Category: Business Daily

For more than a decade, exchanging phone numbers has been the first step in almost every Kenyan digital interaction, but WhatsApp is preparing to change this familiar routine fundamentally.

The messaging platform is introducing unique usernames that will eventually allow users to connect without revealing their mobile numbers, marking one of its biggest identity changes since launching in 2009.

The shift promises greater privacy for millions of users but also threatens to reshape how Kenyans network, verify businesses, avoid scams and even build new personal and professional relationships online.

Unlike today, where every WhatsApp account is tied directly to a visible mobile number, users will instead create unique usernames that become their primary public identity on the platform.

The system resembles long-established models used by social media giants X, Instagram and Telegram, where people search, share and connect using usernames instead of personal telephone numbers.

In Kenya, where WhatsApp has become the country’s dominant communication platform, the implications extend far beyond a simple design update or new account setting.

The application now sits at the centre of business transactions, customer support, neighbourhood groups and family communication, as well as political mobilisation and countless informal commercial activities across the country.

Small businesses, particularly, rely on WhatsApp as their primary customer service channel, while freelancers, consultants and entrepreneurs routinely publish their personal phone numbers across social media platforms.

According to Chartered marketer and digital content strategist Nyandia Gachago, the new system will prove particularly attractive for small traders, professionals and freelancers who currently struggle to separate business enquiries from their private communications.

The biggest immediate winner, she says, is likely to be privacy, especially in public WhatsApp groups where thousands of strangers can currently access one another’s telephone numbers.

Job seekers, church members, chama participants and school parents often unknowingly expose their personal contacts simply by joining groups created for legitimate community purposes.

“For ordinary users, hiding 07xx reduces exposure in job groups and chamas where M-Pesa fraud often starts. For SMEs, an @username like @MamaMbogaKE is safer and more professional than printing a personal number on posters. For professionals, it offers a way to network without giving a direct line,” says Gachago.

The timing of the system update comes at a time when Kenya is battling increasingly sophisticated mobile fraud targeting M-Pesa users through unsolicited calls, text messages and impersonation schemes.

Yet the same technology designed to improve privacy may introduce an entirely different set of digital security challenges for unsuspecting users.

Ms Gachago notes that instead of stealing phone numbers, fraudsters may begin creating usernames closely resembling trusted businesses, organisations or public personalities to deceive unsuspecting victims.

‘The move could, however, enable new scams through lookalike handles and impersonation, especially if brands don’t claim their @ early. There’s also the Sept 8, 2026 cutoff for Android 5.0/5.1 phones, which could lock out many low-income users,’ Gachago says.

Today, consumers already struggle to distinguish authentic accounts from fake social media pages, and similar impersonation risks are set to emerge as usernames become WhatsApp’s primary public identity.

“Verification becomes the weak link. Without the phone-number anchor, we may see more handle-based phishing and cloned business accounts,” says Gachago.

Her sentiments are echoed by digital marketing strategist and Brand Moran co-founder Egline Samoei, who adds that brands and public figures are staring at the danger of not just losing their preferred usernames, but also having them used to run scams and damage reputation.

‘Once usernames become available, people will compete for recognizable names. We are already seeing this discussion among Kenyan users on X, where some people are posting about securing names linked to prominent individuals, while others are joking about taking up usernames associated with brands,’ says Ms Samoei.

‘People may start assuming that a familiar-looking username is official. That is dangerous. A scammer does not need to perfectly copy a brand name. They only need to create something close enough to confuse people, especially in a fast-moving chat environment.’

The changes are also set to quietly transform how Kenyans discover new contacts, particularly outside their immediate personal and professional circles.

Today, obtaining someone’s phone number is usually enough to establish a WhatsApp connection, whether through referrals, networking events, business cards or mutual acquaintances.

That simplicity will disappear since users must now know somebody’s exact username before initiating conversations through the platform.

Random discoveries will, therefore, become less common unless usernames are actively shared through websites, social media profiles, business cards, QR codes or other marketing channels.

Professionals seeking new clients and entrepreneurs targeting new customers may increasingly invest in promoting memorable usernames instead of simply advertising telephone numbers.

The transition will particularly affect Kenya’s vibrant informal economy, where quick exchanges of phone numbers often lead directly to business transactions and lasting customer relationships.

For many users, mobile numbers have also served as a trusted verification tool because every registered SIM card carries regulatory identification requirements.

Usernames remove that visible identity layer, forcing people to rely more heavily on digital literacy and platform verification features before trusting unfamiliar accounts.

“Usernames improve privacy and SME safety, but only if paired with digital literacy. Otherwise, Kenya risks trading ‘number-based fraud’ for ‘handle-based fraud,'” says Gachago.

There is an old saying that hard cases make bad law. In Kenya, an equally compelling observation is emerging: sometimes Parliament makes new law because the courts got the old law exactly right. That is precisely what has happened with the Finance Act, 2026.

After years of litigation over the VAT treatment of labour outsourcing, the High Court had finally delivered what appeared to be a definitive answer. Outsourcing companies were required to account for VAT on the full value of their invoices-including payroll costs-not merely on their management fees. The court was not making policy; it was interpreting the law as Parliament had written it.

Then Parliament intervened. Effective July 1, 2026, employee-related costs incurred by outsourcing firms are now deemed to be disbursements made on behalf of clients, removing them from the VAT base. In practical terms, VAT will now apply only to the outsourcing firm’s service fee. For the outsourcing industry, this is an unequivocal victory. For businesses that rely on outsourced labour, it promises lower costs and improved cash flow.

Yet the significance of this amendment extends far beyond VAT. It reminds us that there is an important distinction between legal correctness and policy preference.

The High Court was never asked whether taxing payroll costs was economically desirable. Its task was to determine what the VAT Act required. Looking at the contractual relationships, the Court concluded that outsourcing firms remained the legal employers of their staff. Salaries and statutory deductions were therefore their own business costs, not payments made as agents on behalf of clients. Under the law as it then existed, the conclusion was difficult to fault.

Parliament simply reached a different policy conclusion. Rather than disputing the Court’s reasoning, it changed the legislation itself. It removed the need for businesses to prove that payroll costs qualified as disbursements by declaring that they would be treated as such as a matter of statute. That distinction is more than constitutional theory. It demonstrates how tax policy should evolve.

Courts are guardians of the law. Legislatures are architects of the law as it ought to be. When Parliament believes a judicial interpretation produces an undesirable commercial outcome, its proper response is not to criticise the courts but to amend the legislation. That is exactly what has occurred.

The Finance Act, 2026 therefore represents neither a judicial error nor a legislative correction. It is simply an example of each institution performing its constitutional role.

There is, however, a cautionary lesson for businesses. Many taxpayers assume that once the High Court has spoken, uncertainty disappears. This episode demonstrates otherwise. Judicial certainty can last only until Parliament decides that economic policy requires a different result. That reality reinforces the importance of monitoring legislative developments with the same vigilance as court decisions.

The amendment also offers no comfort for historical disputes. Businesses with pending audits or appeals cannot rely on the new law to extinguish liabilities arising before July 1, 2026.

The principles articulated in the High Court decisions continue to govern earlier periods, meaning many outsourcing firms must now navigate two distinct VAT regimes-one historical and one prospective.

Ultimately, the Finance Act 2026 is about much more than labour outsourcing. It is a reminder that tax policy is shaped through an ongoing dialogue between the judiciary and Parliament. The courts define what the law means. Parliament decides whether the law continues to reflect the country’s economic priorities. This time, the courts answered the legal question correctly. Parliament simply decided it preferred a different economic answer.

Internet service providers in Kenya are eyeing a windfall as rising demand for faster speeds and more broadband pushes data usage to new highs.

New data from the Communications Authority of Kenya (CA) indicates a sharp jump in subscriptions to fourth-generation (4G) and fifth-generation (5G) networks, with 5G users recording the fastest growth.

The two networks are the fastest commercially deployed generation of mobile network technologies yet. Kenya added 722,343 new 5G users in the year to March 2026, pushing the subscriber base on the high-speed network to 1.9 million, up from 1.2 million in March 2025.

Meanwhile, 4G remains the country’s dominant mobile network, with subscriptions rising to 45.9 million from 36.3 million in the same period.

As consumers migrate to faster networks, older technologies continue to decline. The number of 3G users fell to five million from seven million a year earlier, while 2G subscriptions decreased to 9.8 million from 12.7 million.

The shift has largely been driven by the growing adoption of video streaming, with platforms like TikTok, YouTube, Netflix and Instagram pushing users to ditch their 2G and 3G devices.

This comes as analysts project growth in video streaming, online advertising and the adoption of AI among users in Africa over the medium term.

According to the latest report from consulting firm PwC, Kenya, Nigeria and South Africa lead the continent and outperform global averages in digital engagement, a trend expected to persist into the medium term.

‘In 2024 Nigeria led the region with a 11.2 percent growth, followed by Kenya at 7.1 percent and South Africa at 6.2percent,’ PwC says in its latest edition of the Africa Entertainment and Media Outlook.

‘The compound annual growth rate (CAGR) through 2029 is projected to be 7.2 percent for Nigeria, 5.2 percent for Kenya and 3.5 percent for South Africa.’

Smartphones have become the primary gateway to the internet for millions of Kenyans, replacing desktop computers and feature phones whose use is declining.

CA data shows that an overwhelming 98.2 percent of Kenyan users accessed the internet through a smartphone between January and March 2026, up from 97.9 percent in the previous quarter and 97.6 percent in the three months to September 2025.

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

The shift towards high-speed mobile internet has prompted telecom operators to step up investment in network infrastructure.

Safaricom has invested more than Sh500 billion in capital expenditure over the past decade, including Sh55.8 billion last year alone. Of this, Sh38.6 billion went into network infrastructure, alongside investments in new data centres, distribution infrastructure and software applications.

Kenya’s largest telco says the number of smartphones on its network grew by 21.2 percent to 33.16 million.

Airtel Africa invested $884 million (Sh114.3 billion) in capital expenditure during the year ended March 2026, predominantly in network expansion, while adding more than 3,250 infrastructure sites across its 14 African markets.

The company says its 4G network now reaches 75.6 percent of the population across its markets, up 1.2 percentage points from the previous year, while 96.7 percent of data traffic on its network now comes from customers using 4G and 5G smartphones.

Smartphone penetration on Airtel’s network stood at 49.5 percent as of March. Leveraging this growth, Safaricom in 2024 invested in the country’s first smartphone assembly plant in the region, the East Africa Device Assembly Kenya (EADAK).

Over the last two years, Safaricom has put more than Sh192 million into EADAK. The facility assembled 700,000 devices last year. This, coupled with other initiatives such as the Lipa Mdogo Mdogo device financing, has boosted the number of 4G and 5G subscribers on the company’s network.

Telcos have also been venturing into satellite-based connectivity to extend internet coverage into remote areas where cell towers and fibre optic networks are limited and expensive to deploy.

In December 2025, Airtel Africa announced a partnership with US satellite firm SpaceX to introduce Starlink Direct-to-Cell (D2C) satellite connectivity across its African markets.

The technology is designed for areas without reliable internet connectivity, including remote locations and flights and maritime environments.

Satellites equipped with cell tower technology act as space-based mobile towers, connecting directly to phones using existing 4G or 3G protocols. Handsets recognise the satellite as another mobile network, much like they would when roaming. Airtel has begun piloting the service in Kenya.

South Africa’s multinational Absa Group is putting pressure on its Kenyan unit to raise more income from non-lending activities in order to reduce the impact of falling interest rates on earnings.

This was among the higher ratios among Tier One banks, only trailing DTB (77 percent), I and M Group (76.2 percent) and Stanbic Bank Kenya at 76 percent.

Equity Group had the lowest ratio of net interest income to operating income at 59.7 percent, followed by NCBA (60.9 percent), Standard Chartered Kenya (62.7 percent), Co-operative Bank of Kenya (66.4 percent) and KCB Group at 68.6 percent.

Banks have been looking to grow their non-interest income streams through digital channels in order to protect their profits from the impact of volatile interest rates.

Mr Fihla said the group felt the impact of lower interest income in Kenya and Ghana, where central banks aggressively cut interest rates over the past two years in order to improve lending to the private sector and spur economic growth.

‘Reflecting on the net interest income headwinds in the African Region, there is a very high concentration in Ghana and Kenya. These two geographies are overweight, which is why we have been talking about the need to accelerate the diversification of our business,’ the Absa Group boss said.

In the first quarter of the year, Absa Kenya saw its net profit fall by 13.8 percent to Sh5.3 billion.

Its net interest income decreased by 7.9 percent to Sh10.37 billion, while non-funded income was down by five percent to Sh4.28 billion.

The lender cut its loan book by Sh4.5 billion to Sh303.8 billion and increased investments in government securities by Sh30.5 billion to Sh174.5 billion.

The increased exposure to government debt, however, came at a time interest rates in the economy fell in line with the Central Bank of Kenya (CBK) lowering its base lending rate to 8.75 percent from nine percent at the beginning of the year and 13 percent in August 2024.

In the last two years, the rate of the 91-day Treasury Bill has halved from 16.7 percent to 8.2 percent, while bonds are now paying 12 to 14 percent from highs of 18 percent just two years ago.

Read: Guaranteed buyout for Absa Bank Kenya owners capped at 10,000 shares

In February, Mr Fihla visited Kenya where he outlined the lender’s drive to deepen its presence in the retail market, while also exploring opportunities to make acquisitions and expand its footprint in East and Central Africa.

The South African multinational is also tightening its grip on the Kenyan unit by bidding for an additional 16.5 percent stake through an open market tender purchase at the Nairobi Securities Exchange.

The offer, which opened on Tuesday and runs until August 11, will see Absa’s stake in the Kenyan bank rise to 85 percent from 68.5 if fully subscribed.

Absa Group is purchasing the additional 895.9 million shares at a unit price of Sh34.50 each, valuing the deal at Sh30.9 billion.

Online delivery platforms such as Uber, Bolt, Glovo and Little will pay higher licence fees to operate in Kenya after the government introduced a new permit for the fast-growing service segment.

The Communications Authority of Kenya (CA) has introduced a 10-year Courier Hailing Service Provider licence for the segment, separating the licensing requirements for digital delivery platforms from those of traditional courier operators.

Digital delivery service providers will now pay a Sh5,000 licence application fee, an initial licence fee of Sh100,000, and an annual operating fee of Sh100,000 or 0.4 percent of their gross annual turnover, whichever is higher.

The firms will also pay a universal service levy of 0.5 percent of their annual gross turnover, according to the regulator’s new postal and courier market structure.

‘The new licence has a national scope and will be issued to companies offering courier services through digital platforms, whether they operate their own vehicle fleets or outsource motorcycles or trucks from transport operators,’ a CA spokesperson told the Business Daily by phone.

Companies such as Uber, Bolt and Little have in recent years expanded beyond their traditional ride-hailing businesses into parcel delivery amid rising demand for online shopping and food delivery, a market that apps such as Glovo have long specialised in.

Until now, these companies have been operating their delivery businesses under the cheaper National Courier Operator licence, which is also used by matatu saccos such as 2NK and Mololine.

While that licence is also valid for 10 years, it attracts an initial licence fee of Sh30,000, with operators paying an annual operating fee of Sh30,000 or 0.4 percent of their gross annual turnover, whichever is higher.

‘From now on, the digital platforms will be automatically moved to the new licence category, and they will be required to top up the extra (Sh70,000) licence fees and begin paying the new annual operating fees going forward,’ the spokesperson said.

The new rules take effect on July 29, according to a Kenya Gazette notice issued by the CA.

‘The Authority has carried out public consultation on the review of the existing postal and courier market structure for the postal services to respond to growing technological and market trends in the sector,’ the notice says.

The move is part of the State’s efforts to grow revenue from a sector that is expanding rapidly on the back of rising demand for e-commerce deliveries, business logistics and same-day parcel distribution services.

Growth in e-commerce has fuelled demand for parcel movement as more transactions shift from physical stores to online platforms.

Kenya has also witnessed rising consumer spending power and a growing preference for convenience, with more shoppers opting for home and office deliveries.

Most courier-hailing firms have partnered with leading retail chains to deliver groceries and other goods to homes and offices. Uber Eats, for instance, has partnerships with Carrefour, Naivas, Quickmart and Chandarana Foodplus for door-to-door deliveries.

The new permit joins the existing Public Postal Operator, International Courier Operator and National Courier Operator licences issued by the CA to postal and courier services firms.

The 15-year Public Postal Operator licence, issued to the Postal Corporation of Kenya (Posta), is the most expensive, attracting an initial licence fee of Sh1.5 million and an annual operating fee of Sh500,000.

Posta is also required to pay a universal service levy of 0.5 percent of its annual gross turnover.

The International Courier Operator licence, meanwhile, is valid for 10 years and is issued to companies providing inbound and outbound international postal and courier services, such as Wells Fargo and G4S.

It attracts an initial licence fee of Sh100,000 and an annual operating fee of Sh100,000 or 0.4 percent of annual gross turnover, whichever is higher.

The licence also covers national courier services, allowing holders to operate within Kenya.

As of February, Kenya had 347 licensed postal and courier operators.

Kenya produces some of the finest coffee in the world, but beneath the reputation is a sector under pressure. While climate change, competition and price volatility are significant threats, the absence of a skilled generation to drive the sector’s future demands immediate attention.

A 2020 report found that most coffee farmers in Kenya are men aged 60 and above. This means the transfer of critical production skills accumulated over decades is slowing.

Younger Kenyans, faced with limited structured entry points into the coffee value chain and few visible career pathways, are looking elsewhere. The result is an expertise gap that, if unaddressed, will erode the foundations of a sector that earned Kenya Sh43.36 billion between January and September 2025.

The challenge runs deeper than farming. The industry demands competence across an increasingly complex value chain. Evolving customer preferences, particularly the shift towards specialty and single-origin coffee, have raised the bar for quality. Buyers expect consistency in processing, precision in grading and traceability from farm to cup.

Meeting those expectations requires professionals who understand agronomy well enough to improve yields without compromising bean quality, quality controllers who can distinguish between fermentation profiles, processors who know how handling affects what ends up in the cup and marketers who can position Kenyan coffee compellingly in a crowded global market. These skills are not developed by accident.

The talent pipeline is the victim of underinvestment, with technical and vocational training in coffee remaining underfunded and undersubscribed. University courses that cover the science and business of coffee are few. The informal apprenticeship, where skills are passed from experienced farmers to young people is weakening as farming communities age and rural-urban migration accelerates.

Meanwhile, the global specialty coffee market continues to grow, and competition origins are investing aggressively in training, processing infrastructure and marketing. Kenya risks being outpaced on the depth of human capital needed to sustain and translate the quality of our coffee into a lasting commercial advantage.

This is the gap initiatives like the Java House Foundation’s NexGen Coffee Leaders Scholarship are designed to close. The programme offers 35 young Kenyans, including women who have historically been excluded from the sector, a fully funded chance to study coffee technology, quality management and agronomy at Dedan Kimathi University’s Coffee Technology Centre.

The scholars receive a monthly stipend, lab access, mentorship and entry into an alumni network designed to connect graduates with employment and entrepreneurship.

Beyond providing the actual training, the value of the programme lies in the signal it sends. It demonstrates that coffee players can take meaningful responsibility for building the industry’s human capital. It also illustrates that investment in youth is a commercial and strategic imperative.

The economic argument is also compelling. Value addition remains Kenya’s most underdeveloped coffee opportunity. Most of our coffee is exported as raw or semi-processed, leaving the higher-margin work of roasting, blending and branding to importing countries. Capturing more of that value locally needs the kind of processing, quality and marketing expertise that structured training can produce. Every trained professional who stays in the sector and works in a roastery, an export house or a cooperative is a step towards a more lucrative domestic industry.

Kenya’s reputation was built by farmers, processors and traders who understood their craft. Sustaining this success will require a new generation that understands the craft, the science, the business and the global market. That generation exists but needs pathways, investment and institutions willing to back it.

The survival of the local coffee will be decided by labs, demo farms and careers of young Kenyans who are given the knowledge and chance to carry the industry forward. The question is if the sector will invest in them before the expertise gap becomes a crisis from which it cannot recover.

The fee payable to external fund managers for managing assets under the planned Sovereign Wealth Fund (SWF) has been capped at two percent, in a bid to ensure prudent utilisation of funds.

The National Assembly’s Finance and National Planning committee has also amended the Third Schedule of the Sovereign Wealth Fund Bill, 2026 to include a requirement for the disclosure of details of all fees paid to investment fund managers and any other service providers to safeguard the Fund.

‘The annual management fee payable to an investment fund manager shall not exceed two percent of the investment in the qualifying instrument and shall be specified in the instrument of appointment,’ Kuria Kimani, who chairs the committee, said while moving amendments to the Bill.

‘The amendment seeks to provide a capping of the amount paid to an investment fund manager to two percent of the investment in the qualifying instrument. This is to ensure that there is prudent utilisation of funds.’

Mr Kimani proposed the changes during the scrutiny of the Bill in the Committee of the Whole House where MPs scrutinise the proposed law clause by clause and make changes.

The Bill, as drafted by the government, had failed to prescribe the annual management fee payable to investment fund managers.

‘The annual management fee payable to investment fund managers shall be specified in the instrument of appointment,’ the original version of the Bill states.

MPs on July 2, 2026, approved the Sovereign Wealth Fund Bill, 2026 with amendments and now awaits assent by President William Ruto to become law.

The Bill establishes three components: the Stabilisation Fund to cushion against micro-economic shocks, the Strategic Infrastructure Investment Fund to fund national infrastructure development projects, and the Future Generations Fund to preserve wealth for future generations.

Mr Kimani said the committee had increased penalties for individuals who misappropriate any funds or assets from the Fund, or assist or cause any person to misappropriate the funds or assets from two to three years in jail or to a fine not exceeding Sh10 million. The Bill had set Sh5 million as the maximum fine.

‘The amendment aligns the penalty provision to move away from mandatory minimum sentencing while at the same time enhancing the penalty in order to safeguard the Fund and ensure compliance with the Act,’ Mr Kimani, who is also the MP for Molo, said.

The Third Schedule of the Bill sets out responsibilities of an investment fund manager, which include managing assets and other resources of the Fund.

‘The responsibilities of an investment fund manager, appointed by and acting on behalf of the board under the terms of the service level agreement, shall include but shall not be limited to investing assets and other resources of the Fund in accordance with this Act, and the operational and investment guidelines developed under this Act,’ the Bill states.

‘Maintaining records and documentary support for transactions relating to the management of the Fund in accordance with internationally accepted accounting standards.’

The Bill also requires an investment fund manager to submit an annual report of the investment management to the SWF Board not later than two months after the end of the financial year.

It also requires that the reports be accompanied by a certificate signed by the internal auditors of the investment fund manager and a certified investment report on the performance of the Fund.

So far, the Sovereign Wealth Fund will have nearly Sh200 billion that Kenya earned from the mineral sector in the form of royalties, prospecting licences, and acreage leases.

To protect the fund, the Bill restricts the types of investments it can make, barring it from speculative financial instruments such as derivatives, private equity, or commodities trading, and focusing instead on relatively stable investment assets.

It also prohibits the use of the fund to provide loans, guarantees, or credit to government entities, a move aimed at preventing political misuse of the savings.

Any official who makes such investment decisions will be expected to pay back the money if it leads to losses.

The Bill further states that no cash will be withdrawn from the Sovereign Wealth Fund within three months of a General Election, the government has said in a proposed law aimed at shielding the funds from misuse by political patronage.

As a safeguard, the proposed law in the Sovereign Wealth Fund Bill, 2026, requires that cash held in the endowment at least three months before a General Election be certified by its board of management, with a report submitted to the National Treasury and forwarded to the Auditor-General and Parliament for verification.

The standard gauge railway (SGR) line is set be extended into the Nairobi central business district (CBD), closing a crucial last-mile gap that left thousands of commuters disadvantaged by a 20-kilometre travel to and from the current passenger terminal in Syokimau.

The Kenya Railways Corporation (KRC) is hiring a contractor to develop the 15-kilometre line between the Syokimau SGR passenger terminus and Nairobi Central station, which is currently served only by the aged metre-gauge railway (MGR).

The extension will allow Kenyans travelling on the SGR train to Mombasa – and other destinations in future – to board trains in the CBD instead of travelling to Syokimau as has been the case.

The absence of the last mile between the SGR passenger terminus and the CBD has often forced passengers to transfer to the MGR train, matatus or taxis to reach the city centre for final connection to different destinations.

‘The proposed project is strategically important because it closes the last-mile rail gap between the Nairobi SGR passenger terminal at Syokimau and the Nairobi central business district,’ KRC said in a disclosure.

‘This ensures that there is a direct SGR passenger access to the central railway precinct and supporting the wider Nairobi Railway City programme.’

A blueprint seen by the Business Daily shows that the planned project will involve the construction of the 15km railway line, and new separate passenger platforms at the Imara Daima, Makadara, and Nairobi CBD train stations. Passenger overpasses will also be constructed to connect the new platforms and the old MGR platforms.

Currently, the MGR link between Syokimau and CBD passes through Embakasi, Imara Daima, Donholm, and Makadara. The new SGR line is expected to follow the same route, but will have stations only in Makadara and Imara Daima.

A 4km section of the MGR that is prone to disruptions due to flooding will also be upgraded as part of the project, with the installation of up to 10 culverts and the replacement of the steel MGR sleepers to concrete ones.

This is expected to ‘improve the reliability and availability of existing commuter rail services by reducing flood-related disruptions, improving drainage performance, and protecting the track formation,’ KRC said.

The contractor will also be expected to design and construct a bridge over the Mukuru River, and to reconstruct the Likoni bridge.

The project is meant to fit into the planned Nairobi Railway City, a Sh28 billion project by the State-owned corporation meant to transform 13 acres of underutilised land into a modern transit hub.

Currently, the Nairobi Railway City is being designed, and the tender for construction is set to be awarded soon. It is receiving support from the United Kingdom’s Foreign, Commonwealth, and Development Office.

The government has also begun the extension of the railway from Naivasha to Malaba, connecting several cities and towns in the country to Nairobi.

The SGR Phase 2B project will involve the construction of a 263.7-kilometre line to begin at the terminus of the Nairobi-Naivasha SGR and pass through Narok, Bomet, Sotik, Sondu, and Ahero before terminating in Kisumu.

A plan by KRC shows that the project will include modifications of the Kisumu port, including an 8km branch line. It will also entail the construction of two multi-purpose berths (and associated facilities) and workboat berths to accommodate the safe lying of ships.

It comes amid growing use of railway transport to travel in the country, with both SGR and MGR train options gathering pace among travellers over the last few years, as rising fuel prices increase the cost of road transport.

Last year, the number of passengers ferried on SGR rose by 11 percent to 2.7 million from 2.4 million in 2024, earning KRC an extra Sh700 million in revenues.

The MGR, on the other hand, has seen a gradual drop in usage across the country, with the total number of passengers dropping by almost half over the last four years.

Dollar investors in blue chip stocks at the Nairobi Securities Exchange (NSE) earned a return of 18.8 percent in the first half of the year, nearly matching local currency returns as a stable shilling protected their portfolios from currency losses.

Data from the Morgan Stanley Capital International (MSCI) emerging and frontier market indices shows that the NSE dollar return accelerated in the second quarter of the year after share prices of Safaricom and large banks rose by double-digit margins of between 10 and 88 percent.

The MSCI tracks the performance of selected large and medium sized companies in 10 African frontier and emerging markets, as part of its global series of indices that are closely watched by foreign investors.

In quarter one, the NSE’s index had gone up by 0.9 percent, following a dip in share prices in March amid a selloff caused by the jitters over the US-Israel war on Iran.

The conflict hit financial markets hard, triggering an equities sell-off as investors turned to holding dollars as a hedge, fearful of the negative impact of higher inflation due to elevated fuel and food prices.

In shilling terms, the overall half-year return of the NSE -as measured by market capitalisation-was up 27.8 percent, or Sh817.2 billion, to reach a record high of Sh3.76 trillion as at June 30.

However, this was boosted by the listing of Kenya Pipeline Company (KPC) on March 11 and Family Bank Limited on June 23, together adding Sh212.16 billion in new wealth to the market.

Excluding the new listings, the NSE would have ended the half year period with a gain of 20.5 percent or Sh605 billion, which would closely match the dollar returns for the firms tracked by the MSCI.

Kenya’s NSE is represented by 17 companies on the MSCI frontier and small caps indices that are selected based on a number of metrics, including liquidity and financial stability, giving them the exposure to the foreign investors in what helps boost their price discovery.

Safaricom, Equity Group, East African Breweries Plc (EABL), KCB Group, Co-operative Bank of Kenya and Standard Chartered Bank Kenya are listed on the MSCI frontier markets index, as at the most recent review of May 2026.

BAT Kenya, KenGen, Kenya Re, Kenya Power, DTB Group, Carbacid Investments, Bamburi Cement, Jubilee Holdings, CIC Insurance Group, Centum Investment Company and HFCB Group are on the MSCI frontier markets small cap index.

Other countries included on the frontier markets indices are Zimbabwe, Tunisia, Morocco, Nigeria, Senegal, Mauritius and Côte d’Ivoire.

South Africa, which has the largest and most liquid stock market in Africa, and Egypt, are classified as emerging markets by the MSCI. In the half year period, Nigeria and Zimbabwe had the top performing markets on the continent with index gains of 56.1 percent and 48 percent in dollar terms. They were boosted by price gains on banking and commodities stocks respectively, and stronger currencies that handed foreigners an exchange gain on their portfolios.

Tunisia, South Africa and Côte d’Ivoire also outperformed the NSE with respective gains of 42.3 percent, 23.5 percent and 21.3 percent.

Meanwhile, Senegal trailed with a gain of 6.2 percent, as Egypt, Morocco and Mauritius recorded negative returns of 12.7 percent, 7.1 percent and 3.5 percent on weakening currencies.

An appreciating local currency gives foreign investors an exchange gain when valuing their returns, given that they get more dollars upon conversion when exiting compared to their entry cost. In case of a depreciating local currency, they would get fewer dollars for repatriation.

This exchange rate is therefore a key consideration for foreign investors, given that it can either boost or diminish their true returns when compared to local currency returns.

Local pension funds have participated in Kuramo Capital Management’s latest Sh64.5 billion ($500 million) fundraiser, underlining the private equity firm’s diversification of sources of capital away from the US market.

Kuramo told Business Daily that Kenyan pension funds invested in the latest fundraising though it declined to say how much was raised from the domestic market.

The latest fund raiser marks the first local/regional mobilisation and includes inflows from Nigeria’s pension funds, African Development Bank’s Investment in Digital and Creative Enterprises (iDICE) and Lagos-headquartered Bank of Industry.

Kuramo noted that 60 percent of the proceeds generated would be invested within the East African region.

The firm says the fresh capital will help extend the life of existing portfolios including the Wholesale Investment Impact Fund (WIIF), Moremi Capital Management and Kuramo’s Gender-Lens initiative platform which supports women-led businesses.

Kuramo deploys funding through three channels; anchoring funds, direct and impact investments.

The pivot to raise funding from the continent has been forced on Kuramo by liquidity challenges faced by US endowments and foundations, caused by factors including President Donald Trump budget cuts to the mostly research institutions.

Kuramo now sees its next evolution as a firm unlocking African capital for continental opportunities.

‘Kuramo is appreciative of the support provided over the last 15 years by our western endowments and foundation investors as their support enabled the transformation of the African private equity landscape,” said Wale Adeosun, the founder and chief executive officer of Kuramo Capital Management.”

“Kuramo is very excited about its Investment Platform, and progress in mobilizing African capital as it helps drive faster economic growth toward the sustainable development of Africa.”

Since its founding in 2010, Kuramo has catalysed over Sh452.5 billion ($3.5 billion) to Africa private equity firms and businesses, supported over 20 fund managers, anchored over 15 funds and invested in over 200 companies both directly and indirectly.

Kuramo holds equity stakes in local firms and across different sectors including GenAfrica Asset Managers, Platcorp Holdings Limited-the holding company of Platinum and Momentum Credit, TransCentury Plc and investment bank Sterling Capital Limited.

The firm’s gender lens initiative nurtures women-led funds including capacity building, providing working capital and supporting operations.

Shaka Kariuki, Kuramo’s co-chief executive officer and chief investment officer, who has previously spoken of a shift by local capital to support venture funds and private equity, says the pivot by the firm to raise funds domestically will help local pension funds in diversifying their portfolios.

‘We believe that our experience, track record and local networks will strengthen our effort toward mutually beneficial outcomes with our strategic partners and promote impactful investments in the region,’ he said.

The Sh2.8 trillion retirement benefits industry had only Sh299 billion in assets invested in private equity or a 1.07 percent share as of December 2025, against a higher regulatory cap of 10 percent, mirroring limited interest in alternative asset classes by local pension funds as per data from the Retirement Benefits Authority (RBA).

The funds instead have the bulk of their assets invested in government securities at 52.18 percent or Sh1.465 trillion.

Other top asset classes for the pension funds in the period were quoted equities, immovable property/real estate, guaranteed funds and listed corporate bonds.