Category: Business Daily

The Kenya Revenue Authority (KRA) has lost a Sh162.8 million tax battle against Liberty Life Assurance after the High Court ruled that the insurer’s accounting adjustments linked to its life insurance business were not taxable shareholder transfers.

KRA had claimed that the insurer was using accounting adjustments tied to international reporting standards to reduce taxable income. But the court found the changes were mandatory compliance measures and not an artificial tax avoidance scheme.

The ruling shields the insurer from corporate income tax assessments, penalties and interest arising from financial restatements made between 2016 and 2020 under international accounting standards governing insurance contracts.

The court upheld an earlier decision of the Tax Appeals Tribunal, finding that the accounting entries cited by KRA did not amount to taxable transfers from Liberty Life’s statutory life fund for the benefit of shareholders. KRA had argued that the insurer’s accounting restatements reduced funds reserved for policyholders and, therefore, constituted taxable gains under Section 19(5) of the Income Tax Act.

The tax agency assessed Liberty Life for Sh162.8 million in corporate income tax after an audit covering the five-year period.

The dispute centred on adjustments made by the insurer in its actuarial reports and financial statements to comply with International Financial Reporting Standards (IFRS) and guidance issued by the Institute of Certified Public Accountants of Kenya (ICPAK).

KRA told the court that Liberty Life deducted actual income tax liabilities and deferred tax obligations from its life insurance fund, which holds premiums and assets belonging to policyholders.

The Commissioner of Domestic Taxes argued that any amount transferred from the life fund in a manner that benefits shareholders is taxable under the law governing life insurance businesses.

The authority maintained that accounting standards and professional guidelines could not override tax statutes enacted by Parliament.

But Liberty Life countered that the disputed entries were only corrective accounting measures required under international accounting and financial standards and did not involve movement of cash, declaration of dividends or transfer of profits to shareholders.

The insurer told the court that the adjustments had no impact on retained earnings or statutory reserves and produced no financial gain for shareholders.

It also argued that no actuary had recommended transfer of surplus from the life fund to shareholders as required under the Insurance Act.

In dismissing the appeal, the court ruled that KRA failed to prove shareholders benefited from the accounting restatements.

‘The Commissioner failed to identify any specific benefit that actually accrued to shareholders as no dividend was paid and no funds left the life fund for shareholders,’ the court said.

It added that the accounting adjustments were ‘mere accounting restatements’ required under professional reporting standards and not taxable transfers under the Income Tax Act.

The court further held that appeals from the Tax Appeals Tribunal can only address questions of law and not factual findings already settled by the tribunal.

It agreed with the tribunal’s conclusion that the insurer was complying with mandatory accounting and reporting requirements rather than creating an artificial tax avoidance scheme.

‘The respondent was simply complying with mandatory professional and reporting requirements, not creating artificial tax avoidance schemes,’ the judge said.

The court also reaffirmed the protected status of statutory life insurance funds, which are legally ring-fenced to safeguard policyholders’ money from ordinary business liabilities and shareholder claims.

According to the court, only transfers that confer an actual benefit on shareholders, such as dividends or approved profit allocations, can attract tax under Section 19(5) of the Income Tax Act.

‘The correct interpretation is that only outflows that confer a benefit on shareholders such as dividends or profits are taxable,’ it ruled.

The judgment comes at a time stakeholders in the insurance industry have spent heavily in recent years implementing IFRS 17, the global accounting standard that changed how insurers recognise liabilities, profits and future obligations.

Insurers adopting the standard have been required to restate earlier financial records, recalculate liabilities and adjust deferred tax positions in their books.

The court ruling limits KRA’s ability to treat such accounting adjustments as taxable shareholder benefits without evidence of actual profit transfers or dividend payments.

The Kenya Medical Supplies Authority (Kemsa) delivered only 41 percent of medicines and medical supplies ordered by public health facilities in the financial year ending June 2025, leaving facilities without essential drugs, and forcing some to either turn away patients or opt for expensive sources.

Auditor-General Nancy Gathungu said the 41 percent order fill rate fell far below Kemsa’s internal performance target of 90 percent. The authority’s sales revenue also declined to Sh4.89 billion from Sh5.80 billion the previous year.

The order fill rate measures the proportion of items delivered against those ordered. For instance, a facility that orders 10 units but receives four records has a 40 percent fill rate.

The latest performance marks a continued downward trend that has continued to cripple medical supplies to facilites.

Kemsa’s fill rate stood at 69 percent in 2019/20, dropped to 54 percent in 2020/21, then to 50 percent, before slightly improving to 51 percent and 52 percent in the following years-only to plunge to 41 percent in 2024/25. This is the first time in six years that the rate has fallen below 50 percent.

The decline is largely attributed to a mounting Sh6.28 billion debt owed by county governments and public health facilities, which has significantly constrained Kemsa’s ability to procure stock.

Of this amount, nearly Sh3 billion has been outstanding for over a year without repayment plans. Kemsa now waits an average of 487 days, more than 16 months, to receive payments, far exceeding its 45-day credit policy.

The cash flow strain has in turn affected Kemsa’s ability to pay its own suppliers. During the review period, the authority owed suppliers Sh5.71 billion, including Sh1.73 billion that had remained unpaid for more than 90 days without repayment arrangements.

Operational challenges have also worsened. By June 2025, hospitals were waiting an average of 19.5 days for deliveries, nearly three times the seven-day target.

Dispensaries and smaller facilities faced even longer delays, averaging 24.2 days against a target of ten days.

Even donor-funded programmes for HIV, tuberculosis, malaria, and family planning failed to meet expectations, achieving a fill rate of 79 percent, stilll below the 90 percent benchmark.

Ms Gathungu noted that Kemsa’s performance has been undermined by multiple systemic challenges, including reduced capital investment, limited stock availability, inefficient logistics, and rising operational pressures.

‘Between FY 2019/20 and FY 2024/25, Kemsa’s capital order fill rates were 69 percent, 54 percent, 50 percent, 51 percent, 52 percent, and 41 percent, consistently falling short of the 90 percent target,’ she said.

Meanwhile, a Sh499.7 million integrated computer system intended to link all Kemsa warehouses in real time and enable regional order processing remains incomplete. The system, contracted in November 2023, was only 70 percent complete by May 2025, one year past its deadline, raising concerns over value for money.

Distribution inefficiencies are further compounded by underutilised infrastructure. Of Kemsa’s seven regional warehouses, only the Kisumu facility is partially operational. The remaining depots in Eldoret, Mombasa, Nyeri, Meru, Kakamega, and Nairobi’s commercial street function merely as passive storage sites without distribution capacity.

Banks expect the Central Bank of Kenya (CBK) to raise its benchmark rate for the first time since February 2024, in response to a spike in inflation and emerging currency pressures following the Iran war, which is likely to trigger an increase in borrowing costs.

The move would impact borrowers, reversing a recent trend in which the cost of loans has softened due to falling inflation and adoption of a more transparent pricing model.

The banking sector lobby- the Kenya Bankers Association (KBA)-expects CBK to raise the key reference rate next month when the apex bank’s monetary policy committee meets on June 9.

The bankers lobby remains fretful of weaker purchasing power following a surge in inflation and expects the rise in cost-of-living measures to dampen demand for loans and escalate loan defaults.

Last month, CBK paused its rate-cutting cycle on Wednesday, keeping its benchmark lending rate at 8.75 percent to monitor second-round effects from a surge in global energy prices triggered by the Iran war.

The decision followed 10 consecutive rate cuts.

April inflation rose at the quickest pace in seven years to 5.6 percent from 4.4 percent as the global oil price shock hit home.

A further rise in fuel prices in May is seen pushing the change in consumer prices closer to the 7.5 percent ceiling.

‘All indicators from fuel to consumer prices are showing that there is going to be a markup in the Central Bank Rate (CBR),’ said Raimond Molenje, Kenya Bankers Association (KBA) chief executive officer.

‘All eyes will be on CBK, and we expect pressure to raise the CBR as we look at rising inflation in the economy and a test on currency stability.’

Kenya’s inflation rate has climbed above the preferred mid-point of five percent, pointing to underlying consumer cost pressures, but the shilling has largely held steady, keeping within a narrow range of Sh129 and Sh130 against the US dollar.

A further escalation in inflation and/or volatility in the Kenya shilling could force CBK to react with an upward recalibration to the CBR.

This would immediately lift the cost of borrowing as most banks have pegged pricing on the CBK benchmark rate.

Nearly three-quarters of banks snubbed use of the new risk-based pricing formula and instead adopted CBR as their pricing benchmark.

An analysis of bank disclosures shows that 27 of 37 banks opted for the CBR as their key reference rate, with only a minority opting for the Kenya Shilling Overnight Interbank Average (Kesonia).

The adoption of the revised risk-based pricing model has created transparency while also aligning bank interest rates with the CBK benchmark, shortening the translation period between when CBK recalibrates the rate and when banks adopt it.

Commercial banks’ interest rates have eased in line with the improved pricing metric and lower inflation.

Average lending rates eased slightly in March to 14.7 percent from 14.8 percent in February 2026.

Private sector credit growth continued to strengthen and reached 8.1 percent in March 2026 from 7.4 percent in February, and from a contraction of 2.9 percent in January 2025.

Banks, however, continued to struggle with asset quality, where the ratio of gross non-performing loans to gross loans climbed to 15.6 percent in March from 15.4 percent in December 2025.

A rise in the CBR is expected to impact not just borrowing costs but also private sector credit growth and non-performing loans, likely to make all three metrics worse.

KBA, however, says it is more worried about the health of the consumer, where a deterioration will dampen the demand for new loans faster and hasten the drop in industry asset quality.

‘The biggest worry we have is on purchasing power in the economy because you could have an economy where borrowing rates are up, but people are consuming more,’ added Mr Molenje.

‘It’s not such a big hit when interest rates go up, but consumer demand is sustained. The challenge right now for government and policymakers is to ensure that prices don’t go up. The challenge is when items like fares go up, it’s very difficult for them to come down, even when oil prices are turned down.’

CBK had been on a rate-easing cycle from August of 2024 to April this year and has not raised the key benchmark rate since February 2024.

Kenya trails other African economies in introducing energy-saving measures, including use of public transport, work-from-home practices and limits on travel to shield consumers from soaring energy costs.

A tracker from the International Energy Agency (IEA) shows that Egypt leads on the continent with measures such as asking the public to limit fuel usage, cutting travel by State officials, and working from home for government employees.

Ethiopia, Mauritius, Mozambique and Senegal have also asked their citizens to avoid unnecessary travel and other fuel-consuming activities.

Tanzania has ordered government officials to travel collectively in buses, while Madagascar declared a state of emergency for 15 days.

Other countries have shut schools or reduced days spent in classrooms and launched campaigns asking the public to be “frugal” in use of fuel.

The measures help in conserving fuel stocks amid supply disruptions as well as reduce energy bills.

Kenya is missing from the IEA tracker on government actions to conserve energy, with the country turning on tax cuts and subsidies to ease the surge in fuel prices.

Rising fuel prices have triggered deadly protests in Kenya and forced countries across Africa to take emergency measures, as a deepening energy crisis drives severe disruption across the continent.

Diesel and petrol prices at the pump have surged in recent weeks, as the economic shock of the war in the Middle East starts to reach consumers across sub-Saharan Africa.

Spiraling fuel prices have turned out to be the biggest headache for the Kenya government, despite concerns that failure to conserve fuel could haunt the economy in the coming months if disruptions of the Middle East war persist.

‘This is increasingly a ‘higher for longer’ environment, which we expect to last for the next few months,’ Mark Russell, CEO of Puma Energy, was quoted by Financial Times.

Puma Energy operates more than 700 fuel stations in Africa and 2,200 globally and many other oil firms are smarting from the supply disruptions.

Countries such as Malawi have depleted their strategic supplies of diesel and petrol, while Mozambique is grappling with a severe supply crisis, mainly in the capital, Maputo.

Iran’s blockade of the Strait of Hormuz, where nearly a quarter of the world’s fuel passes, and attacks on major refineries in the Gulf region have led to the supply crisis.

Kenya was nearly plunged into a shortage of petrol last month when one of the vessels carrying 85,000 metric tons of the fuel was unable to leave the port of Jebel Ali in the United Arab Emirates.

But the country shipped in an emergency cargo outside the government-to-government (G-to-G) framework with three Gulf oil majors, helping avert the crisis.

But the G-to-G suppliers have already warned that they have been forced to source fuel from alternative places outside the Gulf region, signaling that Kenya could face a supply crisis if the Middle East war does not stop in the coming months.

Four Kenyans died over the price of moving fuel. A war 6,000 kilometres away rewrote the cost base of every business in this republic overnight.

A maritime chokepoint nobody in Nairobi voted for, nobody in any founder’s morning routine could have prevented, quietly swallowed the margins that months of grinding had built.

The country paused for two days. Not metaphorically. The kind of pause where cold chains break, logistics stall, and a family in Kwale quietly recalculates dinner.

No founder hustled their way out of that week.

That is the opening premise of this column, and I want to sit with its discomfort before offering a resolution.

The most dangerous thing I could do is rush to the lesson. The wound needs to be named first.

Here is what this column is not arguing. It is not arguing that hard work is a lie, that discipline is a performance, or that the founders grinding through hostile conditions should stop. That would be its own kind of cruelty, advising stillness to people for whom motion is survival. Hustle is real. The problem is not hustle. The problem is the story we built around it.

The story went like this. If you outwork the room, the room eventually rewards you. Wake earlier. Sleep later. Carry more than your share. Survive on conviction. In Africa, the founder who suffered most was treated as most deserving of success. Hustle was not a strategy. It was a moral position. A theology, almost.

That theology did not save the cold chain founder watching her margin dissolve before her morning tea. It did not move the fuel review. It did not open the shipping lane.

Call it the hustle ceiling. The invisible altitude above which no amount of individual effort can climb, because the factors of production that determine outcomes, energy, currency, interest rates, capital access, regulatory discretion, and inherited networks, never belonged to the founder. We sometimes forgot. The harder we worked, the more completely we forgot.

The strongest counter-argument is this. What else would you have founders do? Sit down? The networks may be biased, the capital may recognise certain faces before others, the conditions may be hostile, and yet, if the hand goes down entirely, nothing moves at all.

This is the honest place where the argument sharpens into something that cannot be resolved cleanly. You cannot stop hustling. You cannot fully trust it either. Both are true at the same time, and collapsing one to make the other comfortable is the dishonesty this column refuses.

Whole generations of African founders have been grinding inside a system that quietly rigged who would scale and who would only ever survive. The grinding was necessary. The grinding was also never sufficient. Holding both truths without flinching is the beginning of a different operating system.

This week, a thread in our FBX founder community made me laugh, then think. Someone asked, in genuine confusion, what kerosene is still used for.

The replies arrived fast and merciless. One member noted the question was almost a confession of class. Another wrote that kerosene was still the original multitasker, lighting homes and cooking dinner in places no fuel review ever reaches. A third compared it to asking what a landline is for.

The exchange was funny. It lingered. We are not all hustling on the same playing field. Some founders are modelling diesel hedging strategies while millions of Kenyans are calculating whether tonight’s meal can be cooked at all. The hustle myth flattens that gap, and the flattening is itself violence. It tells the family in Kwale that the gap is a motivation problem.

It is not. Some weeks ago, I had dinner at a restaurant in a city I love. On a weathered wall hung a Hamsa, the open hand that crosses Islamic, Jewish, and North African traditions. Five fingers raised. An eye on the palm. Dense, illegible script swirling around it, like noise pressing in from every direction. I did not think of the image again until this week, when I needed it.

There are two hands a founder lifts. The hustle hand is clenched. It performs. It grinds. It mistakes motion for meaning. It wakes at four, answers every message, misses dinner, and quietly resents its own discipline.

The Hamsa is the other hand. Open. Watchful. It does not claim to control what surrounds it. It holds its shape against the noise. Composure, not exhaustion. Awareness, not speed.

The maturing founder learns which hand to lift, and when.

The hustle hand still has its hours. The Hamsa hand carries you through weeks that the hustle cannot reach. The mindset that refuses to read a market shock as a personal verdict. The emotional honesty to admit fatigue rather than perform optimism.

The social instinct is to lean into trusted peers rather than disappear into isolation. The strategic patience to absorb before reacting. The spiritual conviction that the work still has meaning, even when the system insists otherwise.

Nobody names the second-order consequence of the hustle gospel. What breaks first is not the business. It is the founder who confused suffering with strategy. So how do you wake up on a week like this one?

Not because the world cooperated. Not because hard work was rewarded. You wake up because something inside you has stopped confusing exhaustion with virtue. You make the call you did not want to make.

You protect what moves the needle. You hold your shape.

That is the entire deliverable for some weeks, and it is enough.

The hustle was never the whole game. The founders who last finally learn the rest of it.

The grinding opens doors. The open hand decides what you carry through them.

Supermarkets are today full of drinks that claim to be good for your stomach. Products such as kombucha, probiotic yoghurts, fibre-infused juices and prebiotic sodas are marketed as good for your health with claims that they support digestion, ease bloating and boost immunity. But how much of what they promise is actually backed by science?

‘Probiotics are essentially beneficial microorganisms, including both bacteria and fungi, that originate from the foods and drinks we consume,’ explains Dr Huzefa Iqbal, a senior medical practitioner at Halcyon Multispecialty Hospital.

Prebiotics act as food for these microorganisms.

“They are mostly found in fibre-rich foods, which are digested by the good bacteria and help them grow and stay active in supporting normal gut function,” explains Irene Jahenda, a nutritionist from Placid Nutrition Centre.

When used correctly, prebiotics and probiotics have scientifically proven benefits for gut health.

“Remember, they are good bacteria, so they balance the harmful bacteria that we ingest in the gut,” says Dr Iqbal. “They do this by competing for space and nutrients within the digestive system and stabilising the pH, which helps limit the overgrowth of bad bacteria.”

According to Dr Huzefa, this balance can help prevent or reduce certain digestive issues, including different forms of diarrhoea.

“From diarrhoea caused by infections and medication to people struggling with irritable bowel syndrome (IBS), prebiotics and probiotics help reduce inflammation and minimise toxins from the harmful bacteria causing the diarrhoea,” he says.

Moreover, they might help boost the immune system in the body.

“Fun fact: around 70 percent of immune cells are found in the gut,” says Dr Huzefa. Therefore, a healthy gut has a direct impact on how effectively the immune system functions.

However, experts note that not all supermarket drinks that are promoted as good for gut health are beneficial.

“For them to work meaningfully in our bodies, they need to contain a certain quantity of live cultures,” says Irene. “The beneficial threshold is usually around 15 to 20 billion colony-forming units.”

The intended use of the product and the type of strain involved are other factors that determine effectiveness. According to experts, different probiotic strains offer different health benefits. One of the more common strains is Lactobacillus rhamnosus GG, which can help to prevent diarrhoea.

The nutritionist also says that added sugars can lower the overall effectiveness of probiotic and prebiotic drinks.

“They are generally added to improve taste and boost sales, but too much sugar can weaken the probiotics and interfere with the very benefits consumers are trying to achieve. Excess sugar can also promote inflammation within the digestive system and increase the risk of sugar spikes or high blood sugar levels,’ she says.

While some people may benefit from these drinks, experts say they can also have adverse effects on others.

“They may actually cause digestive issues such as bloating in some people. This especially happens if the probiotics and prebiotics are unnecessary or are taken in the wrong dosage,’ says Dr Huzefa.

The doctor adds that certain groups of people should avoid these drinks entirely or only consume them under medical guidance. These include people who are immunocompromised, such as those living with HIV/Aids or tuberculosis, critically ill patients, people recovering from surgery and persons already experiencing severe digestive issues.

The doctor adds that certain groups of people should either avoid them entirely or only take them under medical supervision. These includes people who are immuno-compromised, such as patients living with HIV/Aids or tuberculosis, critically ill patients, people recovering from surgery and those already experiencing severe digestive issues.

However, while some of these drinks can be beneficial, experts advise that natural food sources are a better way to get prebiotics and probiotics. “Food provides more wholesome benefits than drinks. With a food like sauerkraut, for example, you get probiotics, fibre, vitamins, and other minerals,” says Irene.

Alternative sources of probiotics beyond processed drinks include yoghurt, mursik (fermented milk), fermented cassava flour, kimchi, sauerkraut and kefir. The most common sources of prebiotics include garlic, onions, bananas, certain oats, legumes and beans.

According to Irene, if the gut is not functioning properly, this can manifest as symptoms in different parts of the body, including acne. To promote overall well-being, she emphasises the importance of protecting the gut with a balanced diet that supports healthy bacteria.

However, the doctor cautions against unnecessarily consuming prebiotic and probiotic products.

‘If you are not in pain, you wouldn’t take a painkiller,’ he says. Similarly, if you do not have a gut issue or a doctor’s prescription, these drinks may not be necessary.’

Investors in the Talanta bond that was used to build Raila Odinga stadium will receive Sh6.5 billion from July 7 on the back of Sh24.8 billion gambling taxes.

The government last year raised Sh44.79 billion through a 15-year bond whose returns are paid from betting taxes, which are housed under the Sports Fund.

This will be the first full year payment for the investors who received their first paycheck on January 7, of an estimated Sh3.25 billion.

Proceeds from gambling taxes under the Sports Fund are expected to increase 35.3 percent to Sh24.8 billion, up from Sh18.3 billion in the last financial year, making it easier for the State to settle the bondholders.

The Sports Fund is mainly funded by taxes and levies raised from the betting industry, with the fund targeting Sh2.07 billion per month, indicating the large spending by Kenyans in gambling.

‘This reflects the projected increase in appropriation in aid collections to the Sports, Arts and Social Development Fund (SASDF). The ministry of sports projects to collect Sh2.07 billion per month,’ said National Treasury Director of Budget Albert Mwenda.

‘This includes the amount to be set aside for the settlement of the loan linked to the Talanta Stadium loan.’

The investors will on July 7, receive Sh3.25 billion being the first coupon payment of the financial year, before the second payment on January 7 of Sh3.25 billion.

The money from gamblers is received daily by a fund manager who invests it before making the scheduled coupon payments. The payout to investors includes interest and investment income earned by the fund manager.

The securitisation managers, Liaison Capital, did not disclose the exact amount paid out to investors of the bond in January, as the amount will differ in each coupon payment based on the investment income.

The bond has a 15.04 percent rate of return, which will earn investors Sh57.6 billion in interest over the life of the bond.

The interest income from the bond is tax-exempt, giving it the same status as the government-issued infrastructure bonds.

As per the information memorandum, the government has an extra three-day window to make payments before it is considered to be in default, meaning it has an effective deadline of July 10 to make the payment.

The issuer of the bond, Liaison Group, through a special vehicle, Linzi FinCo 003 Trust, has arranged a standby letter of credit with KCB Bank to be used in case of delayed disbursements from Treasury.

Proceeds of the bond were directed to the completion of the 60,000-seater stadium, which has since been renamed Raila Odinga International Stadium.

As of last week, the stadium was 91 percent complete, as per a statement by the Ministry of Sports after a site tour.

As of April last year, the stadium was 37 percent complete, with the government having paid only five percent of the construction costs.

The contractor, China Roads and Bridge Corporation, had agreed to continue being active at the site as the government sought funds. The Ministry of Defence was given supervisory powers over the project owing to the army’s reputation for prompt execution.

However, monies used by the Ministry of Defence are difficult to audit due to the sensitivity of the docket.

The Raila Odinga Stadium is earmarked as one of the grounds to host the 2027 Africa Cup of Nations (Afcon).

The National Treasury has also set aside an additional Sh1.5 billion for preparations towards the Pamoja Afcon games, which Kenya will host alongside Uganda and Tanzania.

The budget includes Sh828 million as wages for temporary employees, underscoring the magnitude of the games and the manpower needed to execute.

Printing, advertising and information supplies have been allocated Sh200 million, while insurance costs have a Sh200 million budget.

An insurance contract, worth Sh42 million for the CHAN Pamoja games hosted by the three East African countries last year, is at the centre of corruption allegations against the top hierarchy of the Football Kenya Federation.

The Treasury has earmarked Sh271 million for other operating expenses relating to the games scheduled to take place between June 17 and July 19 next year.

The Raila Odinga Stadium will serve as a main venue for the opening and closing ceremonies, as well as matches of the Afcon games.

Notably, the Sports Fund’s 10-year tenure lapses in August 2028, a year after the games, clouding the payouts of the 15-year bond, with the government yet to issue guarantees of its renewal.

The Talanta bond did not have a government guarantee, with investors relying on the Public Finance Management Act, which establishes the Sports Fund, declaring the Treasury’s obligation to take up the liabilities of the fund if it is dissolved.

Pension funds sponsored by public entities belong to contributors and are not public funds subject to State procurement laws, the Supreme Court has ruled.

In a landmark victory for the retirement benefits industry and pensioners, the apex court ruled that pension savings managed under public entity-sponsored schemes are private trust funds owned by employees and cannot be treated as public money under the Public Procurement and Asset Disposal Act (PPADA).

‘Based on what we have stated so far, we entertain no doubt that a pension fund sponsored by a public entity was not contemplated in the enactment of Article 227 of the Constitution to be an entity that was intended to undertake public procurement and thereby to be bound by the provisions of the PPADA,’ the court said.

The country’s top court overturned earlier decisions by both the High Court and Court of Appeal, which had held that pension schemes linked to public institutions qualified as public entities because of their public function and State oversight.

The Supreme Court instead found that Section 2(o) of the PPADA unconstitutionally expanded the meaning of a public entity beyond what was envisaged under Article 227 of the Constitution.

‘Ultimately, we find merit in the appeal and accordingly allow it. We set aside the judgment of the Court of Appeal dated April 28, 2022, and in terms of Article 2(4) of the Constitution, declare Section 2(o) of the PPADA inconsistent with Article 227(1) of the Constitution and therefore void to the extent that it subjects pension funds for a public entity to the application of public procurement systems,’ the judges ruled.

The case was filed by the Association of Retirement Benefits Schemes, representing pension schemes, employers and service providers in Kenya’s retirement benefits industry.

The association challenged the constitutionality of Section 2(o) of the PPADA after pension funds sponsored by public entities were required to comply with public procurement laws in the disposal and acquisition of assets.

The association argued that pension schemes are established as irrevocable trusts under the Retirement Benefits Act and are fundamentally private arrangements between employees and trustees.

According to the association, employers merely remit contributions as part of contractual obligations, while the funds remain autonomous entities separate from sponsoring public institutions.

The association told the court that subjecting such schemes to procurement laws imposed ‘onerous responsibilities’ with severe financial implications for retirees and beneficiaries.

They also argued that the law discriminated against pension funds linked to public entities, because private sector pension schemes were exempt from the same requirements despite operating under the same legal framework.

According to the association, the additional compliance burden increased administrative costs and ultimately reduced members’ retirement benefits, infringing on constitutional protections for property rights and equality.

The Retirement Benefits Authority (RBA), which had initially supported the petition before the High Court and the Court of Appeal, later changed its position before the Supreme Court, stating the constitutionality of the challenged section.

The Authority argued that procurement oversight was necessary to prevent corruption and mismanagement of pension savings.

RBA maintained that pension schemes sponsored by public bodies served a public interest because they involved contributions from public employees and employers. It also argued that procurement safeguards promoted transparency, accountability and good governance.

However, the Supreme Court criticised the Authority’s shift in position and rejected the argument that State regulation automatically transforms pension funds into public entities.

The judges held that pension schemes, whether public or private, are savings vehicles managed independently by trustees solely for the benefit of employees.

‘It was therefore in error for the two courts below, to conclude that pension funds perform duties of a public nature and are public bodies,’ the court stated.

The judges emphasised that once pension contributions are remitted into a scheme, they cease to be public property and instead become private trust funds belonging to employees.

‘This legal structure effects a fundamental transformation. Once the contributions are made into an employee’s account in the scheme, it ceases to be public property. They become part of a private trust fund, held and managed by trustees for the exclusive benefit of the members,’ the court said.

The court further noted that trustees and administrators of pension funds do not perform government functions and are not paid from the Consolidated Fund or through parliamentary appropriations.

The court warned against equating pension savings with public funds merely because the employer is a public institution.

‘With this autonomy, it matters not that the sponsor is a public entity. Pension, just as a salary, is a benefit to the employee,’ the court observed.

‘Extrapolating the findings of the courts below would be absurd, as that would be tantamount to asserting that merely because an employee earns a salary from a public entity, then the employee’s expenditure should equally be regulated as part of public funds.’

The court distinguished between regulatory oversight and direct State control, saying the Retirement Benefits Authority’s supervisory role did not make pension schemes instruments of government.

‘The test requires more than mere regulatory oversight; it requires such a degree of control that the entity can be seen as an instrumentality of the State. The retirement benefit schemes lack this character,’ the judges ruled.

The Supreme Court also found that Article 227 of the Constitution was intended to govern public procurement involving taxpayer-funded entities and State organs, not private pension savings.

‘There was never any intention by the makers of the Constitution to include private enterprises and private pension funds, and in particular a segment of the funds sponsored by public entities, as part of the public finance and funds,’ the court stated.

Cable Experts Limited (CEL) has offered to acquire a 68.37 percent stake in beleaguered East African Cables, saying it will clear the firm’s bank loans that pushed it into administration.

CEL has offered to buy the stake held by Cable Holdings Limited, a subsidiary of TransCentury Limited, the parent company of East African Cables (EA Cables), which is also under receivership.

The investor, which says it has experience in the cable business, plans to revive EA Cables and repay the Sh1.94 billion debt owed to Equity Bank Kenya that led to the company being placed under administration and its shares suspended from trading on the Nairobi Securities Exchange (NSE).

‘Cable Experts Limited (CEL), a company incorporated in Kenya, has on May 19, 2026 entered into a share purchase agreement for the acquisition of the entire 68.37 percent stake in East African Cables Plc (under administration) held by Cable Holdings Limited, a wholly owned subsidiary of TransCentury Plc (in receivership),’ CEL said in a public notice.

‘The acquisition constitutes a rescue acquisition that enables East African Cables to continue as a going concern, including through the retirement of its existing secured bank indebtedness,’ the company added.

EA Cables was placed under receivership in June last year by Equity Bank Kenya after defaulting on a loan and failing to honour a demand notice issued in June 2023.

Its shares were suspended from trading on the NSE immediately after the lender took control.

CEL, which is seeking exemption from making a mandatory offer for the remaining 31.63 percent stake, said it would pursue the resumption of trading in the company’s shares.

‘CEL has sought CMA’s direction under Regulation 28 of the Take-over Regulations confirming the continuation of the suspension and has proposed an agreed pathway for the orderly resumption of trading following completion,’ the company said.

The transaction requires approval from the Capital Markets Authority (CMA) and the Competition Authority of Kenya.

At the time trading was suspended, East African Cables shares were trading at Sh1.71, valuing the company at Sh432.8 million. At that price, the 68.37 percent stake, which is equivalent to 173,071,149 shares, is worth about Sh295.9 million.

CEL said it does not own any shares in East African Cables and is not acting in concert with any shareholder in the company.

The appointment of Adan Mohamed as Commissioner General of the Kenya Revenue Authority (KRA) marks more than just a leadership transition at Times Tower. It signals recognition that KRA’s challenges today are increasingly about the economy and no longer purely about tax administration.

Kenya’s tax environment has changed dramatically over the last few years. First, going by what we witnessed two years ago with the Gen Z led protests and even as recent as this week’s matatu strike, revenue collection has become very politically sensitive.

In addition, businesses are under pressure from high operating costs, and taxpayers are increasingly vocal about compliance burdens and aggressive enforcement.

On the other hand, government financing needs continue to rise sharply, with Treasury relying heavily on KRA collections to finance an expanding national budget and debt obligations.

In this environment, the traditional profile of a tax administrator is no longer sufficient. A KRA Commissioner General must understand how businesses make decisions, how investors react to policy uncertainty, how financial systems work and how economic activity ultimately drives sustainable tax revenues.

That is why Mohamed’s appointment stands out. His background combines something rarely found in public institutions: deep private-sector financial experience alongside a long record of public-sector reform and economic management.

Before entering government, Mohamed built one of the most successful executive careers in Kenya’s banking sector. He became the youngest managing director of a multinational bank in Kenya when he took over Barclays Kenya at the age of 38.

Running banking operations across multiple African markets meant dealing directly with regulators, investors, compliance systems, monetary policy environments and cross-border business realities. That experience becomes highly relevant for KRA at a time when investor confidence and tax policy are becoming increasingly intertwined.

Today, KRA is no longer simply collecting customs duties and corporate taxes. It is dealing with digital transactions, fintech platforms, cross-border commerce, betting taxes, virtual assets, data-driven enforcement systems and increasingly complex compliance frameworks. The authority is becoming more technology-driven and more economically consequential.

That requires leadership capable of understanding the broader economy, not just tax procedures.

Mohamed’s record in government also explains why the board may have viewed him as uniquely suited for the role. During his years overseeing trade, industrialisation and regional integration, Kenya undertook some of the most ambitious business and regulatory reforms in its recent history.

The country improved from position 136 to 56 in the World Bank Doing Business rankings within five years, becoming one of the world’s most improved reformers during that period.

His tenure also coincided with major reforms in business registration, insolvency laws, trade facilitation, special economic zones and digitisation of government services. These reforms were not merely bureaucratic exercises. They were aimed at making Kenya more investment-friendly, improving enterprise growth and supporting formal economic activity.

Mohamed’s background in industrialisation and SME development may also prove relevant as KRA attempts to widen the tax base. Under programmes initiated during his tenure, SME financing expanded, export-oriented manufacturing grew, industrial parks were developed and investment mobilisation accelerated across several sectors.

This matters because Kenya’s future revenue growth will ultimately depend less on squeezing existing taxpayers harder and more on growing formal economic activity itself.

KRA is also entering a period of major internal transformation. Systems such as eTIMS, automation of compliance functions and expanded use of data analytics are changing how the institution operates.

While digitisation is necessary for reducing leakages and improving efficiency, it has also increased complexity for many SMEs and smaller taxpayers.

Managing that transition will require not only technical understanding, but also organisational leadership and change-management capability.

Ultimately, the Board’s decision reflects an understanding that KRA’s future success depends on more than enforcement targets. Its next leader therefore needed to be someone capable of operating comfortably in the intersection of economic growth, public trust, and the overall business environment. This is where Adan Mohamed’s career has largely been built around.