Category: Business Daily

Medical insurance claims have nearly doubled over the past five years to Sh52.61 billion, driven by rising healthcare costs and increased utilisation, forcing insurers to raise premiums to remain viable.

Latest industry data shows claims rose by 97.7 percent from Sh26.69 billion in 2021 to Sh52.61 billion last year, underlining mounting pressure on underwriters as more Kenyans seek treatment and the cost of care escalates.

The surge in claims has been accompanied by a steady increase in premiums, which grew by 81.1 percent from Sh51.42 billion in 2021 to Sh93.28 billion last year. This reflects insurers’ efforts to price in higher risks and sustain their medical books amid shrinking margins.

Medical insurance remains the largest segment in the general insurance business, accounting for 41 percent of Sh227.16 billion total premiums last year. The outsized share of medical insurance highlights its central role in the sector’s growth as well as its vulnerability to cost pressures.

Rising medical inflation has compounded the challenge. Kenya’s healthcare costs are projected to grow by 13.5 percent in this year, up from 9.8 percent in 2023, according to Aon medical trends report.

At 13.5 percent, the country ranks among African markets with the fastest-rising medical costs, trailing only high-inflation economies such as Nigeria (43 percent), Ethiopia (42 percent), Malawi (27.1 percent) and Zimbabwe (22.5 percent).

The increase in claims has also been linked to higher uptake of insurance covers, particularly employer-sponsored schemes, as well as expanded benefits that encourage greater utilisation of healthcare services.

Disclosures by listed firms show billions of shillings spent annually on staff medical cover, with KCB Group having spent Sh2.37 billion last year as that of Co-operative Bank of Kenya and NCBA Group came in at Sh962.12 million and Sh727.76 million, respectively.

To manage the cost spiral, employers are adopting measures such as higher deductibles, co-payments and tighter claims management as well as reviewing benefit structures, according to Aon.

‘To mitigate rising costs and the risks they bring, employers are focusing primarily on hard negotiations with insurance carriers and other vendors,’ said Aon.

Medical insurance has a higher market concentration in Kenya. The top five medical underwriters, led by Jubilee Health, AAR and Old Mutual, control over 63 percent of the market, giving them significant influence over pricing and product structures.

The trend of rising claims is unlikely to ease in the near term, as hospitals continue to adjust prices upward and patients increasingly seek specialised care.

The overlapping mandates between county and national governments are back in the spotlight amid a fresh row over proposed tobacco control laws, adding to a growing list of disputes over the cost of doing business.

Overlapping roles in the Fourth Schedule of the Constitution have, over the years, triggered conflicts between the national government and devolved units in key areas such as public health management, business licensing and revenue collection, public land, and physical planning.

For instance, farmers in counties including Kiambu are locked in court battles over what they term ‘double taxation’ by the two levels of government on farm produce such as tea, coffee and milk. There have also been frequent clashes between county and national governments over the procurement of medical equipment, management of health workers and the development of key infrastructure such as roads.

Turf wars

A fresh conflict is now simmering over regulation of the multi-billion-shilling tobacco industry, with the Tobacco Control (Amendment) Bill 2024 proposing mandatory licensing by county governments for all dealers in tobacco and nicotine products, including manufacturers, importers, distributors and retailers.

Manufacturers and traders have opposed the proposal, terming it duplicative of the role already played by the Ministry of Health and warning that it will increase the cost of doing business while fuelling illicit trade.

‘These proposals run against the Government of Kenya’s commitment to facilitate the ease of doing business, and risk creating significant disruption for compliant enterprises. This provision introduces unnecessary regulatory duplication, higher compliance costs, and administrative inefficiencies,’ the Kenya Association of Manufacturers (KAM) said in its submission to the Senate on the Tobacco Control (Amendment) Bill 2024.

‘Further, layering multiple licensing requirements at both national and county levels is likely to result in inconsistent enforcement, regulatory uncertainty and barriers to formal trade, while inadvertently incentivising illicit trade growth, which is already estimated to account for nearly half of the market,’ it added, urging that the provision be deleted from the Bill.

The Kenya National Chamber of Commerce and Industry (KNCCI) also criticised the additional regulations, terming them counterproductive.

‘The Chamber’s position is that regulating the same commercial activity through parallel approval regimes risks duplication, increased compliance costs and fragmented enforcement across multiple authorities,’ it said.

‘From a business continuity perspective, duplicative licensing requirements create uncertainty for traders who are already subject to a variety of obligations under county trade licensing regimes, national standards, tax administration rules and sector-specific controls,’ KNCCI chief executive Kenneth Mutahi said in submissions to the Senate.

Constitutional grey areas

The rising regulatory conflicts are partly tied to provisions in the Constitution. The Fourth Schedule, which outlines the distribution of functions between the national and county governments, grants devolved units responsibility for trade development and regulation, including markets, trade licences (excluding regulation of professions), fair trading practices, local tourism and cooperative societies.

The Fourth Schedule also grants the national government regulatory powers over critical areas such as health policy, placing the tobacco industry at the centre of a dispute over overlapping mandates between the two levels of government.

‘There are grey areas in law on the roles of the two levels of government that need to be addressed. Many economic sectors have raised concerns about being caught up in overlapping regulations,’ said John Otieno, a business analyst.

A regulatory audit report released by KAM in March 2026 revealed a heavy burden on businesses arising from duplicative actions by national and county governments.

‘The cumulative regulatory burden on manufacturers has grown significantly over time. In some manufacturing sectors, businesses must obtain more than 50 licences, permits, fees and charges from multiple regulatory agencies at both national and county levels,’ KAM chief executive Tobias Alando said during the launch of the report on March 10, 2026.

‘For example, the proposed additional licensing requirements will impose additional costs and complexity, which is burdensome, particularly for some small traders whose livelihoods depend on the sector,’ BAT Kenya managing director Crispin Ochola said in a submission to the Senate.

Regulatory clash

Beyond the overlapping mandates of national and county governments, industry players also pointed to conflicting regulations within the national framework, particularly proposals in the Tobacco Control Bill 2024 aimed at tackling plastic pollution.

The Bill proposes a ban on the use of single-use plastics.

‘While the objective of addressing plastic pollution is acknowledged and supported, the proposed approach raises significant concerns from a regulatory coherence and policy alignment perspective,’ KAM said.

Manufacturers noted that Kenya already has a comprehensive environmental governance framework under the Environmental Management and Co-ordination Act (EMCA), which provides an economy-wide mechanism for managing plastic waste and packaging materials.

‘This framework is operationalised through binding subsidiary legislation, including the Extended Producer Responsibility (EPR) Regulations, 2021, and the Management and Control of Plastic Packaging Materials Regulations, 2024. These regulations apply uniformly across all sectors and impose clear obligations on producers, importers and retailers,’ the lobby said.

Manufacturers added that the current framework includes mandatory registration with the National Environment Management Authority (Nema), financing of collection and recycling schemes, licensing of plastic packaging materials, traceability requirements and the progressive redesign of packaging to support circular economy outcomes.

KAM argued that introducing a sector-specific statutory ban within tobacco legislation risks creating regulatory fragmentation.

‘It would effectively subordinate EMCA’s coordinating role by singling out one sector for an outright prohibition, while other sectors remain governed by harmonised, proportionate controls under existing environmental law,’ it said.

‘Such an outcome undermines policy consistency and introduces unnecessary legal misalignment. Further, the proposed ban does not sufficiently take into account ongoing regulatory implementation processes being led by Nema. Nema has consistently communicated that enforcement will focus on EPR compliance, licensing of plastic packaging, and operational take-back schemes,’ the lobby added.

KAM warned that the proposed ban would disrupt the agreed compliance pathway and create uncertainty for manufacturers, distributors and retailers.

Industry pushback

As part of its opposition to the Bill, BAT Kenya is also seeking a review of the proposed prohibition of additives and flavours, arguing that it would fuel illicit trade.

The company said flavour bans have failed in several European countries, including the Netherlands, Estonia and Denmark, and have instead fuelled black-market activity and increased access by underage consumers.

‘If a regulation in effect for 12 years has been found ineffective, overly complex and unenforceable by 27 European jurisdictions, it is extremely ill-advised to pursue a similar failed approach in Kenyan regulation,’ BAT Kenya said.

‘Excessively restricting the range of available flavours, through restriction of ingredients or outright banning additives which result in a characterising flavour, could also push smokeless product consumers into an illegal, unregulated market, encourage potentially dangerous home-mixing of flavours or motivate them to return to smoking,’ Mr Ochola said.

For nearly 15 years, Stella Auka lived with a condition she struggled to name but could never ignore: chronic constipation that slowly eroded her well-being. Doctors advised more water and more vegetables. She tried, but nothing changed.

Looking back, Stella traces part of the problem to a shift in diet that once felt aspirational. Raised in a household where vegetables were the norm and meat was a rare Christmas privilege, adulthood brought a different idea of ‘better living’: meat almost daily, full-fat milk tea brewed the Kenyan way, and vegetables cooked in milk for richness.

It was indulgence that felt deserved. But her body disagreed.

At 52, she made a decision that would reset her life. She eliminated animal protein from her diet and began each morning with water and fruit. Within weeks, her digestion improved. The constipation that had defined years of discomfort began to ease.

‘I didn’t understand what my body was telling me until I changed everything,’ she reflects.

What seemed like a personal health correction soon became something larger.

During this same period of dietary change and recovery, Stella began roasting peanuts for colleagues at the hotel where she worked to earn extra income. She started small, with just Sh1,000 in capital.

Within days, she had recovered her initial investment in profit. It was not yet a business. But it was a signal.

Just as the idea began to take shape, life shifted again.

In 2016, Stella was diagnosed with non-receptive breast cancer.

‘I died before achieving my vision,’ she says. ‘Not literally, but cancer almost took everything before I acted on what I knew I was meant to do.’

Treatment followed-18 months of uncertainty, hospital visits, and physical depletion. Yet even in that period, the idea of food as both livelihood and healing stayed with her.

When she regained her strength in 2017, she made a decision that would define her next chapter. She retired early, formalised her idea, and registered Broad Range Enterprise Ltd with her partner, Edmond Kwena.

She began again from her veranda with a jiko, which became her stove. A candle replaced industrial sealing equipment. Each batch of roasted groundnuts was packaged by hand and sold the following day. Everything sold. She repeated the process.

The business was simple in its early days, but demand was consistent.

Today, Broad Range employs seven staff and supplies hospitals, schools and wellness centres. Production has scaled significantly, with modern machinery now allowing the company to process up to 600 kilogrammes of nuts per month.

But Stella insists the growth has not been driven by ambition alone. It has been shaped by customer demand and necessity.

New products emerged organically: sesame butter for customers managing blood sugar, almond butter tailored to individual preferences, and custom flour blends designed for specific dietary needs.

At the centre of the business is cashew nut butter, a product Stella describes as both practical and symbolic. Broken cashew pieces once considered low-value by the industry, are now transformed into a premium product with margins of up to 40 percent.

The nuts are sourced directly from women’s cooperatives along the Kenyan coast. When supply runs low, she turns to processors, but she is deliberate about quality.

‘When someone eats our food and then eats something else, they can tell the difference,’ she says. ‘They come back.’

But the path from veranda operation to established enterprise has not been smooth.

In mid-2017, the introduction of Kenya’s plastic ban forced immediate changes. Stella had to borrow money to switch to biodegradable packaging. The cost was punishing.

‘The interest rates were so high, about six percent monthly,’ she recalls. ‘I spent nearly 18 months of profit just servicing the loan.’

Cash flow pressures intensified when supermarkets entered the picture. Their 90-day payment cycles were incompatible with a young business that relied on constant reinvestment.

Rather than collapse under the strain, Stella shifted strategy. She stepped away from heavy supermarket dependence and pursued alternative distribution channels that allowed faster returns.

What sustained the business through these early shocks was not scale, but resilience.

There were moments, she says, when survival depended on trust and teamwork. Even during a family health crisis, operations continued. Orders were fulfilled. The business stayed afloat.

‘Whenever people think I may have changed or disappeared, when they come back, I am still here doing the same thing,’ she says.

The numbers reflect that consistency. Cashew butter revenue has grown by more than 100 percent over three years, reaching about Sh100,000 between 2023 and 2025, driven entirely by word-of-mouth rather than advertising.

Beyond its own growth, Broad Range has begun to influence others. The company has trained the All About Nut Women Group in Mombasa, which she says now generates about Sh40,000 per month and is approaching break-even within eight months.

Export plans are now underway, with Stella working with Brand Kenya to meet certification requirements. The process is slow and costly, but she is determined.

Her philosophy remains unchanged: food should be clean, simple, and free from unnecessary additives. I

‘Most people who don’t eat healthily can’t afford to,’ she says. ‘But vegetables are the healthiest. You don’t have to eat expensive food.’

For Stella, the measure of success is not just financial. It is physical, practical, and deeply personal.

Fruit remains her most expensive grocery item. Hospital visits, she notes, are her cheapest-because she rarely needs them.

Parliament has ordered a special audit of the Public Service Internship Programme (PSIP), citing persistent payroll anomalies and delayed stipend payments that have dogged one of the government’s flagship youth employment strategies.

The National Assembly Budget and Appropriations Committee wants the Auditor-General Nancy Gathungu to complete the review by December 30, 2026 and cover the programme’s financial and payroll records since inception.

‘This audit is intended to address persistent challenges experienced since the programme’s inception, including payroll inconsistencies, delays in stipend payments, and weaknesses in financial management and accountability systems,’ said the parliamentary committee in a report.

‘Additionally, the funds allocated to the PSIP programme should only be applied for the payment of stipends and not for operational expenses.’

Introduced in 2019, the PSIP seeks to equip graduates with practical workplace experience and improve employability in an economy struggling to create sufficient formal jobs.

The programme places graduates in ministries, departments and agencies across government institutions for a one-year internship at the standard stipend rate of Sh25,000 per month per intern.

Under the deal interns are drawn from all regions and deployed to national government establishments across the country to develop professional skills required in the public sector and the wider labour market.

Graduates recruited under the programme are drawn from a wide range of disciplines including engineering, business, education, humanities, agriculture and social sciences.

The PSIP is funded by the national government with the money mainly used to pay interns’ monthly stipends during the one-year placement period.

Over the years, the programme has expanded into one of the largest graduate placement initiatives run by the government, coinciding with rising youth unemployment and mounting pressure on the State to create opportunities for thousands of graduates entering the labour market annually.

The internship scheme has increasingly become an alternative route into government service as fiscal pressures limit recruitment on permanent and pensionable terms.

Complaints over delayed stipend payments have, however, frequently emerged from beneficiaries, raising concerns about the programme’s administration and operational efficiency.

The latest intervention by Parliament indicates that such concerns have persisted despite repeated allocations from the Exchequer to support the initiative.

The committee’s recommendations come as scrutiny intensifies on the effectiveness of public spending programmes targeting youth employment and skills development.

They also come at a time when public agencies are under pressure to demonstrate prudent use of taxpayer resources amid growing fiscal constraints.

Human rights advocates want Parliament to reject the Treasury’s proposal to exempt capital gains tax-charged at 15 percent on net gains-on transfers of property to real estate investment trusts (REITs).

REITs are pooled funds investing in property development or ownership, allowing investors partial ownership in the form of units (shares), which they can trade.

The Kenya Human Rights Commission (KHRC) told the National Assembly’s Finance and National Planning Committee that the proposed exemption of capital gains tax on transfer of property to REITs raises significant concerns relating to revenue protection, tax equity, and avoidance risks within the tax framework.

The Treasury has proposed in the Finance Bill 2026 to exempt from capital gains tax any capital gains realised on the transfer of property to a REIT that is registered with the Kenya Revenue Authority.

The Bill also proposes to exempt from stamp duty any instrument that transfers a beneficial interest in property to a REIT authorised under the Capital Markets Act. The Treasury is proposing to amend the First Schedule to the Income Tax Act, which provides for categories of income that are exempt from income tax.

‘REITs already benefit from substantial tax advantages under existing law, including exemptions from income tax at entry level, deemed tax-paid treatment on investor distributions, and value-added tax exemption on asset transfers into REITs,’ John Kottowa from the KHRC said.

‘The proposed amendment would therefore create an almost complete tax-free structure for high-value property transactions conducted through REITs, allowing substantial gains to escape capital gains tax, income tax, and VAT simultaneously.’

He told the committee, chaired by Molo MP Kuria Kimani, that the proposals also create a substantial risk of structured tax avoidance through the use of REITs as temporary conduits for property sales to eliminate otherwise payable capital gains tax liabilities.

While making submissions during the public participation exercise on the Finance Bill, 2026 organised for Nairobi County residents, Mr Kottowa said the proposed blanket exemption is disproportionate and risks undermining the principles of progressive taxation and equitable revenue collection.

The Treasury’s proposal, if enacted into law, will further expand tax incentives for Reits which are seen as a means of allowing small investors to access the capital-intensive real estate sector.

Most commercial properties are owned by rich individuals and institutions such as pension funds and investment firms.

REITS are exempt from the 30 percent income tax that normal companies pay. This means that shareholders (unitholders) only pay withholding tax -at five percent for residents- on the distributions they receive from the investment vehicles. Subsidiaries that are fully owned by a REIT are also exempt from income tax.

Diversified trading firm Car and General (C and G) is set to scrap its dormant employee share ownership plan (Esop) as it considers an alternative remuneration scheme to motivate its staff.

The Nairobi Securities Exchange-listed firm formalised the share ownership plan in 2014 but has not implemented it, with the company now set to terminate it at its annual general meeting on June 23, 2026.

‘We are terminating the Esop for two reasons: it has never been implemented and we also believe we have better alternative incentive schemes for our employees,’ said Vijay Gidoomal, the chief executive at C and G.

Mr Gidoomal added that the company is yet to determine the specifics of an alternative remuneration scheme, noting that there are diverse benefits options that can be packaged and offered to staff.

The company’s employees are currently paid exclusively in cash as salaries and retirement benefits. C and G incurred total staff costs of Sh1.5 billion in the year ended December 2025, up from Sh1.42 billion the year before.

The higher payroll costs were driven partly by a growth in the workforce to 1,280 from 1,189.

C and G has diversified operations including trade, poultry, manufacturing and real estate, indicating that it would have had a more difficult task in designing its Esop performance and allocation rules compared to a less complex business.

Share-based compensation schemes are seen as aligning the interest of workers with those of shareholders. By owning stock in their company, employees are exposed to the upside and downside of their performance and decisions.

Most NSE-listed firms, however, pay their employees including senior managers in cash (salaries and bonuses), simplifying their payrolls and protecting their shareholders from potential dilution.

A few others give shares to their top executives for free or at a minimal cost on top of their salaries and bonuses. Safaricom and Equity Group are among the other firms with stock-based compensation plans.

Equity’s shareholders in 2024 voted to issue 198.6 million shares to its Esop where employees will be able to buy stocks at discounted price of 50 cents apiece.

NCBA Group, which has not implemented its Esop for more than seven years, says it will soon start allocating shares to qualifying employees.

Kenya Airways had also not issued shares to qualifying staff for more than seven years under its Esop by the end of 2024.

Esops are usually designed to attract and retain employees, with the workers usually able to access the shares after several years on a rolling basis.

Most of the shares tend to be taken up by top executives who are seen as the most critical talent in driving strategy and culture, especially in competitive sectors such as finance.

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.

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.