Category: Business Daily

The Court of Appeal has set aside an undertaking directing Imperial Bank of Kenya (IBL) to pay Mombasa tycoons Ashok Doshi and Amit A. Doshi about Sh1 billion, as they seek to recover deposits from the collapsed lender.

A three-judge bench faulted the High Court judge for ruling that a consent recorded in July 2016 bound IBL and Central Bank of Kenya (CBK) to pay the depositors if they succeeded in their case.

The appellate court said that from the moment IBL was placed under receivership, a moratorium on all payments to, or preferential treatment of, depositors and other creditors outside the framework of the law took effect and remained in force.

‘It is also not lost on us that section 56(3) of the Act is emphatic that no attachment, garnishment, execution or other method of enforcement of a judgment or order against an institution placed under liquidation, or its assets, may take place or continue,’ the court stated.

The court emphasized that sections 33 and 57 of the Act clearly define the framework for payment of claims by the liquidation agent. The provisions do not classify debts owed to depositors who have filed claims in court, or those with secured judgments, as eligible for priority over other creditors.

‘Those principles apply in equal measure to the winding up and liquidation of banking institutions as was the case here. In our considered view, the learned Judge erred in granting the impugned orders with the aim of breathing new life into the terms of the consent agreement entered into when the 2nd appellant (IBL) was still in receivership,’ the court said.

The court added that any undertaking by IBL after being placed under liquidation would violate section 56(3) of the Act.

In November 2022, the High Court had allowed the Doshi brothers’ application that IBL should not be placed under liquidation until CBK and IBL deposited $7,277,314 in a joint interest-earning account in the names of their advocates as security.

Alternatively, the court ruled that CBK should undertake to pay the depositors if they won the case.

Mr Andrew Rutto, a liquidation agent at the Kenya Deposit Insurance Corporation (KDIC), stated in an affidavit that the High Court’s orders amounted to granting preferential treatment to Mr Doshi. He said depositors are required by law to lodge and prove their claims with the liquidator, as provided under section 33 of the KDIC Act.

Mr Doshi opposed this, arguing that CBK was avoiding giving the undertaking to allow IBL’s liquidation to proceed, leaving only a shell incapable of paying them if they prevailed.

‘In our considered view, the learned Judge erred in granting leave to the 1st and 2nd (Doshi) applicants to have subsequent applications and the main suit heard when Imperial Bank was still in liquidation,’ the appellate court said.

The payment of Sh244.5 billion to the Treasury for the sale of a 15 percent stake in Safaricom Plc to the parent firm, Vodacom Group, will take longer after the High Court extended a freeze on the transaction.

A bench of three judges of the High Court ruled that plans for the sale of the Safaricom stake should await the determination of the petitions filed by four Kenyans.

The court dismissed claims by the government that stopping the transaction would affect investor confidence.

‘Consequently, we do not buy into the argument that a constitutional adjudication automatically results in loss of confidence by investors,’ the judges said.

‘Such an argument, if accepted by this court, would lead to immunity from judicial review for public dealings because those dealings are economically motivated. That argument would run the supremacy of the Constitution afoul,’ the judges added.

Court setback

Vodacom had indicated readiness to wire the billions of shillings to Kenya in anticipation that the High Court would lift the freeze on the deal.

This means that the deal will drag on, putting the State in line to receive a Sh16 billion dividend from the 15 percent stake if Kenya remains with full ownership of 35 percent into August.

The pause on the transaction has delayed the payment of Sh244.5 billion to the Treasury, including Sh40.2 billion in advanced dividends from what would be the government’s residual 20 percent stake in the Nairobi Securities Exchange-listed firm.

‘We expect an update on this ruling on May 18, 2026. Pending this outcome, we’ll be able to finalise the deal very quickly,’ said Vodacom chief executive officer Shameel Joosub in a May 11 earnings call.

‘If the conservatory orders are not lifted, the court case will continue, and it could take a few more months. So, we are a little bit in the court’s hands, and we will see what the court decides,’ he added.

The transaction was frozen when petitioners Tony Gachoka and Fredrick Ogola sued several State agencies, Safaricom and Vodacom, questioning the legality of the government’s plan to reduce its stake in the telecoms giant.

The government defended the process, saying the proceeds of sales would be invested in an infrastructure fund and utilised prudently for public goods, and reduce the country’s debt burden.

It reckoned that the petitioners sought to stop a statutory-mandated process under Section 87A of the Public Finance Management Act and that the sale had already gone through a parliamentary process and public participation.

The judges, however, said that while they appreciated the importance of economic stability and investor certainty, constitutional compliance cannot be subordinated to commercial convenience.

‘A quick reminder is that investor confidence in a constitutional democracy like ours is not founded upon the unchecked exercise of public power, but upon the assurance that the government acts within the confines of the Constitution and the law,’ said the court.

The court case was filed as analysts and politicians debated the merits of the government’s partial divestment from Safaricom, with a major issue being whether the State will get full value from the sale price of Sh34 per share.

Some argue that the deal is good for Kenya, while others have been sceptical about the benefits of the transaction, seeing Vodacom as the winner after getting majority control of the profitable telecoms operator.

A joint parliamentary committee had approved the sale, paving the way for the conclusion of the transaction before the litigants struck.

Deal economics

Under the deal, the Treasury is to receive Sh204.3 billion for the 15 percent stake, representing a price of Sh34 per share.

The exchequer is also to receive a Sh40.2 billion dividend top-up, representing a loan backed by what will be Kenya’s remaining 20 percent stake in Safaricom.

The delayed sale, which had been expected to close before March, will see the Treasury collect Sh16.1 billion, representing its share of final dividends from its current 35 percent stake when book closure happens on August 4, if the transaction remains on pause.

Vodacom has insisted that the completion of the stake purchase fully rests on the court decision.

Concurrent to the purchase of the 15 percent stake from the government, Vodacom is also buying a five percent stake in Safaricom that is held by its parent firm, Vodafone Group, at the same price of Sh34 per share.

Once the twin deals are sealed, Vodacom will raise its ownership in the telecoms operator to 55 percent, attaining majority control.

Funding limbo

Earlier in May, Safaricom raised its per share final dividend to Sh1.15 from Sh0.65 previously after its net profit rose 67 percent to Sh95.6 billion.

The government’s share of dividends from Safaricom for the period to the end of March, including an interim dividend of Sh0.85 per share, is Sh28.04 billion.

Proceeds from the transaction are expected to flow to the National Infrastructure Fund (NIF), a vehicle designed to finance large-scale infrastructure expansion, including roads, railways, energy and water systems.

The Treasury indicated that there was no pressure to rush the deal as the funding is not a pressing budget issue.

The recent debate surrounding French President Emmanuel Macron asking attendees at an Africa-France summit to maintain silence while speakers addressed the room, sparked a deeper conversation far beyond conference etiquette.

To some, it symbolised colonial arrogance; to others, it was a call for order and professionalism. But perhaps the real issue is not Mr Macron.

May be the issue is Africa’s growing difficulty in balancing historical awareness with present-day accountability.

History undeniably matters. Great African leaders such as Kwame Nkrumah, Thomas Sankara and Nelson Mandela existed within complex geopolitical realities shaped by foreign interests, ideological battles, economic competition and global power structures.

To deny this entirely would be intellectually dishonest. But there is another danger emerging across parts of the continent: the temptation to explain every present dysfunction exclusively through external interference. At some point, a society must ask itself difficult internal questions.

Not every challenge is colonialism. Not every criticism is oppression.

Not every disorder is externally orchestrated. Sometimes accountability is necessary. Even conversations around xenophobia reveal this tension. Increasingly, there are narratives suggesting that Africans are merely being manipulated into hating one another by hidden external powers.

While external influence can exist in global politics, reducing all internal conflict to outside manipulation risks removing personal and collective responsibility entirely.

Nations are not only destroyed by oppression. They are also weakened by corruption, tribalism, institutional fragility, emotional reactionism, poor leadership culture, and the inability to self-correct. True liberation, therefore, cannot remain purely political rhetoric.

It must also become: mental, structural, economic, institutional, and spiritual.

A continent cannot rise globally while rejecting discipline, professionalism, emotional maturity and accountability in public spaces.

The future of Africa will not be built merely by identifying who hurt us, it will be built by deciding who we are becoming.

The Employment and Labour Relations Court has upheld the dismissal of a former Co-operative Bank of Kenya relationship manager accused of helping fraudsters reactivate dormant customer accounts, including one belonging to a deceased client.

The court also ordered the former manager, Amos Koech, to repay the bank a Sh2.9 million staff loan following dismissal over suspicious viewing of customer accounts and alleged involvement in fraud.

Dismissing Mr Koech’s claim, the court found that Co-op Bank had valid grounds to fire him over suspected fraud and breach of customer confidentiality rules. He was a relationship manager in the bank’s Diaspora Banking Unit.

Mr Koech had sued the bank in December 2023 seeking compensation for unfair dismissal, gratuity, 12 months’ salary compensation amounting to Sh2 million and an order compelling the bank to lift the suspension of his banking licence.

He argued that the bank unlawfully and maliciously terminated his employment in November 2020 despite his explanations to allegations linking him to fraudulent activities involving customer accounts.

Court documents show Mr Koech joined Co-op Bank in May 2013 as a graduate clerk at the Lang’ata branch before rising through the ranks to become a relationship manager in July 2020.

Bank’s defence

However, the bank told the court that investigations established that the employee improperly facilitated activation of dormant accounts targeted by fraudsters impersonating genuine customers.

One of the accounts belonged to a deceased customer. The bank said that fraudsters attempted to reactivate an account using forged documents, including a purported prison discharge certificate, to falsely explain why the dormant account had remained inactive.

According to the bank, Mr Koech contacted officials at the Kimathi branch and facilitated activation of an account under suspicious circumstances despite knowing the purported account holder was an impostor.

The bank also accused him of helping fraudsters activate another dormant account belonging to a customer at the bank’s Kariobangi branch.

It was said that this account was later targeted by impostors who allegedly conducted unauthorised transactions that caused financial loss.

Co-op Bank said audit trails and system logs showed the employee accessed sensitive customer accounts unrelated to his duties and breached the lender’s confidentiality and ethics policies.

Court’s findings

‘The court is satisfied that suspicion of fraud in a banking environment, supported by audit logs and internal investigation findings, constitutes a valid and fair reason for dismissal,’ said the judge in Nairobi.

The court held that banking employees hold positions requiring high levels of integrity and accountability because of the sensitive nature of financial institutions.

The former manager denied sharing confidential customer information with outsiders and maintained that he had not participated in any fraudulent scheme.

However, during cross-examination, Mr Koech admitted that he viewed accounts outside his mandate and acknowledged that such access breached the bank’s code of conduct.

He also confirmed attending a disciplinary hearing and signing minutes of the proceedings.

The court found that the bank complied with procedural fairness requirements under employment law by issuing a show-cause letter, conducting a disciplinary hearing and allowing the employee to appeal the dismissal.

‘The evidence before the court shows that the claimant was suspended, issued with a notice to show cause which he responded to in writing, invited to a disciplinary hearing and finally informed of the outcome,’ the court said.

The verdict

It rejected the former employee’s argument that he was unfairly dismissed and declined all claims for compensation and gratuity.

The court found that the employee was not entitled to service pay because the bank had been remitting provident fund and National Social Security Fund deductions during his employment.

Also dismissed was his request for reinstatement of his banking licence, saying the court lacked jurisdiction and noting that the employment relationship ended in 2020.

The court also allowed the bank’s counterclaim seeking recovery of an outstanding staff loan of Sh2.9 million issued to Mr Koech in June 2019, plus contractual interest.

Co-op Bank argued that its staff manual allowed recall of employee loans once employment ended and said the former employee had defaulted after dismissal.

The court noted that Mr Koech did not dispute the outstanding balance or challenge the counterclaim during the proceedings.

The Kenya Revenue Authority (KRA) has netted Sh7.8 billion this year from 97,000 individuals and entities that were not paying taxes previously as the taxman makes modest progress on revenue base expansion to reach hard-to-tax sectors such as MSMEs.

The KRA has credited the new receipts to recent interventions, including the digitisation of services, which have improved how taxes are assessed, collected, and monitored.

The government is backing the KRA tax base expansion to prop up domestic revenue mobilisation against difficulties in adopting aggressive tax measures.

Widespread opposition to tough taxation measures has shifted the responsibility for mobilising higher domestic revenues from the National Treasury and the National Assembly to the KRA.

‘Just looking at this year, from people who have never paid a single shilling in direct tax, by now they have paid Sh7.8 billion,’ said George Obell, the KRA Commissioner, Micro and Small Taxpayers.

‘That is just 97,000 taxpayers who have come on board. They had never paid a single coin, but in four months they have now paid Sh7.8 billion and they have done it voluntarily.’

The KRA has pushed to reach the hard-to-tax economic sectors through changes, mostly to the Tax Procedures Act, amid backlash on the creation of an all-powerful tax czar. The Treasury has empowered the KRA to go after the hard-to-tax sectors amid a trend where most businesses and jobs are being created in the informal sector.

‘The hard-to-tax sectors are characterised by informality, limited record keeping, lack of visibility of transactions by taxpayers in these sectors and inadequate regulation. Most players in these sectors believe that they are not obligated to pay any taxes on self-generated incomes, leading to high levels of non-compliance,’ the Treasury said in its medium-term revenue strategy report.

Proposals contained in the Finance Bill, 2026, seek to further embolden the taxman, including allowing the KRA to issue an assessment on the income of a person relying on third-party data and generation of pre-populated returns based on information available to the agency.

The KRA has cited digital transformation as the key driver for the emerging tax base expansion. ‘Historically, our tax administration model was heavily manual, fragmented and transaction-based. Compliance relied substantially on physical interactions, paperwork and post-transaction audits,’ added Mr Obell.

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.