Category: Business Daily

Consumers will miss out on the benefits of the fall in global fuel costs during the June 15 review of diesel, petrol and kerosene pricing after Kenya revised the formula for calculating imported petroleum.

Imported cargo shipped in the country between May 10 and May 31 will be based on the average global prices of diesel, petrol and kerosene in April, the new formula indicates.

Shipments that arrive between June 1 and June 9 will be based on the average prices for May.

The review of formula indicates that consumers will not enjoy fully the drop in the cost of refined fuel in May, notably in the second half of the month.

This signals that the government will have to deploy a larger subsidy to meet President William Ruto’s promise of cutting the cost of diesel by Sh10 per litre in the June-July pricing cycle to provide additional relief to consumers.

Global diesel prices fell to $1,132.04 (Sh146,576.53) per tonne in May from $1,409.28 (Sh182,473.57) in April, according to Platts-a global provider of energy and commodities information and benchmark prices.

Jet fuel dipped 23.4 percent to $1,167.92 (Sh151,222.28) per tonne from $1,526.69 (Sh197,675.82) in the same period.

Industry executives reckon that consumers will miss out on last month’s drop in the global prices in the hope of a deal between the US and Iran.

Oil prices recorded their biggest monthly fall since 2020 in May on hopes that a deal between the US and Iran will lead to the reopening of the crucial Strait of Hormuz.

The price of the international oil benchmark Brent crude fell almost 20 percent in May, declining steadily in the second half of the month as signs emerged that the two sides could be close to a deal.

‘Had they used the May Platts, prices should have come down in the June 15 review, even without the subsidy. But now this [drop in prices] won’t happen due to the change in the months used to price fuel cargoes,’ said an oil executive who sought anonymity.

Two cargoes of diesel and one of jet fuel were imported May 16 and May 30, with industry simulations showing that importers will pocket Sh6.079 billion on diesel and Sh3.702 billion on dual-purpose kerosene.

The energy regulator says that the changes are critical and will align the local pricing of fuel with the prevailing global trends, ensuring that consumers are not denied the benefits of a drop in global fuel prices in the long run.

‘Government wanted to achieve consistency and greater transparency in pricing. Two instances, one in 2023 and the other in the recent past where pricing may have been switched between the two halves to the detriment of the consumer forced the government to act,’ Joseph Oketch, the acting director-general of the Energy and Petroleum Regulatory (Epra), said.

Documents seen by this publication show that 176 oil marketers attended the meeting where the Ministry of Energy and Petroleum announced the changes.

‘The parties have agreed to amend Clauses 10.1.1.1 and 10.1.1.2 of the Agreement, regarding the pricing mechanism for delivered cargoes,’ a document from the Ministry of Energy and Petroleum shows.

‘For cargoes whose first day of delivery date range is between 1st to the last day of the month, the applicable month of pricing shall be the immediate month prior to the month of delivery, i.e., the average of the published quotation during the month (M-1).’

Public transporters staged a two-day strike last month against the rise in fuel prices in the wake of the Iran war.

That brought economic activity in Nairobi to a standstill and degenerated into clashes between protesters and police that left ?four people dead and about 30 injured.

The government, which each month sets a maximum fuel retail price that marketing companies can charge customers, last month hiked diesel price by 23.5 percent to Sh242.92 a litre for the May-June pricing cycle, but reduced it by Sh10 on May 18 in response to the strike.

President Ruto said his government had spent at least Sh28.1 billion to reduce fuel prices between April and June, straining public finances.

Kenya’s inflation accelerated for the second month running in May, hitting its highest in more than two years, largely due to fuel price hikes linked to the Iran war, hurting workers’ disposable income.

Inflation surged to 6.7 percent in May ?from 5.6 percent in April, the Kenya National Bureau of Statistics (KNBS) said in a report, with the rate being the highest since January 2024, when it stood at 6.9 percent.

The jump in inflation will hit workers hard amid reports that the cost-of-living measure has wiped out the marginal pay rises employers have offered staff in the past five years.

Inflation is ?now near the top of the government’s preferred 2.5 percent and 7.5 percent range.

The spike in energy costs is expected to reduce the Central Bank of Kenya’s room for further cuts on the benchmark rate, a prospect that will freeze the drop in lending rates.

The central bank is ?due to announce its next interest rate decision on June 9, after leaving its key rate unchanged at its last meeting in April.

Riddled with dependent parastatals, kneejerk preconceived supplementary budgets, and irrational taxation, it hobbles and bleeds a tiny fraction of the formal working population. How did Kenyans become the proverbial milk cows?

Incomplete reforms: For an overhaul, the Presidential Task Force on Parastatal Reforms (March 2013-November 2013) and the Parastatal Reforms Implementation Committee, November 2013-December 2014, reconfigured public finances and drains from parastatals.

Proposals identified, among others, the establishment of an Office of Management and Budget, a Government Investment Corporation to get rid of debt-ridden parastatals, and a world-class Sovereign Wealth Fund-vetted by the Committee on Implementation of the Constitution as a vehicle for Kenya’s incipient boom in natural resources worth trillions of shillings.

The proposals-had they been implemented then-could have helped rationalise government. Today, they are being ‘cherry picked’ in flawed rent-seeking vehicles against Article 206 of the Constitution.

The National Infrastructure Fund in particular is activated as a mongrel of the world-class and award-winning National Sovereign Wealth Fund Bill 2014. It aims to snare a pipeline of hidden public debt and corruption without accountability.

It is evident that no aspiring President of Kenya short of a relevant sound economic agenda, will have a leg to stand on hereafter, unless two cracks in macroeconomic policy are sealed: the fiscus and monetary policy.

Forays into infrastructure projects and Singaporean dreams are a hunt for funds that turn Kenya’s development potential on its head: for the reforms required to salvage the economy must start from existing economic sectors, with headline fiscal and monetary policy to drive investment and output mopping up mass unemployment, which can deliver results.

The late President Kibaki demonstrated how. The Finance Bill 2026 and proposed 2026-27 Budget signify deepening flaws. Expect the now familiar revenue underperformance.

To create hope and install a legitimate fiscus, a hierarchy of preparatory reforms are a prerequisite.

Today Kenya has the skilled Gen Z to hone capacities and capabilities needed to conceive, design, and implement the structural transformation envisaged by the Parastatal Reforms initiative of 2013-2014.

Until Kenya restructures, transforms, and aligns activities to investment, employment, and output priorities, and until the tax base is reframed to reflect productive opportunities for Kenyans, future governments will struggle, with taxation explosively misaligned to sources of gross domestic product (GDP). How can this be fixed to create hope and restore legitimacy?

Fiscal Policy: Cracks in the fiscus hibernated over decades to make taxation appear predatory, serving a thin band of compulsive elite spenders, while impoverishing the masses. Finance Bill 2026 works against leading sectors and suffocates private sector opportunities. As high as 82 percent of the population earn livelihoods in the informal sector. The formal sector hosts only 12 percent.

In the labour force of 23.8 million, only 3.1 million are formal sector workers; only less than 12.5 percent of those (387,418) earn Sh100,000 or more per month. With unemployment rampant, Finance Bill 2026 should endeavour to expand this narrow band, along with the formal corporate sector.

Efforts to overtax the band with regressive taxes worsen against ongoing corporate business closures. Revenue targets thus fail repeatedly while expenditures are as untamed in the national government as in the counties. The informal sector (MSMEs) must receive greater incentives to raise employment and the tax base.

Example: the Finance Bill 2026 and Budget 2026-27 raise tax on mobile transactions and gadgets, reversing world class gains Kenya has made in mobile financial innovations and associated employment. It depresses work for nascent highly skilled digital creatives.

By substitution, transactions will migrate to the underground and to cash. An IMF study in Cameroon, CAR, and Mali showed deadweight loss and efficiency costs reach 35 percent from similar policies. M-Pesa, Airtel Money, etc., should expect their electronic floats (aggregate balances in mobile accounts) to dwindle in favour of banks and mattresses? Who will energise digital creatives facing job cuts?

Obvious strategies to reset the tax base and tax fairness are to re-look sectors and their potential contributions to GDP. Economic activity follows from higher investment, employment, and growth of output. The tax base also rises, a key lesson and legacy from the late President Kibaki. Figure 1, based on KNBS Economic Survey 2026, ranks sectors based on contributions to GDP, 2025.

Agriculture, forestry, and fishing at 23.2 percent tops the list and should be a priority in the fiscus. It is also the foundation of livelihoods for a majority of Kenyans. Yet Kenya consistently spends less than three percent of revenues on agriculture.

The assortment labelled ‘Other sectors’ contains segments with dynamic potential for growth and tax base, on condition a well-managed transition to higher investment, employment, and growth is planned.

A notable sector is mining and quarrying. Contributing 0.8 percent to GDP, it can deliver dramatic economic gains worth trillions of shillings from Kenya’s natural resource wealth (coltan, gold, titanium and manganese, among others) through investment, employment, and growth opportunities.

A government focused on endowments could trigger a revenue boom by embedding lucrative value chains domestically. It can propel the manufacturing sector, which at present contributes a measly 7.1 percent- half its contribution after years of decline; it now ranks sixth, despite ample tax exemptions and imported inputs.

Monetary Policy: In advanced economies, fiscal policies are coordinated with monetary policies to stabilize the economy and supervise the financial system. Kenya’s banking system and financial sector profits handsomely from a small unsophisticated financial market.

Banks dominate lending and focus on government as a lucrative cash-cow.

The milk consists of customer deposits on the Liabilities side of their balance sheets (including deposits of Counties, Ministries, Departments, and Agencies (MDAs), and parastatals) on which banks pay low interest rates. Into this pool of deposits also go the electronic floats of Safaricom, Airtel, etc. So does large unutilized balances of the much-maligned Housing Levy.

Banks, from the Assets side of their balance sheets, then trade this milk, lending substantial sums to government in lucrative Treasury Bills and Bonds.

Private and foreign portfolio investors join the queue as do Pension Funds and unutilized Housing Levy balances parked in short-term government securities. Banks add a wide monopolistic interest margin called the spread and earn lucrative returns on equity (ROE) playing weekly and monthly auctions at CBK.

In 2024 ROEs reached 20 percent while US banks earned ROEs of 10 percent, half that figure. It explains why Kenyan banks consistently rank among the most profitable globally by ROE.

Problem: Government’s redemptions of securities using taxpayer funds to pay interest on its funds (as well as funds initially deposited by MDAs, Counties, and parastatals etc.) further raids taxpayers’ money to pay the banks. Government thus increases taxes to pay high rates of interest on securities lent to it partly from taxpayers money deposited in the banks.

The Parastatal Reforms team attempted to cure this impact by proposing a Treasury Single Account (TSA) at CBK for Government and MDAs, etc.

Redemptions using government revenue translate to public debt service factored in budgets. Interest Payments have risen to 40 percent of Revenues while Total Debt to GDP is over 90 percent.

Finally, the negative impacts on our financial sector defy CBK attempts to direct lending to the private sector and support capital formation as part of monetary policy. In February 2026, for the 10th consecutive rate cut, CBK cut the Central Bank Rate (CBR) by twenty-five basis points to 8.75 percent. Its decisions are highly compromised as shown in Fig 2.

Depositors in the banking system (who should be able to borrow for economic activity in financial intermediation) have little or no access to credit. Private sector access limps as credit to government ‘Crowds Out’ private sector credit.

Fig 2 shows the full impact. Worldwide, Private Sector Credit is the main driver of the GDP, investment, employment, and output. Fig 2 shows ratios topping over 190 percent for USA, China, and Japan.

Kenya shoots itself in the foot with a financial sector that fails the Real Economic Sectors by perpetually starving them of capital for investment, employment output, and capital accumulation. Kenya has a lower access to credit at 31.6 percent. than Sub-Saharan Africa (SSA) average of 33.1 percent.

To paraphrase Hernando De Soto’s famous dictum on ‘Dead Capital’ Kenya is a leading Poster child for ‘Why Capital Accumulation succeeds in the West and Fails Everywhere Else’

Data from the Central Bank of Kenya (CBK) shows that lenders posted a cumulative pre-tax profit of Sh83.5 billion in the first quarter of the year, up from Sh73.5 billion in the same period last year.

The performance is limited to the banks’ operations in the Kenyan market.

Kenyan banks have been quick to cut the cost of deposits while remaining slow to reduce lending rates, allowing them to enjoy wider revenue margins.

Credit growth

The volume of loans disbursed by banks rose eight percent to Sh4.45 trillion during the review period, marking the fastest credit expansion recorded by the industry in two years.

The CBK said demand for credit from the trade sector and households was attributable to increased working capital requirements.

The credit expansion followed pressure from the CBK on banks to lower lending rates in order to spur private sector borrowing. The regulator cut its benchmark rate from 10.75 percent to 8.75 percent in the 12 months to March, signalling to banks that they should reduce loan prices.

Banks, however, were slow to pass on the full rate cuts to borrowers while moving quickly to slash deposit rates.

‘Deposit rates are often short term and banks tend to focus on transactional deposits, allowing banks to lower them almost instantly as the central bank slashed the CBR rate,’ said Ms Ndanu.

‘On the other hand, yields on loans fell at a slower pace, likely due to the high cost of legacy fixed deposits booked during the high-interest-rate environment, operational cost considerations, sticky NPLs – still in the double digits – among other considerations,’ she added.

Asset quality

Non-performing loans stood at 15.6 percent of the total loan book, equivalent to Sh694.6 billion, at the end of March compared with 17.4 percent, or Sh717.4 billion, a year earlier.

The improved quality of loan book follows aggressive debt collection efforts, including the auction of collateral by banks, the conclusion of court cases involving lenders and large corporates over defaulted loans, and decisions by lenders to write off debts they did not expect to recover.

Customer savings with banks rose 13.6 percent, or Sh782 billion, to Sh6.51 trillion, outpacing growth in lending. This suggests banks invested more in lending to the government during the review period than in extending credit to the private sector.

Small banks recorded faster growth than their larger rivals, with some institutions that had previously been loss-making returning to profitability.

UBA Kenya moved from a loss of Sh12.3 million to a pre-tax profit of Sh120.9 million, while CIB Kenya turned a Sh155.8 million loss into a profit of Sh160.1 million.

Mixed fortunes

Among the large banks, results were mixed, with Standard Chartered Bank Kenya and Absa Bank Kenya recording profit declines.

StanChart posted a 30.6 percent drop in pre-tax profit to Sh4.22 billion from Sh6.08 billion, which was attributed to interest expenses declining slowly.

Absa reported a 17.5 percent decline in profit due to higher expenses, particularly staff costs, following one-off payments of Sh717 million to employees who took voluntary early retirement during the first quarter.

KCB Bank Kenya remained the country’s most profitable lender, posting a profit of Sh17.62 billion after a 21.4 percent increase.

Equity Bank Kenya reported a profit of Sh11.9 billion, underlining the contribution of its parent firm’s regional subsidiaries, whose earnings helped the group surpass KCB in overall profitability.

The first-quarter growth signals another strong year for banks, which posted a record pre-tax profit of Sh311.8 billion last year despite reporting flat earnings in the first three months of 2025 compared with 2024.

Rising inflation could, however, cast a shadow over the sector as households prioritise basic needs over loan repayments, potentially pushing non-performing loans higher.

Notably, between the end of December 2025 and March this year, the ratio of non-performing loans rose marginally to 15.6 percent from 15.4 percent.

‘This was due to a higher increase in gross NPLs of 3.4 percent and an increase in gross loans of 1.9 percent,’ said the CBK.

Kenya’s digital lending industry is learning, sometimes painfully, that failures in data protection compliance now come with a significant price tag. As regulators intensify enforcement, unlawful handling of personal data is proving to be one of the most expensive risks facing mobile-based lenders.

The sector, which has transformed access to credit through smartphone apps and digital platforms, relies heavily on personal data. Identity details, contact information, and behavioural data sit at the core of digital credit scoring and debt recovery.

Regulators are increasingly clear that the convenience of digital lending does not reduce the obligation to process that data lawfully, accurately and transparently.

This message was reiterated in a recent decision by the Office of the Data Protection Commissioner, where unlawful processing of personal data resulted in a significant monetary compensation award to an affected individual.

While the decision turned on its own facts, the amount awarded sent a strong signal across the industry. Data protection breaches are no longer attracting nominal penalties. They are now resulting in substantial financial consequences.

One recurring concern for regulators is the failure by digital lenders to verify identity properly before extending credit or initiating recovery. In an ecosystem vulnerable to fraud and impersonation, inaccurate data can quickly escalate into serious rights violations.

When an individual is wrongly linked to a loan, persistent calls and messages demanding repayment are not simply customer service errors. They can amount to unlawful processing and harassment.

The Data Protection Act places a clear obligation on data controllers to ensure that personal data is accurate and up to date, and to stop processing where errors are identified.

Regulators have stressed that once a lender is put on notice that data may be incorrect, whether through claims of identity theft or mistaken attribution, it must act promptly. Continuing recovery efforts in such circumstances only deepens regulatory exposure and increases the risk of financial liability.

Equally troubling to regulators is how personal data is shared during debt collection. Disclosure of an individual’s information to third parties, including external debt collectors or other contacts, requires a lawful basis.

Where such disclosures occur without proper verification or safeguards, especially involving people who are not borrowers, they represent serious breaches of data protection law.

These concerns intersect directly with the Central Bank of Kenya’s Digital Credit Providers Regulations, which prohibit abusive, oppressive, or harassing recovery practices.

The regulations were introduced to restore discipline to a sector long criticised for aggressive collection tactics, misuse of contact lists and weak governance. Under the current regulatory approach, data protection failures are increasingly treated as indicators of wider compliance breakdowns.

In an industry built on speed and scale, the emerging regulatory reality demands caution. The era of rapid growth without robust safeguards in digital lending appears to be coming to an end.

The recent ODPC decision also highlights another costly risk for digital lenders: how they conduct themselves during regulatory investigations.

Attempts to deny holding personal data, minimise the extent of processing or provide inconsistent explanations have been cited by regulators as aggravating factors. Such conduct can influence the severity of penalties and expose senior officers to personal accountability.

This reflects a broader shift in enforcement. Regulators are now willing to look beyond corporate entities and examine the role of directors and senior management, particularly where there is a lack of candour or cooperation. Compliance failures are no longer viewed purely as operational issues. They are governance failures with financial and personal consequences.

The regulatory landscape around digital lending is also tightening. Licensing reforms, enhanced supervision by the Central Bank and closer coordination with the data protection regulator point to a more assertive enforcement posture.

Digital lenders are expected to invest in robust identity verification systems, clear escalation processes for disputed debts, and strict oversight of third-party collection agents.

For consumers, this shift offers reassurance. Hefty compensation awards demonstrate that unlawful data practices are no longer treated lightly. Complaints about wrongful pursuit, harassment, and misuse of personal information are increasingly translating into tangible remedies.

For digital lenders, the lesson is clear. Data protection compliance is no longer a technical afterthought or a legal formality. It is a core operational obligation with direct financial consequences. As enforcement activity gathers pace, the cost of getting it wrong is overtaking the cost of getting it right.

Kenya Railways Corporation (KRC) has defended the Sh12 billion Riruta-Ngong commuter metre gauge railway project, arguing that it complied with all legal and procedural requirements.

In submissions filed in court, KRC urged the court to dismiss a petition filed by Busia Senator Okiya Omtatah and the Karen Langata District Association, saying the project was implemented within the law and subjected to oversight at every stage.

‘At every stage, the process was subject to audit, oversight and statutory controls. There is therefore no evidential basis for the allegation that the projects are hidden, irregular, or outside constitutional governance structures,’ KRC said.

The Riruta-Ngong MGR line was commissioned in December 2023. Mr Omtatah and the association contend that funds from the Railway Development Levy Fund (RDLF) were used unconstitutionally to finance the construction and implementation of the project.

KRC, however, argued that the petition is based on a legal framework that has since been amended, adding that the changes addressed the concerns raised by the petitioners.

‘Furthermore, the Riruta-Ngong Commuter Meter Gauge Project is a railway infrastructure project and thus, the implementation and construction of such a project using funds from RDLF goes hand-in-glove with the purposes of the RDLF as outlined under Section 8(3)(a)-(c) of the Miscellaneous Fees and Levies (Amendment) Act, 2026,’ KRC said.

Mr Omtatah, however, maintained that the project commenced long before the amendment came into force on March 27, 2026.

At the time, he said, Section 8(3) of the principal Act restricted the use of the fund to the construction and operation of the Standard Gauge Railway network.

The senator further argued that the 2026 amendment does not contain any express retrospective provision validating expenditure incurred before its enactment.

‘Consequently, any application of RDLF funds towards the project was unconstitutional, unlawful and without statutory authority,’ he said.

Mr Omtatah also argued that the project was undertaken in blatant violation of laws governing public investment in Kenya.

He submitted that no feasibility study was conducted for the railway line as required under the relevant regulations. He further argued that the government’s failure to produce a pre-feasibility study, despite a direct court order, demonstrates either that no such study exists or that the project proceeded in fundamental breach of mandatory public investment requirements.

Mr Omtatah said a feasibility study for a mega project is not optional.

‘It is a mandatory statutory condition precedent to project approval, financing, procurement and budgetary allocation. The public investment management framework expressly prohibits an accounting officer from seeking approval or budgetary allocation for a public project unless the prescribed feasibility requirement have first been complied with and approved in accordance with the law,’ he said.

The recent fire tragedy at Utumishi Secondary School in Gilgil, which claimed the lives of 16 learners and left several others seriously injured, has once again reopened a painful national conversation. It forces us to pose a difficult question: should Kenya continue maintaining boarding schools in their current form, or is it time to abolish or fundamentally re-evaluate their usefulness?

Boarding schools were shaped in the pre-independence era and later expanded as instruments of access to education, national integration, and academic efficiency.

Over time, they evolved beyond academic institutions into structured environments for discipline, identity formation, and social mobility. For many learners, they provided stability, moral grounding, and exposure that may not have been equally available in home settings.

However, the current crisis is not necessarily that boarding schools are inherently obsolete. It is that the ecosystem supporting them has significantly weakened.

Several structural challenges are now evident.

First, student welfare systems have not evolved at the same pace as changing population pressures and modern social dynamics. Overcrowding, under-staffing, and inadequate psychosocial support have reduced supervision and care within the institutions.

Second, safety infrastructure and enforcement remain erratic. Fire preparedness, emergency response systems, and general infrastructure maintenance in many schools fall below acceptable standards, exposing learners to avoidable risks.

Third, social behaviour patterns among learners have changed. Exposure to digital platforms, peer influence, and evolving family structures have created new realities that older disciplinary models are struggling to manage effectively.

Fourth, parental engagement has, in some cases, been unintentionally weakened by the boarding system itself, creating gaps in continuous moral guidance and emotional support.

Something has indeed shifted. Increasingly, some education institutions are grappling with rising cases of indiscipline, including drug abuse, coordinated unrest, and disruptive behaviour often influenced by a few learners. At the same time, traditional disciplinary frameworks are no longer applied with the same consistency or authority they once were.

This shift is partly a consequence of history. Past abuses of disciplinary authority by some educators led to serious outcomes, including injury and loss of life.

These incidents necessitated stronger safeguards under the law. However, the unintended effect has also been a weakening of structured discipline in some schools, leaving administrators constrained in enforcing order effectively.

Parents have also become central to this evolving dynamic. While their role in safeguarding children is essential, some have increasingly resisted firm corrective measures, thereby weakening the authority structures within schools.

It is, therefore, imperative that government urgently implements all existing audit reports and safety recommendations on schools..

Where institutions fail to meet minimum thresholds, decisive interventions, including temporary closure for inspection, correction, and certification, should be considered.

Beyond physical infrastructure, Kenya must now embrace technology-driven disaster preparedness systems as a core part of school safety.

Modern institutions should be equipped with smart fire detection and alarm systems capable of automatically triggering real-time alerts to nearby fire stations, police units, and emergency response teams using GPS-enabled location systems.

In addition, schools should adopt structured digital safety and intelligence systems that allow early detection of risks such as bullying, drug abuse, radical behaviour shifts, or planned unrest.

These systems, however, must be carefully designed to protect learners’ rights and ensure that whistleblowers are never victimised or exposed. A safe reporting culture-supported by anonymous reporting tools and independent safeguarding officers-should be institutionalized in every school.

Equally urgent is the need to re-audit disciplinary frameworks to ensure they align strictly with the Constitution and legal safeguards, while still restoring order, accountability, and learner discipline.

The current funding model is under strain, particularly under the Competency-Based Curriculum (CBC). Junior Secondary Schools (JSS), in particular, continue to face serious challenges in infrastructure, staffing, and learning materials, exposing systemic capacity gaps that must be urgently addressed.

Ultimately, political leadership, school boards, and education authorities must treat safety, infrastructure investment, technology integration, and institutional accountability not as secondary concerns but as central pillars of education reform.

Kenya now faces a defining policy choice: to retain, abolish, or radically reform boarding schools. But beyond the debate, one truth remains clear-the system must be urgently re-evaluated and rebuilt to restore safety, discipline, and purpose in equal measure.

The question is no longer whether boarding schools have served Kenya well in the past. The question is whether they are still safe, sustainable, and fit for the future of Kenya’s children today.

The Sh1,000 note is entrenching itself at the heart of Kenya’s cash economy as notes in circulation surged to Sh388.4 billion after the new currency printing tender.

Latest data from the Central Bank of Kenya (CBK) shows the notes in circulation have grown from Sh278.64 billion in August 2024, coinciding with the award of a currency printing tender to a German firm, Giesecke+Devrient Currency Technologies GmbH.

The rise in the notes also emerged as cash circulating in consumers’ pockets or outside banks rose 10.4 percent to Sh323.2 billion in December from Sh292.8 billion in a similar period in 2024 on the back of increased economic activity.

The Sh1, 000 note accounted for about 86.3 percent of the total value of banknotes in circulation in December, squeezing the share of smaller denominations, including Sh50, Sh100, Sh200 and Sh500-all of which saw their shares drop compared to December 2024.

The 86.3 percent for Sh1,000 notes is the highest in over 10 years, climbing from 85.6 percent in the previous year, according to Central Bank of Kenya (CBK) data.

The Sh388.41 billion bank notes in circulation at the end of the year were an increase from Sh360.46 billion in a similar period last year.

The value of notes was in addition to Sh11.52 billion coins, bringing the currency in circulation to Sh399.93 billion at the end of the year.

Currency in circulation refers to all physical paper notes and coins issued by CBK that are available for use in an economy. This differs from cash outside banks, which is the active cash that is actually floating around in the hands of people, businesses, and shops.

‘When growth in currency in circulation is being driven by Sh1,000 notes, it indicates that the value of these notes in circulation has increased faster than that of other denominations,’ said Dominic Murage, acting CEO at Consolidated Bank of Kenya.

Dr Murage, a finance scholar and a lecturer at the University of Nairobi, explained that an increase in cash in circulation driven by Sh1,000 notes could point to the issuance of more high-value notes by the CBK.

‘It could mean more Sh1,000 notes have been issued into circulation or the public is holding a larger share of cash in Sh1,000 notes rather than in Sh500, Sh200, Sh100, etc,’ said Dr Murage.

The trend signals a sustained preference for large-denomination notes among businesses and households, amid rising transaction values in an inflationary environment and the need for convenience in handling bulk payments.

The Sh388.41 billion banknotes in circulation at the end of the year were an increase from Sh360.46 billion in a similar period last year.

The value of notes was in addition to Sh11.52 billion coins, bringing the currency in circulation to Sh399.93 billion at the end of the year.

Lower denomination notes continued to account for a small slice of the cash mix. Notes such as Sh50, Sh100 and Sh200 collectively make up less than 10 percent of the total value, highlighting their limited role in large-value transactions.

In absolute terms, the value of Sh1,000 notes in circulation grew by Sh26.66 billion between December last year and a similar period in 2024, compared with Sh51 million for Sh500 notes and Sh568 million for Sh200 notes. The value of notes of Sh100 and Sh50 in circulation increased by Sh427 million and Sh209 million, respectively.

The Sh500 note, once accounting for over 10 percent share in the value of notes in circulation, has also seen its relative importance wane, with its share dropping to 4.1 percent at the end of December, coming third after the Sh100 note at 4.43 percent.

Kenya’s economy has experienced price increases over time, pushing up the value of everyday transactions and reducing the practicality of smaller notes. Besides inflation, the informal sector, which is still heavily reliant on cash, tends to favour high-denomination notes for convenience, particularly in wholesale trade, transport and real estate-related payments. The high-value notes minimise the physical volume of cash handled in transactions.

The value of Sh1,000 notes in circulation closed last year was 21 times higher than that of the Sh500 notes, compared with 2010 when the gap was 7.1 times. This defies the popular view that lower-denomination notes are in high demand for meeting daily transactions.

There has been a rapid growth in mobile money transactions in the country, with deals of up to Sh100 being free in most of the platforms. This has encouraged low-value deals to be settled through digital platforms such as M-Pesa.

The value of cash handled by mobile money agents, including those linked to banks and telecommunications firms, closed last year at Sh8.236 trillion compared with Sh8.697 trillion in the previous year.

Last year’s value of mobile money deals was nearly three times the Sh2.816 trillion a decade earlier.

However, in many economies, continued expansion of high-value notes usually poses policy considerations for the central bank, particularly around currency management, anti-money laundering oversight and the cost of printing and distributing cash.

Multiple countries, including India, Singapore, Nigeria, and Ghana, have at one point withdrawn high-value banknotes in efforts to flush out illicit wealth, curb corruption and tackle money laundering and currency counterfeiting.

India withdrew its highest value banknotes-500, 1,000 and 2,000-rupee notes- as part of a clampdown on ‘black money’. In 2014, Singapore stopped printing the mammoth $10,000 banknote (equivalent to about Sh1.29 million), one of the world’s largest value banknotes.

Kenya undertook a major currency overhaul in 2019, including the withdrawal of the old Sh1,000 note, in part to curb illicit financial flows and enhance transparency in the financial system.

The CBK’s demonetisation exercise, conducted between June 1 and September 30, 2019, saw 209.66 million of the 217.05 million Sh1,000 notes in circulation returned, rendering 7.39 million pieces worth Sh7.39 billion worthless.

During the demonetisation period, the share of Sh1,000 notes in circulation fell below 80 percent, averaging between 76.36 percent and 79.56 percent, before rebounding above the threshold in December of the same year.

Since then, the new series of the high-value banknotes has gradually entrenched itself, with the Sh1,000 denomination emerging as the backbone of cash circulation.

Incidents of corruption linked to high-value notes have been reported before in the country. For instance, the Sh500 note was once on the spot in Kenya’s 1992 election. The crispy note, which was introduced in 1994, was allegedly circulated by politicians to sway votes their way.

The recent move by the National Transport and Safety Authority (NTSA) to introduce an instant fines management system is a commendable step toward restoring order on Kenya’s roads.

For many years, reckless driving, disregard for traffic rules, and corruption in traffic enforcement have contributed significantly to road accidents.

The adoption of instant fines represents a modern, technology-driven solution that could transform road safety and accountability.

Under the system, motorists who violate traffic regulations are issued penalties immediately through a digital platform rather than being subjected to lengthy court processes. This approach ensures swift enforcement of the law while reducing opportunities for negotiation or bribery between motorists and traffic officers.

When penalties are clear, immediate, and digitally recorded, compliance naturally improves.

Several countries have successfully implemented similar systems, demonstrating that instant penalties can significantly improve road discipline. In the UK, Fixed Penalty Notices allow traffic officers to issue immediate fines for offences such as speeding, illegal parking, or using a mobile phone while driving. The system has streamlined enforcement and reduced the burden on courts.

Closer to home, South Africa has also introduced the Administrative Adjudication of Road Traffic Offences system. It combines instant fines with a points-based penalty framework that penalises repeat offenders. This model promotes long-term behavioural change among drivers by linking violations with escalating consequences.

Kenya’s adoption of a similar approach is, therefore, not an experiment but the adoption of a proven global best practice. By digitising traffic enforcement, the NTSA is aligning the country with international standards while addressing long-standing local challenges.

One of the most significant benefits of instant fines is the potential to reduce corruption.

Traditional enforcement systems often relied heavily on discretion at the roadside, creating opportunities for bribery. A digital platform that records violations, generates fines automatically, and integrates with national payment systems minimises such interactions. Transparency increases, and accountability improves.

For Kenya, this reform may well represent the beginning of a new culture of responsibility behind the wheel.

Furthermore, instant penalties encourage behavioral change among drivers. When motorists know that violations will attract immediate and unavoidable consequences, they are more likely to obey traffic rules.

Over time, this translates into safer roads, fewer accidents, and reduced loss of life.

According to data from the World Health Organization, road traffic injuries remain among the leading causes of death globally, particularly in developing countries. Kenya has not been spared from this challenge. Measures that strengthen enforcement and promote responsible driving are therefore essential.

Ultimately, the success of this initiative will depend on consistent implementation, technological reliability, and transparency. If properly executed, the NTSA’s instant fines system could mark a decisive shift toward safer roads, disciplined drivers, and a fairer enforcement environment.

There is a particular kind of validation that arrives not through applause, but through an invitation.

When the international geothermal community decided that the 2029 World Geothermal Congress, the most prestigious gathering in the global geothermal calendar, held once every five years, would convene in Kenya, it was not simply a scheduling decision. It was a verdict.

The world looked at what this country has built beneath the surface of the Great Rift Valley and said, “You have earned the right to lead this conversation”.

Kenya should sit with that for a moment before rushing to logistics.

The World Geothermal Congress brings together thousands of scientists, engineers, policymakers, investors, and energy professionals from more than 100 countries.

It is the forum where the direction of geothermal energy is debated and decided, where breakthroughs are announced, partnerships forged, and investment flows redirected. Previous hosts include Reykjavik, Bali, Melbourne, and Melbourne again. In 2029, they come to Nairobi. That sentence alone rewrites something fundamental about how Africa is perceived in the global clean energy order.

Kenya ranks seventh in installed geothermal capacity worldwide.

More significantly, it stands first in Africa, not by a narrow margin, but by a wide and growing one. This achievement has been built over decades of deliberate, technically demanding work at Olkaria, in the heart of Hell’s Gate, where steam has been converted into electricity since the early 1980s.

The Kenya Electricity Generating Company has been the engine of that transformation, drilling wells, building plants, training engineers, and steadily expanding its geothermal fleet, which today powers millions of Kenyan homes and businesses.

Olkaria has become something of a geothermal pilgrimage site, a place that government delegations, development finance institutions, regional energy ministries, and international researchers visit not out of curiosity, but out of the desire to replicate what works.

Ethiopia, Djibouti, Tanzania, Rwanda, and others across the Rift Valley have looked eastward to Kenya for a model.

That positioning gives Kenya a profound responsibility as 2029 approaches, one that goes beyond organising a successful conference.

The Congress is a once-in-a-generation opportunity to convert technical credibility into geopolitical influence.

For policymakers and energy regulators across East and Central Africa, it offers a chance to compress years of learning into a single week of high-density exchange with the world’s foremost practitioners.

The Rift Valley system that runs through Kenya extends into Ethiopia, Eritrea, Djibouti, Uganda, Tanzania, and Zambia, a subterranean endowment that could, if properly developed, dramatically alter the energy security calculus of an entire region.

Kenya’s experience navigating everything from geothermal exploration risk to steam field management to community relations around geothermal sites could form the foundation of a regional knowledge-sharing architecture. The 2029 Congress is the ideal moment to plant that institutional seed.

For investors and development finance institutions, the Congress will shine a spotlight on the African geothermal frontier with an intensity that no bilateral meeting or project prospectus can replicate.

The challenge for Kenya and its neighbours has never been a lack of geothermal resource; the Rift is extraordinarily well-endowed, but rather the perception of risk that attaches to early-stage exploration drilling. Hosting WGC 2029 gives Kenya the platform to make the case, with four decades of operational data behind it, that African geothermal is a proven, investable, and scalable asset class.

The conversations that begin in Nairobi’s conference rooms could translate into exploration commitments across the region within years.

For the Kenyan government, the implications extend further still. Energy transition commitments under the Paris Agreement and the African Union’s Agenda 2063 both demand a dramatic scaling of clean baseload power. Geothermal, unlike solar and wind, produces electricity around the clock regardless of weather, a characteristic that makes it foundational, not supplementary, to any serious decarbonisation strategy.

Kenya’s WGC hosting rights arrive at precisely the moment when the global conversation about energy transition is shifting from aspiration to implementation, from nationally determined contributions to nationally delivered outcomes.

The Congress offers Kenya’s leadership a moment to articulate a national geothermal vision that is not merely reactive to international pressure, but genuinely ahead of it.

None of this happens automatically. The period between now and 2029 is not a waiting room; it is a preparation ground.

Kenya must use these years to deepen the scientific and policy thinking it will present to the world, to expand its geothermal capacity so that the story told in Nairobi is one of forward momentum rather than past achievement, and to build the regional convening infrastructure that makes the Congress a catalyst rather than a celebration.

The steam rising from Olkaria has long told a quiet story about what African ingenuity, patience, and technical rigour can produce. In 2029, that story will be told loudly, in one of the world’s most consequential energy forums, to an audience that will carry it home to every geothermal frontier on earth.

Kenya did not stumble into this moment. It was built, well by well, megawatt by megawatt. The task now is to be worthy of it.

Kenya’s monthly domestic exports to the US jumped to a record Sh10.5 billion in March after President Donald Trump renewed the African Growth and Opportunity Act (Agoa), restoring duty-free access and reversing the threat of new tariffs on Kenyan goods.

The rebound followed months of uncertainty after Trump announced tariffs on imports from 180 countries, including a 10 percent duty on Kenyan products that was set to take effect when Agoa expired at the end of September last year.

Latest data from the Kenya National Bureau of Statistics (KNBS) shows exports to the US rose sharply from Sh6.7 billion in February, making March’s value the highest monthly earning ever recorded.

The surge offers fresh relief to exporters after months of uncertainty following the expiry of the Agoa arrangement last September before its renewal in February 2026.

According to Ken Gichinga, chief economist at Mentoria Economics, the March spike largely reflected a release of export orders and shipments that had accumulated during the months when Kenyan firms faced uncertainty over continued duty-free market access.

‘The retroactive Agoa extension removed the uncertainty overhang for many exporters, especially textile and apparel. Exporters could now confidently fulfill larger orders knowing duty-free treatment was back,’ says Mr Gichinga.

‘Also, exporters are likely front-loading shipments ahead of any future policy risks. Agoa’s short extension to December 2026 means uncertainty returns soon.’

Agoa grants eligible African countries duty-free access to the US market for thousands of products, with Kenya remaining among the programme’s biggest beneficiaries, especially in textiles and apparel exports.

The latest renewal has eased fears among exporters and manufacturers who had warned that expiry of the programme would trigger factory closures, job losses and cancelled export contracts across Kenya’s export processing zones.

Kenya’s textile and apparel sector remains the single largest beneficiary of Agoa, supplying American retailers with garments, jeans, uniforms and fashion products manufactured in local export processing zones.

The sector supports hundreds of thousands of jobs, with factories concentrated mainly in Nairobi, Athi River, Mombasa and other export processing zones.

In the months to the September expiry, government officials had intensified lobbying efforts in Washington amid concerns that prolonged uncertainty around the agreement would weaken Kenya’s competitiveness against Asian textile manufacturing countries.

Besides garments, Kenya exports farm produce including coffee, tea, macadamia, fruits, vegetables, cut flowers and processed agricultural products to the US market under the Agoa arrangement.

The US remains one of Kenya’s most important export destinations outside Africa, providing critical foreign exchange earnings at a time the country continues battling a widening trade imbalance.

Trade between Nairobi and Washington has also increasingly become strategically important as Kenya pushes to diversify export markets beyond traditional destinations such as Uganda, Pakistan and the European Union.

The renewed agreement has revived optimism among manufacturers that Kenya could attract fresh investment from global firms seeking lower-cost export bases targeting the American consumer market.

The fresh export momentum comes as Kenya continues separate negotiations with Washington for a broader bilateral trade agreement that officials hope could eventually replace Agoa.

Kenya’s export processing zones have, over the years, become heavily dependent on the US market, making the textile sector particularly vulnerable to changes in Washington’s trade policy direction.

Kenya has been pushing for expanded market access covering additional sectors including agriculture, mining, fisheries and value-added manufacturing as part of efforts to deepen commercial ties with the US.

The discussions had initially started during Trump’s earlier administration before slowing under subsequent policy changes and uncertainty around Washington’s broader trade approach toward African economies.