Category: Business Daily

It is now clear that the Iran war will have a huge effect on global oil markets and prices over the next year.

In fact, oil market analysts project that even if the war ended today, it would take at least six months for the situation to stabilise – pump prices and global benchmarks to get to pre-war levels.

It will take even longer – up to mid-2027 if damage to oil infrastructure in the gulf has been greater than estimated, and it takes longer to rebuild inventories.

What this means is that oil prices will not drop to pre-war levels within the remainder of this financial year.

Responsible governments should level with the public, communicate this clearly and adjust macro-economic plans accordingly.

Nonetheless, what the government of Kenya has done, and looks bent on continuing to do, is to take small reactive policy responses that remain vulnerable to continued volatility to geopolitics of the US war with Iran and will not actually stabilise the economy, let alone cushion businesses and wananchi.

The policy stance taken will only mean more weird Epra price adjustments and State House vetoes and u-turns that will further dim market confidence and sustain price volatility that will end in slower growth and revenue.

This is what government must do now: The Treasury Cabinet Secretary must now go to the budget proposals for FY2026/27 and find Sh50 billion recurrent expenditure to cut.

That will reduce revenue demands by an equal amount and obviate the need to raise the prices of oil. Here is why: Kenya raises about Sh330 billion annually from taxes on oil.

Broken down, as per FY2024/25 outturns, this is about Sh119 billion from Road Maintenance Levy Fund (RMLF); Sh36 billion from Railway Development Levy (RDL) on oil; Sh100 billion from VAT on fuel; and Sh70 billion from excise

duty on petroleum.

Analysis of the impact of Iran war on global crude oil prices has been estimated to be up to about 15 percent. This computed means that the war will cause at least Sh50 billion increase in the economic burden that ordinary Kenyans and businesses have to bear in FY2026/27 for the government to maintain the Sh330 billion revenues it expects from tax on oil.

Since Kenya has already securitised [or planned to securitise] RMLF and RDL, which reels in the most oil taxes, it leaves VAT and Excise Duty as the only other options, policy tools, to apply to reduce taxes on oil and stabilise oil prices.

VAT brings on average Sh100 billion annually. Cutting the rate by half, from eight percent to four percent, would generate the Sh50billion needed in this instance to stay the cost of oil products, critical to the economy, where they were pre-

war.

Of course this will cause a 1.4 percent cut in total government revenue and increase the FY2026/27 budget deficit by about 1.6 percent (to about Sh300 billion or widen by about 1.1 percent of GDP); which will make those folks in Washing-

ton DC to come shouting about fiscal risk.

But what is the responsible and patriotic thing to do right now? Looking outside and watching the empty streets, burning tyres and blocked streets, businesses staring at further turmoil and citizens in despair?

To be frank, the options are not many. It could take the direction of more domestic borrowing, which nobody wants at this stage as it would push interest rates further and crowd-out credit for local businesses especially MSMEs.

External borrowing, from the usual suspects, would further expand the external debt burden and exacerbate forex risks. The Treasury could also tap into cash reserves it obtained from asset sales and recent Eurobond issues.

The more realistic option is to cut spending. Reduce unnecessary recurrent government expenditure by Sh50 billion this year to cover the revenue loss from halving VAT on oil at this dire season of global turmoil. There is still space to meaningfully cut recurrent spending, and we must now do it.

If Sh50 billion worth of expenditure cuts that government can do without this year is what is needed to stabilise things over the next six months, then we must do it. Now you see why those ridiculous expenditures in renovating houses, buying new cars and traveling to every corner of planet earth mean something? Someone said that we lose Sh2 billion a day, that

would be just 25 days to sort out this ‘small matter’!

I had a most wonderful discussion with a group of young professionals last Saturday morning. The discourse was on the decline in real wages in Kenya between 2019 and 2023.

We met in a seminar setting, but were live on two social media platforms. We debated the causes of the decline, and best policy responses. We debated what county governments can do about it, and what kind of politics we want.

One thing is clear. Young professionals are taking a keen interest in the affairs of the state. And well they should, as I found out a few days later in a tax symposium, but that is a story for another day. Here is how the debate went.

One of the colleagues explained that a combination of high inflation outpacing salary adjustments, statutory payroll deductions, and stagnant productivity, eroded workers’ purchasing power for five consecutive years.

The elevated inflation was driven by high global fuel prices and erratic weather patterns affecting food production. In addition, currency speculation, centred around the settlement of a $ 2 billion Eurobond severely weakened the Kenyan shilling in 2023, further driving up inflation.

The Covid-19 pandemic caused massive economic disruptions in 2020, forcing businesses to implement salary cuts, freeze hires, or lay off staff to stay afloat. These measures set a low wage baseline that failed to recover in tandem with subsequent inflation waves.

But even after the pandemic, businesses continued struggling with stagnant productivity. They faced high operational costs, a tight regulatory environment, and expensive credit lines. In addition there was a visible decline in national labour productivity.

The tight monetary policy did bring inflation under control. After five years (2019-2023) of declines in real wages, the improvements in 2024 were a much welcome relief for citizens.

The initial recovery of real wages in mining and quarrying, manufacturing, construction, wholesale, retail and repair of motor vehicles, information and communication did extend to agriculture and financial services in 2025.

Most workers are, however, yet to recover all the lost ground, one of the economists argued. That may take several quarters of sustained high growth. But now, with the war in the Middle East driving fuel prices high, that recovery is under serious risk. All this requires innovative policy choices. And so the discussion turned to those choices.

First, the young professionals rejected the framing of these economic issues as ‘us’ vs ‘them’ contests. When I asked them why, they nearly laughed me off my seat.

You politicians sell fear, anger and hope, they charged. You frame issues this way to persuade us that the actions of your opponents are a sinister plot to finish us! And that therefore we should get behind you in support as you do battle.

I was baffled. Of course, defining ‘us’ versus ‘them’ allows politicians to rally ethnicities or groups of citizens. The fights that politicians talk of are often with imaginary, if mortal enemies. In Europe and America, ‘them’ is the immigrants, who are supposedly taking jobs from the natives.

Here at home, the divide is framed as opposition versus government, but more eerily, it pits ethnic groups against each other, or income groups against one another. The language is usually incendiary – ‘they are out to finish us’.

The group of Gen Z and millennials proceeded to educate me. It is clear that in humanity, often arbitrary, meaningless groupings can create prejudice. That is why the young people are rejecting the groupings created by politicians to define ‘us’.

If the issues are inflation, stagnant wages, caused in part cause by stagnant productivity, what if anything, can say county governments do about it? Plenty, the young professionals informed me.

For starters, counties should reduce the number of licences that small businesses require. They can also make the licences cheaper. They can assist with market linkages, they said. They can make the cost of credit cheaper. How? I enquired, protesting that some of these are national government functions.

Counties can improve the infrastructure for production, they insisted. That is what the county aggregation parks were all about. That led into a debate on whether the companies that want to operate in these aggregation parks have been identified, which best way to do so, and provide supportive services to assist then start.

Debate soon turned to the type of politics the young professionals want to see as we approach the next elections cycle. They were unanimous: Issue-based.

Most people believe that they have a financial plan. They save consistently, invest where possible, and give some thought to retirement. Over time, these actions begin to take shape, creating a sense of progress and control.

On the surface, this seems sensible, but beneath that, many of these plans have a common weakness: they are not designed as an integrated whole.

Instead, what exists is a collection of well-intentioned decisions made at different points in time, often without a unifying structure. While this may not be immediately apparent, it becomes clear when those plans are under pressure.

Financial plans do not fail in stable conditions. They fail when tested. Disruption to income, significant health events, poorly structured assets or a lack of clarity around succession are not extreme scenarios. They are part of the natural course of life. When they occur, they do not introduce new weaknesses, but rather reveal existing ones.

It is in these moments that the difference between plans emerges. Between plans built for growth and plans built to endure. The difference is rarely effort. Most individuals are doing the right things: earning, saving, investing and planning.

The issue is not a lack of access to financial tools either. Investment products, retirement solutions, insurance and estate planning structures are all widely available.

The problem lies in how these elements are brought together – or, more accurately, how they are not.

In most cases, each component is approached independently. Investments are made with growth in mind.

Retirement is considered in isolation. Insurance is taken out as a precaution. Estate planning is either deferred or

treated as an afterthought.

Individually, each decision may be sound. Together, however, they often lack alignment. Without alignment, even strong individual components do not form a resilient whole. This is where a different way of thinking is needed. Properly understood, wealth is not simply accumulated over time, it is designed.

This requires a level of intentionality that goes beyond individual actions and focuses on how they connect. When viewed through this lens, four elements emerge, not as separate considerations, but as interdependent pillars of a single system.

The first is retirement. At its core, wealth must serve a purpose. Without a clear view of the outcome it is meant to achieve, financial decisions lack direction. In this sense, retirement is not defined by age, but by independence; the point at which wealth begins to sustain the life it was built to support.

The second element is investments. This is where growth is generated. Investments determine how effectively capital compounds over time and play a central role in building wealth. However, when used in isolation, they are inadequate.

Growth without context can create as much risk as opportunity. The third factor is structure. As wealth increases, the focus shifts from accumulation to control. The way in which wealth is held, governed and ultimately transferred becomes increasingly important.

Structures such as trusts are not merely administrative tools; they are mechanisms through which intent can be preserved and passed on.

The fourth factor is protection. No financial plan exists in a vacuum, but rather is the result of several factors and considerations. Every plan is vulnerable to disruption, whether due to loss of income, illness, or unforeseen events. In this context, insurance is not an accessory. It is the safeguard that ensures progress is not undone when circumstances change.

Each of these pillars is well understood individually. What is less common is their integration.

It is this integration that transforms a series of financial decisions into a coherent plan. It allows growth to be supported by structure and structure to be reinforced by protection, directing it all towards a defined outcome.

Without it, gaps remain, and these gaps are exposed when plans are tested. With it, however, something more robust begins to take shape. It is a system in which each component strengthens the others, and decisions are made with the full picture in mind, rather than in isolation.

This can be described as the architecture of wealth. It is neither a new more deliberate way of thinking about finances, recognising that wealth is not just built, but also structured, protected and sustained. Ultimately, the real distinction lies not in how much wealth is created, but in how well it holds.

The true test of any financial plan is not how it performs when conditions are favourable, but how it responds when conditions become challenging. Therefore, the goal is not just to build wealth, but to build enduring wealth.

The government has lost a bid to keep secret the Chinese loan agreements, operational deals and procurement records linked to the Sh600 billion standard gauge railway (SGR) line between Mombasa and Nairobi.

This follows a Court of Appeal’s decision upholding orders requiring the Principal Secretary in the Ministry of Transport, the Principal Secretary at the National Treasury and the Attorney-General to release the documents, opening the door to fresh public scrutiny of Kenya’s debt obligations and dealings between Nairobi and Beijing.

The three-judge bench ruled that the State could no longer hide behind secrecy clauses, national security claims and diplomatic confidentiality to withhold details of the infrastructure project.

The William Ruto government released part of the loan documents related to the railway in November 2022, when it was less than a month in office.

His predecessor’s administration had fought a years-long battle in the courts to keep the documents secret.

Now, the Court of Appeal has compelled the Ruto administration to make public the terms of the loan agreements with the Export-Import Bank of China and China Exim Bank and how SGR equipment was procured.

However, the decision, which would violate the agreements’ confidentiality clauses if China Exim Bank does not agree to their publication, risks straining relations between Kenya and its largest trading partner.

The contracts for the railway, which was opened for operations from Mombasa to Nairobi in 2017, have long been a subject of controversy, with then President Uhuru Kenyatta citing confidentiality clauses when a court ordered their publication in early 2022.

The court said the State had failed to prove that disclosure of the agreements would threaten national security, foreign relations or Kenya’s economic interests as claimed by officials.

‘The public interest in transparency, accountability and oversight of public finance outweighed any speculative harm alleged by the State,’ the judges said.

The judges further ruled that non-disclosure clauses signed between Kenya and foreign entities could not override constitutional requirements on access to public information, especially where taxpayers’ money and sovereign obligations were involved.

The Court of Appeal reckons that the SGR was financed through billions of dollars in concessional and commercial loans from China Exim Bank and that repayment obligations continue to be met using public funds despite the railway’s operational losses.

Kenya borrowed Sh655 billion ($5.08 billion) from the China Export-Import Bank in the fiscal year ended June 2015 for the construction of the SGR from Mombasa to Nairobi and later to Naivasha.

The Treasury estimates that it has been spending Sh50 billion a year on servicing the SGR loans.

In the landmark judgment, the appellate court dismissed an appeal filed by the Attorney-General and upheld a 2022 High Court decision compelling the government to disclose extensive SGR records sought by governance activists Khelef Khalifa and Wanjiru Gikonyo.

The records sought include loan agreements with China Exim Bank, procurement contracts, guarantees, collateral arrangements, feasibility studies, environmental impact assessments, cargo agreements and operational contracts involving Africa Star Railway Operation Company, which ran SGR services in the first five years of operations.

The ruling could place fresh pressure on the Treasury and transport authorities to publicly disclose the financial and legal obligations Kenya assumed under the Chinese-funded railway project.

The legal dispute started after Mr Khalifa sought detailed SGR records through letters written in December 2019 and May 2021 to the Ministry of Transport, the Treasury and other State agencies.

Among the documents sought were financing contracts, Take-or-Pay agreements between Kenya Railways and the Kenya Ports Authority, agreements involving Africa Star Railway Operation Company and records on the railway’s economic, environmental and social impact.

Mr Khalifa also requested details on cargo volumes handled through the Port of Mombasa, Inland Container Depot facilities and the ownership structure of Africa Star Railway Operation Company.

The activists argued that the public remained unaware of the consequences of default under the Chinese loan agreements despite taxpayers carrying the repayment burden.

They also cited previous court findings that the SGR procurement process breached procurement laws and constitutional requirements on public participation.

The Attorney-General opposed the petition, arguing that the requested records were protected under the Official Secrets Act and exemptions under the Access to Information Act.

The State further argued that the agreements contained non-disclosure clauses and that releasing them could expose Kenya to serious legal and financial consequences.

Additionally, the State claimed disclosure could undermine foreign relations with China and harm Kenya’s ability to manage the economy.

However, the Court of Appeal rejected those arguments and faulted the government for issuing blanket secrecy claims without presenting evidence showing how disclosure would cause actual harm.

The judges said merely citing national security or confidentiality clauses was insufficient under the Constitution.

‘Access is the rule; secrecy the exception that must be earned by the State,’ the court ruled.

Public agencies, the judges added, cannot rely on blanket claims of national security, confidentiality or diplomatic sensitivity to shield taxpayer-funded projects from public scrutiny without presenting clear evidence of potential harm.

The judges further stated that public officials could not deny citizens access to information based on suspicions about how the information would be used.

‘The information belongs to the public. The State holds it as custodian, and not as proprietor,’ the court said.

The appellate judges upheld findings by High Court, which had ruled that the refusal to disclose the information breached constitutional rights on access to information, transparency and accountability.

The High Court had also ordered the government to provide the requested records at its own cost.

In its appeal, the Attorney-General argued that the activists had failed to demonstrate why they needed the information or what public benefit disclosure would serve.

But the Court of Appeal rejected that position, holding that citizens are not required to justify requests for State-held information.

The judges said Article 35 of the Constitution grants citizens an unconditional right to access public information unless the State proves lawful exemptions.

The court further warned against using secrecy laws to shield government operations from scrutiny.

‘Public business is the public’s business. The people have the right to know,’ the judges said.

The precedent-setting ruling is expected to have far-reaching implications for future government borrowing, public-private partnerships and bilateral infrastructure deals involving foreign financiers.

It also strengthens demands for disclosure of debt agreements, concession contracts and sovereign guarantees signed by the government in other mega infrastructure projects.

Kenyans will have spent additional Sh25 billion on fuel in the two months to June 14, highlighting the impact of US President Donald Trump’s war on Iran on household and business budgets.

A Business Daily analysis of fuel consumption trends and revised Energy and Petroleum Regulatory Authority (Epra) prices shows motorists and households will spend an additional Sh25.09 billion between April 15 and June 14.

The fallout from the Iran war is driving inflation to its highest level and creating a growing political problem for President William Ruto in the wake of protests and a nationwide public transport strike that was paused yesterday for seven days.

Higher prices at the pump have not only taken a toll on motorists but have also pushed up the cost of everything from groceries to fares and manufacturing as escalating fuel expenses feed through to other sectors.

Inflation rose to 5.6 percent year-on-year in April from 4.4 percent a month earlier, driven largely by higher fuel costs, marking the fastest increase in seven years.

The additional burden excludes nearly Sh14 billion government subsidies and the impact of the halving of Value Added Tax (VAT) on petroleum products to 8.0 percent, meaning the actual cost to consumers could have been higher without State intervention.

Diesel users will bear the heaviest additional burden at Sh16.13 billion, followed by petrol consumers at Sh6.75 billion and kerosene users at Sh2.20 billion.

The estimates are based on average monthly fuel consumption derived from official data for the 12 months ending February 2026, covering diesel, super petrol and kerosene usage across the country.

The additional cost was calculated by comparing changes in pump prices across successive pricing cycles against estimated monthly consumption volumes as reported by the Kenya National Bureau of Statistics.

According to the analysis, Kenyans consume about 243.3 million litres of diesel, 187.7 million litres of super petrol and 57.1 million litres of kerosene monthly.

This translated to a projected fuel bill of Sh107.8 billion in the May 15-June 14 cycle alone, compared to Sh82.7 billion in the March 15-April 14 period before the steep increases linked to the Middle East conflict.

Epra started adjusting fuel prices upward from mid-April after increased shipping and importation costs linked to the Gulf conflict filtered into Kenya’s petroleum supply chain.

The impact started emerging in the April 15-May 14 pricing cycle because Kenya’s fuel pricing system operates with roughly a one-month lag between importation and local pump price adjustments.

Diesel prices rose from Sh166.54 per litre in the March 15-April 14 cycle to Sh206.84 in April-May before climbing further to initial Sh242.92 in the May 15-June 14 cycle.

Super petrol increased from Sh178.28 per litre in March-April to Sh206.97 in April-May and Sh214.25 in the current cycle.

Following protests by public transport operators demanding a Sh46 per litre reduction, Epra on Monday lowered diesel prices by Sh10 to Sh232.86 per litre, while petrol prices remained unchanged.

The fuel price increases triggered a public transport strike that disrupted commuter services and increased pressure on the government to review pump prices.

Interior Cabinet Secretary Kipchumba Murkomen said on Tuesday that the government had reached a deal with public transport operators to suspend the strike for seven days to allow ‘high-level’ negotiations on their demands.

The agreement followed talks that began Monday between the government and the operators protesting rising diesel prices.

Federation of Public Transport Sector chairman and Kenya Bus Service Management managing director Edwins Mukabana said operators had agreed to temporarily suspend the strike to give negotiations a chance.

‘We have had serious consultations from yesterday [Monday], and today [Tuesday], we have just had a breakthrough, not because we are satisfied but we want to give negotiations a chance,’ said Mr Mukabana.

‘So we are waiting for negotiations at high level, but we would like to let customers and those who we work with understand that if this is not taken seriously within the seven days that we have given, the strike will be back.’

Association of Matatu Transport Owners chairman and Federation of Public Transport Sector chief executive Kushian Muchiri said operators had not abandoned demands for a deeper reduction in diesel prices.

‘As much as we would have been happy to say that we have got the Sh46 [reduction per litre] that we were seeking, we are also glad that at least negotiations have started in earnest,’ said Mr Muchiri.

‘The need for our demands to be met and for our transport industry to be taken seriously has been well noted by the government.’

Kenya, like many African countries, relies heavily on fuel imports from Gulf producers through government-to-government supply arrangements, exposing it directly to geopolitical tensions in the Middle East.

The conflict, which began on February 28, disrupted supply routes and triggered fears over oil shipments through the Strait of Hormuz, where about a fifth of the world’s oil passes.

Although a ceasefire has since been declared, fuel prices have remained elevated amid continued uncertainty around the critical shipping channel.

Global crude prices surged past $100 per barrel at the height of the tensions as traders feared Iran could disrupt tanker traffic through the Gulf, sending shockwaves across fuel-importing economies such as Kenya.

The increases would have been steeper without government intervention through subsidies and tax cuts.

Energy Cabinet Secretary Opiyo Wandayi said the State had spent Sh13.9 billion in subsidies between April and May to cushion consumers from higher global oil prices.

‘On subsidy alone between last month and this month, the government has applied Sh13.9 billion to manage the cost of petroleum products,’ said Mr Wandayi.

‘Last night’s reduction of Sh10 on diesel took Sh2.7 billion to demonstrate that the government continues to be sensitive on the plight of Kenyans.’

Last month, the government also cut VAT on fuel from 16 percent to 8.0 percent until July in an attempt to ease pressure on consumers and businesses.

Treasury Cabinet Secretary John Mbadi said on Monday the State had lost an estimated Sh24 billion in fuel taxes due to the VAT reduction from April 15.

Mr Mbadi added that only Sh5 billion remained in the Petroleum Development Levy (PDL), the fund used to subsidise fuel prices and funded through a Sh5.40 charge per litre of petrol and diesel.

The government said it used Sh6.2 billion to subsidise fuel prices in the monthly cycle ending April 14 and a further Sh5 billion in the current round ending May 14.

The rapid depletion of the subsidy fund has increased pressure on the State to inject more public money to cushion households and businesses from surging fuel prices.

Fuel taxes remain a major contributor to pump prices in Kenya, with the Roads Maintenance Levy accounting for the largest share at Sh25 per litre of petrol and diesel.

State House technocrat Adan Mohamed beat six Kenya Revenue Authority (KRA) insiders to become the tax authority’s next commissioner general after closely guarded interviews that were conducted on Monday with the victor announced

on the same day.

Treasury Cabinet Secretary John Mbadi published Mr Adan’s name in a gazette notice following completion of interviews for seven candidates shortlisted for the position of KRA Commissioner-General and chief executive officer.

Most of those on the list were drawn from within KRA’s rank and file, a factor that sources say could create fault lines between insider commissioners and an outsider boss.

Mr Mohamed will be sworn in on Wednesday, and hopes to rely on his colorful CV to better his predecessor’s performance.

‘In exercise of the powers conferred by Section 11 (1) of the Kenya Revenue Authority Act, the Cabinet Secretary for the National Treasury appoints Adan Abdulla Mohamed to be the Commissioner General of Kenya Revenue Authority for a period of three years with effect from May 18, 2026,’ Mr Mbadi said in a gazette notice dated May 18, 2026.

Others who were eyeing the position included Lilian Nyawanda, the Commissioner for Customs and Border Control, who had also served as acting Commissioner-General.

Rispah Simiyu, who heads the Domestic Taxes Department, was also said to be interested in leading the tax authority, alongside Fred Mugambi, the commissioner in charge of the Kenya School of Revenue Administration.

Others who had reportedly shown interest in occupying the corner office at Times Tower included Caxton Masudi Ngeywo and Nancy Ng’etich, the Commissioner for Shared Services at the Kenya Revenue Authority (KRA).

Lydia Ndirangu was the only other outsider said to have expressed interest in the position, which has traditionally been occupied by men.

She is currently the dual Group Company Secretary and Head of Tax at Equity Bank Group Holdings.

However, the board opted for Adan, who, although does not have any tax experience, has a wealth of knowledge in the business world.

The two-time Cabinet Secretary, who had been serving as chief of strategy execution in the Executive Office of the President, is now expected to improve KRA’s revenue collection by deploying technology to widen the tax base and net hard-to-tax areas such as the informal sector and multinationals without a physical presence in the country, in line with President William Ruto’s strategy of avoiding politically sensitive targets such as payroll taxes and fuel levies as he eyes re-election next year.

Mr Adan previously served as Cabinet Secretary for Industrialisation and Enterprise Development before later heading the East African Community and Regional Development ministry.

The interviews for the seven shortlisted applicants were conducted on Monday, at a time when the country was gripped by a standoff between the government and public transport operators, who withdrew their vehicles from the roads in protest over high fuel prices, effectively paralysing large sections of the economy.

A KRA source, however, revealed that interviews took place throughout the day.

In the end, the board settled on Mr Adan to replace Humphrey Wattanga, with his name subsequently forwarded to the Treasury Cabinet Secretary for gazettement. The notice was made public later the same day.

KRA chairman Ndiritu Muriithi said the process of replacing Mr Wattanga gathered momentum after the board declined to renew his term. According to Mr Muriithi, KRA advertised the position last month, attracting 36 applicants.

The applicants were later narrowed down to a shortlist of 12 before being further whittled down to seven candidates who faced the interview panel.

‘And this is the best candidate,’ said Mr Muriithi, citing Mr Adan’s track record, including recognition as one of the country’s top corporate chief executives and his experience serving twice as Cabinet secretary.

‘Give me a stronger CV and I will hire him for you,’ added Mr Muriithi.

Before taking up the State House role, Mr Adan had unsuccessfully vied for the Garissa governor’s seat on a Jubilee Party ticket, losing to Nathif Jama Adam. Jubilee is associated with former President Uhuru Kenyatta.

In a surprising political shift, Mr Adan later joined President Ruto’s administration despite having served for a decade under Mr Kenyatta, whose relationship with Dr Ruto had become strained during their second term in office.

Mr Adan is now expected to guide KRA through a delicate political and economic period in which President Ruto must court voters ahead of the 2027 General Election, while at the same time maintaining fiscal discipline as the country teeters on the verge of debt distress.

The other applicants who made it to the interview stage were also strong candidates, according to Steve Okoth, Tax Advisory Director and Regional Head of Tax at BDO East Africa, but it appeared the Kenya Kwanza administration did not want surprises.

‘As a result, they settled on an old hand, someone who has been tried and tested,’ said Mr Okoth.

The Nairobi Securities Exchange (NSE) is on Tuesday set to list its first infrastructure fund, a Sh3.5 billion investment vehicle

offering investors direct exposure to logistics and power projects while allowing them entry and exit through trading.

Spearhead Africa Asset Management Limited, the sponsor of the fund, will list 35 million units of the fund at the price of

Sh100 each, supporting the fund’s accessibility, transparency and liquidity to investors.

The fund, dubbed the Spearhead Africa Infrastructure Fund, has raised Sh3.5 billion in local currency from 25

high-net-worth investors, including CPF Group and United Kingdom’s Mobilist programme, in its first series.

Investors in the fund stand to earn a quarterly interest payout from investments like renewable energy, agribusiness and logistics. The listing of the fund on the NSE’s unquoted securities platform expands the list of asset classes available to investors, easing the dominance of company stocks and government bonds.

The fund targets delivering a return of between five and six percent above the prevailing 10-year government bond

return/yield, enticing domestic capital pools like pension funds that have largely favoured Treasury instruments

over alternative asset classes.

The investors will start getting a return once the firm starts getting incomes from the Sh3.5 billion investment. This suggests the investors will benefit from capital gains in trading part of 35 million units at the NSE.

‘Many times when you invest into an infrastructure fund, it will take 10, 15 or even 20 years before you can get your

money out. The situation where you are stuck for that much time is unattractive and unappealing to a lot of investors,’

Ngatia Kirungie, the managing director of Spearhead Africa Asset Management Limited told Business Daily in an

interview on Monday.

‘We are not a typical fund manager that oversees say pension portfolios and then goes and invests into different asset classes. We create asset classes and products like infrastructure and instruments that people can use to invest in those asset classes. Fund managers, pension schemes and their clients can invest through us.’

Spearhead Africa is licensed by the Capital Markets Authority as a special collective investment scheme, implying that today’s listing is also a first for a pooled investment vehicle.

The fund has picked NCBA as its independent trust-

ee and KCB as the custodian. Units of the fund will be tradeable by institutional investors, high-net-worth individuals and retail investors, with the minimum amount traded set at Sh100,000 or 1,000 units.

The sponsor of the fund is set to raise additional capital to support further senior/subordinate debt underwriting

through public offers which will take various forms, including rights issues to existing unit holders.

This will see both the net asset value of the fund, its listed price and number of units vary over time. The fund has yet

to underwrite any debt at present but expects to promptly issue loans to identiied infrastructure projects. Spearhead

expects to distribute its entire income from its on-lending activities to unit holders.

The investors would currently earn a return of up to 18.3 percent based on the prevailing return from a 10-year tenure

fixed -income government bond (around 12.3 percent). The fund manager says the vehicle is better than bank loans from a borrower perspective and private equity funds from an investor perspective.

This is by offering long-term/patient capital to backers of infrastructure projects while allowing investors to enter and exit the fund at will through the NSE.

‘If you go to a local bank to borrow, the tenure you get is five years or maybe seven years at best. This presents a mis-

match when the asset is 20 years. This creates a refinancing risk at the end of the loan period and puts a lot of pressure

on cash flows of the business during the early critical stages of its life,’ added Mr Kirungie.

‘With the private equity typical structure, you get nothing until the end. PE and venture capital funds are also domiciled in other jurisdictions and some local investors including pension funds might be hesitant to invest in such funds.’

Spearhead sees its vehicle as attractive to pension funds and their trustees, who are still obligated by members to report

strong periodic returns even with a longer-investment horizon.

“The fund says it will initially focus on infrastructure projects before exploring alternative asset classes like private debt.

It is May 3, 2026. I am lying in my bed, doom-scrolling like everyone else on an early Sunday morning. My social media feeds are flooded with posts about the Kalasha International Film and TV Awards, which had taken place the previous evening at the Kenya International Convention Centre in Nairobi.

Looking at the winners celebrating online, I feel a genuine sense of pride for the culture. Kash Money takes home five awards.

Looking at the pictures of the production duo of Grace Kahaki and Philippe Bresson holding those trophies made me incredibly happy. They have been putting in the work for a long time, and the recognition is well-deserved.

It was equally gratifying to see June Wairegi and Omar Hamza take home trophies for Sukari. They have also been out there doing the Lord’s work for Kenyan film culture, and I am glad they got their flowers.

The Big Sad Nairobi

Other wins bring a smile to my face, too. The Dog won a couple of awards, and June Njenga took home Best Female Lead for Big Girl Small World.

Even the animation category offered a pleasant surprise with Lore taking the prize. “The Big Sad Nairobi is such a unique production’, I think to myself. In fact, stop motion is such a gruelling storytelling style; how did it not get recognised? But then I get distracted by a story by Shuga Mashariki, which won. It was easily one of my favourite young adult shows of the year (season 1), so seeing it recognised was satisfying.

But I get pulled deeper and deeper by the algorithm, and some posts begin to bother me. Nawi walked away with four awards, and frankly, I just don’t think it’s a very good movie. To me, Nawi plays out like an over-extended version of the first act of the 1992 film Saikati.

Aside from its striking cinematography and the performance of Michelle Lemuya Ikeny (who I think is a national treasure and should be protected at all costs), the story itself doesn’t hold up. But that is a debate for another day, so I keep scrolling.

My thoughts drift, I realised I was deeply grateful not to be on the judging panel. This edition’s nominations themselves were spectacular, showcasing a massive leap in production quality across the board. Being nominated this year is a big achievement, and every single person on that list deserves to be congratulated.

Yet, seated there as my phone notifies me that I have 20 percent of power left, a few glaring omissions leave me annoyed.

The biggest snub that keeps bothering me is the show Subterranea. Our productions have a habit of playing it safe, churning out the same old dramas and crime stories while shying away from other genres, such as science fiction, horror, and musicals.

Subterranea tried to break that mould by giving us a genuine sci-fi show with incredible performances. Why doesn’t Kalasha International have a category called, “We see you pushing boundaries, and we love it,” for productions like Subterranea and The Big Sad Nairobi?

We have the Jury Award, but this year, that went somewhere entirely different. This would be dedicated specifically to projects that might not meet the traditional criteria for “best of the best,” but clearly dare to innovate and stretch the boundaries of Kenyan storytelling.

Then, for a second, I go down a rabbit hole looking for ‘Best Video Game Award’. It’s nowhere to be seen. Did they just scrap the video game category to accommodate social media content creators, but without Crazy Kennar?

Sanaipei Tande

The other major shocker is Sanaipei Tande. Forget her past wins, when an artiste is exceptional, she is exceptional. This year, she delivered three completely distinct, fantastic and unique performances across three different productions.

The fact that she walked away empty-handed is baffling. Without a doubt, June Njenga did a spectacular job in Big Girl Small World and deserved her win, but we cannot ignore the sheer weight of work Sanaipei put in by anchoring three entirely separate roles. What’s the point here? A “Push the Envelope Award.”

Then my mind drifts to Jimmy Gathu. Jimmy’s performance in Chocolate Empire was another missed opportunity. A performance does not need to be an over-the-top, emotionally explosive theatrical showcase to be brilliant.

He brought a dialled-down, restrained and deeply effective nuance to his character that sold the role better than almost anything else I saw this year. That’s the end of the negative aspects from the event, I think to myself, spoiler alert, it wasn’t.

Because social media is designed to be addictive, I keep scrolling. The engagement online shifted toward a much larger talking point: the presence of the President. The headlines are massive, the government announced a Sh40 million cash prize kitty for filmmakers, at first, I think clickbait, but after a few credible posts, I realise it’s true (No, I didn’t ask Grok if the post was true).

The funding issue

I paused. That number, Sh40 million, sounded eerily familiar. I switch to a browser, but before I can go any farther, I remember Kalasha didn’t happen last year. The 2025 awards were cancelled precisely because of a budget shortfall of exactly, yes, you guessed it, Sh40 million.

Suddenly, the picture changes. This new filmmaker kitty requires the projects to focus on government programmes. Is the State turning our creative industry into a public relations vehicle? I ask myself.

But I pause and challenge my own cynicism. Isn’t this how film funding in Africa works? Films are funded, but are required to align with a narrative. Is it inherently wrong for creatives to work with politicians? Musicians have done it for decades, I mean, Unbwogable was and still is an African political anthem. Musicians reap massive financial rewards from political soundtracks.

Why shouldn’t filmmakers get a piece of that pie? Can’t an African politician be a cinephile and offer their own hard-earned cash for the sake of film culture? Plus, every person with a skill has a right to monetise their skill in whichever way they choose, right?

My mind drifts to the long-term cost. Kenyan cinema suffers from incredibly poor audience retention. If a filmmaker aligns closely with a controversial political figure, they risk alienating the small, precious audience they have fought so hard to build.

More deeply, it mirrors a tragic societal and political pattern. A voter in a rural village accepts Sh200 during campaign season, only to spend the next five years suffering from bad roads and underfunded hospitals. The politician vanishes, only to reappear five years later with another Sh200 handout.

And it’s clear, the fund is exactly what that is, substitute the rural voter with a filmmaker, the fund Sh200, the roads and hospitals with the cycle of issues (funding being the primary one) that Kenyan filmmakers are facing.

State funding should not be a short-term band-aid thrown at a systemic, structural crisis. By the way, how can we ignore the cognitive dissonance? This is the same state machinery that has tear-gassed high school theatre students in our institutions for exploring political themes in their drama festivals. Those very students are the future of Kalasha.

Creative independence

Public investment in cinema should be welcomed, but sustainable growth requires systemic policy, not political patronage.

While short-term incentives offer immediate political capital, true leadership builds the institutional frameworks that secure the long-term viability of our film culture. In my head, that statement sounds profound, maybe a bit corporate, but then I remember that I am not a seasoned politician. How would I know what works?

I cannot blame, nor look down on, any filmmaker who participates. But we must be completely conscious of the consequences of dancing with the state.

When the handout economy swallows the creative expression, it signals the beginning of the end for creative independence and the beginning of waiting for political handouts after every five years to bring ideas to life. I love all the social media posts (literally clicking the like button), but the heavy political presence diluted the celebration.

Staring at my screen, I debated whether to publish my thoughts immediately, but I decided to let the dust settle, excitement and anger to cool down, to allow rational and logical thinking. I decide to give it two weeks.

Kenya suffered widespread transport and business disruptions on Monday after public service vehicle operators withdrew services over soaring fuel prices and mounting operating costs.

Thousands of commuters in Nairobi, Mombasa, Kisumu, Nakuru and Eldoret and towns were left stranded as matatu operators, truckers, boda boda riders and taxi associations joined the nationwide protests, triggering long walks and severe traffic disruption.

The protests were triggered by sharp increases in pump prices, which pushed petrol in Nairobi above Sh214 per litre, while diesel, critical for transport and logistics, surged past Sh242.

The latest price increases have deepened pressure on businesses and households already struggling with elevated taxes, rising electricity costs and stubbornly high prices of essential commodities.

Gridlock pain

On Monday, major roads leading into Nairobi city centre were barricaded with bonfires and stones, forcing private motorists to turn back while businesses delayed opening due to low customer and employee turnout.

Roads such as Thika Road, Mombasa Road, Jogoo Road and Waiyaki Way experienced intermittent disruption as protesters blocked sections of carriageways, forcing many to abandon travel plans altogether amid fears of escalating unrest.

Businesses operating in Nairobi’s central business district reported lower customer traffic and reduced operations as transport challenges disrupted supply chains and employee movement.

Several schools and colleges also experienced disruption after parents struggled to secure transport for learners, forcing some institutions to temporarily shut down.

Inflation risk

The demonstrations followed last week’s fuel price review by the Energy and Petroleum Regulatory Authority, which raised petrol prices by Sh16.65 per litre and diesel by Sh46.29 per litre.

Diesel prices have now risen by over Sh80 a litre in the past two review cycles, significantly increasing costs for transport operators, manufacturers, retailers and logistics firms heavily dependent on road transport networks.

Higher transport costs are expected to feed directly into inflation through increased prices of food, manufactured products, farm inputs and retail goods over the coming weeks.

Transport operators have accused the government of overburdening businesses and consumers through taxes and levies embedded in fuel prices despite worsening economic conditions and stagnant household incomes.

Political heat

The heightened pressure on the government comes as Kenya pursues aggressive revenue mobilisation targets aimed at narrowing fiscal deficits and supporting ballooning debt repayment obligations.

The unrest also comes as Kenya prepares for another politically sensitive budget cycle, rekindling memories of the 2024 anti-Finance Bill demonstrations, where economic grievances escalated into a broader national debate around taxation and governance.

Treasury officials have defended the latest fuel pricing adjustments, arguing that the government has already cushioned consumers from more severe international oil market volatility and currency pressures.

The latest wave of demonstrations comes at a delicate moment for President William Ruto’s administration, which continues to face scrutiny over taxation policies and the broader management of the economy.

The High Court in Nairobi has stopped the Kenya Revenue Authority (KRA) in its efforts to widen taxation of cross-border consultancy and management fees paid by multinational firms operating in Kenya.

The setback follows a court decision blocking the collection of Sh179.9 million in withholding tax from global advisory firm McKinsey over payments made to its South African affiliate.

In a ruling with potential implications for multinational companies operating in Kenya, the court upheld a 2021 Tax Appeals Tribunal decision that exempted the payments from withholding tax under the Kenya-South Africa Double Tax Agreement (DTA).

The court ruled that the consultancy fees paid by McKinsey’s Kenyan branch to a related South African entity constituted ‘business profits’ under the treaty.

It said the fees could only be taxed in Kenya if the South African company had a permanent establishment in the country.

The court found that the South African entity had no permanent establishment in Kenya, effectively shielding the payments from local taxation.

‘The Commissioner’s approach in the interpretation of the DTA is overly formalistic and ignores principles of international tax law,’ the court said, dismissing the KRA’s appeal.

According to the court, Kenya could not impose taxes that were not expressly provided for in the Kenya-South Africa Double Tax Agreement, stressing that the government was bound by the terms it negotiated and signed with South Africa.

The Kenya-South Africa Double Tax Agreement was signed in November 2010 and became effective from January 1, 2016. This was after years of negotiations aimed at eliminating double taxation and reducing tax barriers for companies and investors operating between the two countries.

The treaty allocates taxing rights between Kenya and South Africa on income earned through cross-border trade, investment and professional services, such as business profits, dividends, royalties and management fees, while also seeking to prevent fiscal evasion and provide certainty for cross-border trade and investment.

The dispute pitted the KRA’s Commissioner of Legal Services and Board Coordination against McKinsey and Company Inc Africa Proprietary Limited, the African arm of the global consulting giant.

KRA had demanded Sh179,956,998 in withholding tax arising from payments made in 2016 and 2017 for professional and management services rendered by McKinsey South Africa.

The tax authority argued that the fees did not qualify as business profits under Article 7 of the treaty and instead fell under the treaty’s ‘other income’ provisions, making them taxable in Kenya.

KRA also argued that the Tribunal had failed to distinguish between ‘income’ and ‘business profits’ and wrongly relied on the bilateral treaty to invalidate the tax demand.

But the court rejected those arguments and affirmed the Tribunal’s findings in full.

‘The Tribunal correctly applied the primary rule under Article 7 instead of the default residual rule of Article 22,’ the judge ruled.

The court said professional and management fees generated through business activity fall within the meaning of business profits under the treaty.

It further held that Kenya could not seek taxing rights that were not expressly negotiated into the treaty.

‘The court cannot rewrite the treaty to give Kenya a right it bargained away,’ the judge said, adding that Kenya deliberately omitted provisions allowing taxation of management and technical service fees when negotiating the Kenya-South Africa tax treaty.

The court noted that while Kenya has included clauses allowing taxation of management and technical service fees in some other tax treaties, it failed to secure similar provisions in this agreement.

Hence, it could not later ask the courts to expand its taxing powers beyond the treaty’s wording.

McKinsey and Company is among the world’s largest management consulting firms, advising governments, banks, telecoms firms, manufacturers and multinational corporations on strategy, digital transformation, operations and public-sector reforms.

In its defence, the company cited the treaty and said the payments constituted business profits under the Kenya-South Africa Double Tax Agreement and were therefore not taxable in Kenya because the South African service provider had no permanent establishment locally.

McKinsey also argued that Kenya deliberately excluded provisions allowing taxation of management and technical service fees when negotiating the treaty and could not later seek rights outside the agreement.

The firm established its Nairobi office more than a decade ago and has expanded its East African advisory business across sectors including financial services, energy, agriculture, healthcare and infrastructure.

Court records showed that the Kenyan branch involved in the dispute was part of a South African holding structure.

However, the consulting services were provided by a separate South African entity that the court found had no taxable presence in Kenya.

The court noted that McKinsey had previously paid withholding tax for the 2014 and 2015 financial years before the Kenya-South Africa treaty took effect.

The dispute only arose after the treaty became operational. The court said the absence of specific treaty clauses allowing Kenya to tax management fees reflected a deliberate policy choice during treaty negotiations.

It observed that Kenya had included such provisions in some other double taxation agreements but failed to do so in the South African treaty.

The court also faulted KRA for attempting to rely on broad interpretations that could undermine the purpose of bilateral tax agreements.

‘Before taxing such income, the Commissioner should not be asking whether there is a specific Article for professional or management fees but rather whether that income is from a business activity,’ the court said.