previously undisclosed debts, litigation claims or other liabilities that materially alter the financial position of affected enterprises.

The GOE Act does not prescribe a deadline for completing the conversion process, potentially prolonging uncertainty for lenders, investors and the corporations themselves.

Bowmans is advising financial institutions to review their loan books, security arrangements, guarantees and other exposures linked to state-owned enterprises.

The firm also recommends that lenders whose credit assessments rely on government support seek written confirmation from the National Treasury on whether such backing will continue after conversion.

Two former managers of DTB Bank and a third suspect were on Tuesday charged with stealing more than Sh149.3 million from a customer’s account in a scheme that allegedly ran for several years.

Salimah Ameen Pirbhai, the former DTB Parklands branch manager, Aabid Alkarim Kassam, the former assistant branch manager, and Tazim Sidi Vassanji were arraigned before a Milimani court facing a total of 68 counts, including conspiracy to defraud, stealing, money laundering and forgery.

The prosecution alleges that between 2016 and 2020, the trio fraudulently withdrew funds from Great Britain Pounds account belonging to Rozina Nurdin Patelia.

The court heard that investigations into the alleged theft began in July 2025 and that the accused cooperated with officers from the Banking Fraud Investigations Unit.

Fraud charges

In the first count, the three are accused of conspiring to steal £233,270.14 (about Sh40.6 million) from Ms Patelia’s account between July 5, 2019 and March 26, 2020 at DTB’s Parklands branch.

Pirbhai, 55, was separately charged with stealing Sh39.6 million from the bank on June 4, 2025 while serving as branch manager.

She, Kassam, 43, and Vassanji, 57, also face a joint charge of stealing £233,270.17 from Ms Patelia’s account between July 5, 2019 and June 26, 2020.

Kassam faces the bulk of the charges. He is accused of stealing Sh58.2 million from the same account between October 31, 2016 and April 5, 2018, and a further Sh10.9 million between June 14, 2019 and October 4, 2021 while serving as assistant manager at the Parklands branch.

The prosecution further alleges that the three engaged in money laundering by acquiring and retaining £233,270.17, knowing or having reason to believe that the funds were proceeds of crime.

Kassam was separately charged with retaining Sh58.2 million and Sh10.9 million allegedly obtained through fraudulent transactions.

Forgery counts

According to the charge sheet, Kassam made a false instruction letter dated June 5, 2019, purporting that it had been authored by Ms Patelia and authorising cash withdrawals from her account.

The Director of Public Prosecutions further alleges that the three forged another instruction letter dated June 9, 2019, claiming it had been issued by the account holder to authorise withdrawals.

Pirbhai is accused of preparing a fake bank statement on June 10, 2025 for the account and later uttering the document with intent to deceive.

Kassam also faces several forgery-related charges. He allegedly forged withdrawal slips for GBP 8,500 and GBP 8,700 in June 2019 and is accused of generating fraudulent withdrawal documents amounting to more than GBP 7.6 million.

In addition, he allegedly created false email instructions purporting to have been sent by Ms Patelia authorising the liquidation of multiple fixed deposits valued at millions of shillings between 2016 and 2018.

Bond terms

The accused sought release on bond, arguing that they had fully cooperated with investigators and were not flight risks.

‘I urge the court to release the accused on bond as they have cooperated with investigators since July 2025 when the probe into the alleged theft of funds from the complainant began,’ a defence lawyer submitted.

The court heard that the three had earlier been released on police cash bail of Sh100,000 and had never failed to attend questioning sessions.

The defence further argued that the accused were in poor health and had no intention of leaving the country.

‘I urge this court to consider releasing the accused on a cash bail of Sh100,000.’

The prosecution did not oppose their release but urged the court to consider the substantial sums involved in the alleged fraud.

In a brief ruling, the court noted that the accused had complied with investigation requirements while on police bond.

The court released Kassam on a bond of Sh2 million or an alternative cash bail of Sh500,000. Pirbhai and Vassanji were each released on a bond of Sh1 million or an alternative cash bail of Sh300,000.

The magistrate directed the prosecution to supply witness statements and documentary evidence to the defence.

The case will be mentioned on June 17, 2026 for directions and to confirm compliance with disclosure requirements before hearing dates are set.