Category: Business Daily

The use of trial-and-error to guess login credentials such as usernames and passwords to steal sensitive data or cash surged to 46.38 million attacks in Kenya in the three months to March, as the country shifts to cloud-based services.

The Communications Authority of Kenya (CA) said cases of persistent guessing of login credentials or encryption keys until the correct combination is found, technically called brute-force cyberattacks, increased 8.4 percent to 42.8 million recorded in the previous quarter.

These cases are increasingly targeting critical information infrastructure such as cloud service providers and government systems, the watchdog said. The latest figure marks the highest number of brute attacks Kenya has ever recorded in a single quarter and brings the total such threats detected over the past year to more than 128.8 million.

Attackers are primarily targeting database servers and user authentication systems, exploiting weak credentials, unpatched systems, and misconfigured remote access services.

The criminals then steal personal or financial information from databases and emails, deploy malware or ransomware, and hijack systems for further attacks.

‘Over the period, attackers increasingly targeted IoT (internet of things) devices and remotely accessible systems through exposed Telnet ports, misconfigured RDP services and vulnerable libssh versions,’ the CA said in its latest cybersecurity report.

The spike in the attacks comes as the overall number of cyber threat events declined by 26.15 per cent compared to the October-December 2025 period, suggesting a shift by criminals to more focused and persistent attack methods.

It also comes as Kenya positions itself as a regional technology hub and adopts a ‘cloud-first’ strategy for the delivery of public services.

Hackers stole a record Sh1.59 billion from Kenyan banks in 2024 in an attack that highlights the risk of cyber heists in the wake of heavy investment in tech and mobile banking.

Cyberthieves stole Sh810.68 million last, from Sh182.41 million a year earlier, through mobile banking -representing a jump of 344 percent.

The disclosure shows that the theft of customer deposits has grown fourfold from Sh412 million in 2023 due to fraudulent wire-transfer requests.

CBK data showed card fraud cost customers Sh263.29 million, being 16.9 times the Sh15.59 million lost in the prior year.

Computer fraud, which includes as hacking into systems to steal data, saw bank customers lose Sh203.39 million, a 2.7 times jump from the preceding year, while fraud through identity theft grew six times to Sh199.08 million.

The review period saw online banking fraud rise to Sh111.83 million from Sh106.2 million, while internet scams cost lenders Sh6.07 million up from Sh797,7000 in the prior year.

Cloud infrastructure offers virtual integration of hardware and software components such as servers, storage, networking, and management tools, to deliver cloud computing services over the internet with pay-as-you-go pricing, replacing the need for on-premises data centres.

Kenya’s Cloud Policy requires public institutions to prioritise cloud services over traditional systems. Local businesses, especially SMEs and technology startups, have also been adopting cloud computing.

Cloud infrastructure has traditionally been provided by global tech giants such as Amazon Web Services (AWS), Microsoft, and Google. Some businesses, however, have opted for locally hosted IT infrastructure due to competitive pricing, lower network latency, and access to locally based technical support.

But experts say the growing reliance on interconnected systems, alongside increased adoption of remote working in companies and government offices, is expanding the attack surface for cyber criminals, particularly in sectors handling sensitive data.

Cybercriminals use the initial entry into an organisation’s system to steal credentials, pivot within the network for higher privileges, and sometimes cause financial fraud. Privilege escalation involves increasing access rights within a network, moving from a standard user to a high-level administrator, or accessing peer-level accounts.

‘These attacks were largely enabled by compromised credentials, lack of multifactor authentication and expanded remote working, with the objective of gaining unauthorised remote access and escalating privileges,’ the communications watchdog said.

Some of the high-profile cyberattacks recorded in the country include last November, when dozens of Kenyan government websites, including the State House, Immigration Department, and the Directorate of Criminal Investigations, were defaced with extremist messages.

In July 2023, the State’s eCitizen platform was taken over by cybercriminals, which saw access to more than 5,000 government services from ministries, county governments and agencies paralysed.

The government in both cases said no data was lost during the attacks.

According to the CA, the broader cyber threat landscape is driven by inadequate system patching, low user awareness of phishing and social engineering tactics, and the rising use of artificial intelligence and machine learning tools by malicious actors.

Most people are drawn to a planter based on its colour, shape, and whether it looks right in the space they have in mind.

Magdalyne Kataa, a pot and plant seller based in Ruiru, says that such instinct is fine, but it is only half of the decision-making process and often the less important half.

‘The other half has nothing to do with aesthetics. It’s about root space, drainage, the material used, and whether the pot is suitable for the conditions in which the plant will actually live in,’ she says.

“Get these wrong, and you’ll end up with a struggling plant in a beautiful pot.”

Samuel Kungu, a pot seller based in Karen, agrees. He explains that a hanging pot that looks great on a Nairobi apartment balcony would be unsuitable for a large garden, while a wide ceramic bowl that is perfect for a slow-growing succulent would not be suitable for a fast-growing palm.

‘The moment you try to find one universal answer, you are already asking the wrong question,’ says Samuel.

So, what should you consider when picking a planter? Size is the most important factor for plant health. Magdalyne explains that roots need enough room to expand as the plant grows.

‘If you put a plant in a very small pot, it will prevent it from growing,’ she says.

The plant stalls not because there is anything wrong with the soil or the light, but because the root system has nowhere left to go. And if a plant is placed in a pot that is too large for it, the excess, wet soil will cause rotting.

Magdalyne’s rule of thumb is to match the depth and width of the pot to the plant’s growth pattern, rather than its current size.

‘Deep containers suit plants with long taproots, such as trees and tomatoes, or anything growing aggressively downward. Shallow, wider containers suit plants that spread horizontally, such as herbs, succulents, and ground-cover varieties,’ she says.

The material your planter is made of shapes the growing conditions inside it, often in ways that are invisible until something goes wrong.

‘Plastic is lightweight, affordable, and retains moisture well, making it a practical choice for plants that need consistent watering, as well as for anyone who moves their pots around frequently,’ Samuel says.

Clay and terracotta are porous, meaning water evaporates through the walls as well as the soil surface. This is ideal for plants that prefer to dry out between waterings, such as succulents, cacti, and most Mediterranean herbs. However, for moisture-loving plants, Samuel says it means watering far more frequently than planned.

‘Ceramic is well-suited to indoor plants in stable environments, but it is heavy and often expensive, and the glaze reduces breathability compared to unglazed clay. Its weight also makes it impractical for balconies or situations where it might need to be moved,’ says Samuel.

As for metal planters, they have a clean, modern look but can be problematic in an overly hot environment.

‘Metal conducts temperature efficiently, so a metal pot in direct afternoon sunlight will heat the soil to a temperature that can damage the roots. If you want to use a metal pot, keep it in the shade or use it indoors,’ advises Magdalyne.

Wood insulates roots well against temperature swings and brings natural warmth to a garden or balcony.

‘The vulnerability is moisture-untreated wood rots, particularly in high-rainfall conditions. Treated or lined wooden planters can last a long time, but they do require maintenance,’ she adds.

Fibreglass is a relatively new product on the Kenyan market.

‘Unlike clay, it gives you a lot of flexibility,’ says Magdalyne.

‘For anyone who wants both functionality and design freedom, fibreglass currently occupies the strongest position of any available material.’

Drainage

Your planter must drain.

“A pot without drainage holes creates a reservoir of stagnant water at the base of the soil that roots cannot escape. The roots sit in stagnant water, so oxygen cannot reach them, and they begin to rot.”

Magdalyne advises checking for drainage holes before buying.

For indoor plants, place each draining pot on a saucer and empty it regularly.

Match your planter to your space

Magdalyne notes that balcony-hanging pots have become one of her fastest-selling products. Troughs, long rectangular planters that hold two or three plants side by side, let you add variety without placing pots everywhere.

In a suburban home with a garden, think big, says Samuel.

‘Large statement pots anchor outdoor spaces and allow for plants that cannot live in small containers, such as trees, tall grasses, and dense shrubs,’ he explains.

Magdalyne often recommends lemon cypress in tall fiberglass pots for walkways and driveways.

However, a common mistake is overcrowding, which affects all living situations. A wall of pots overcrowded into a corner may look lush in photographs, but it struggles in reality.

‘Plants compete for light and air. Fewer pots, placed where conditions genuinely suit the plants inside them, will always outperform a crowded collection,’ says Magdalyne.

If you want a green space that doesn’t require a lot of maintenance, it’s better to have fewer large pots with slow-growing, drought-tolerant varieties than many small pots that demand regular attention.

‘Some clients will tell you, ‘I rarely stay at home, so I need something that requires minimal care,'” says Magdalyne. Matching the plant and pot to this reality is as important as any other factor.

In a brightly lit, air-conditioned godown in Nairobi’s Industrial Area, rows of workers in blue coats and hair nets sit along a moving conveyor belt. Every few seconds, another smartphone inches forward to a new station, where it receives a new component.

By the end of the day, more than 7,500 of these devices will roll off the line, boxed, sealed and ready for sale across Kenya and Uganda.

This is the assembly plant of asset financing company M-Kopa, one of Kenya’s most heavily funded startups, now at the centre of a shift towards local smartphone manufacturing.

Founded in 2011 by Jesse Moore, Nick Hughes and Chad Larson, M-Kopa built its business on pay-as-you-go solar financing before expanding into smartphones and other devices.

The company has raised more than $590 million (Sh76.3 billion) in funding to date, according to Crunchbase, a business database.

Factory floor

The firm began smartphone assembly in January 2023, targeting low-income Kenyans. This came months after the Kenyan government introduced a 10 percent excise duty on imported phones, on top of an existing 25 percent import duty.

‘This meant that device prices were going up by around 37 percent, and we thought, how do we start doing this?’ M-Kopa Kenya general manager Martin King’ori told the Business Daily in an interview.

The company partnered with HMD Global, the Finnish maker of Nokia-branded phones, to set up the Nairobi facility. While it initially assembled both M-Kopa and Nokia devices, the factory has since shifted focus to M-Kopa-branded smartphones, with more than four models now on the market.

The operation runs on three assembly lines, each capable of producing 2,500 devices per day.

‘Every line does 2,500 devices, which means per day, 7,500. Monthly, we can comfortably do 150,000,’ Mr King’ori said.

Each phone begins as a skeletal unit – just the display mounted on a plastic chassis. As it moves along the conveyor, more than 55 components, including storage chips, cameras, connectors and ports, are added in sequence by operators stationed along the line.

At one station, a robotic arm fastens 18 screws in just 11 seconds. Further down, devices undergo charging and discharging tests, connectivity checks for Wi-Fi and Bluetooth, and are assigned unique IMEI numbers.

At this stage, the phones are still running engineering firmware and have not yet been loaded with the Android operating system.

Assembly push

M-Kopa works with original design manufacturers (ODMs) in China to specify components and features, a process that takes four to six months from concept to first assembly. The company then installs Android software using licensed keys from US tech giant Google.

Mr King’ori said the plant’s output grew from an initial 100,000 units to cross the one-million mark within a year.

He cited a June 2023 policy that zero-rated locally manufactured phones as a key catalyst. ‘Today, we have done 3.2 million devices,’ he said.

In late 2024, M-Kopa began exporting about 15,000 phones monthly to Uganda, roughly 10 percent of its total production. The company is targeting 10 million locally produced smartphones by 2027.

M-Kopa sells its phones through a hire-purchase model. Customers pay a deposit and repay the balance in daily, weekly or monthly instalments. Devices are remotely locked if a customer defaults on payments.

Alongside its own devices, M-Kopa also finances phones from brands such as Samsung.

Refurbishment drive

In a separate section of the factory, another operation is underway – refurbishment. Here, traded-in phones are assessed, repaired and reintroduced into the market at a lower retail price.

The firm also takes in devices returned by buyers who could not complete their instalments.

Some are cleaned and updated with new firmware, while others are opened up and faulty components replaced. If a handset requires more than three parts, it is dismantled and salvaged for components used in assembling ‘second-life’ devices.

‘Refurbishing capacity currently stands at about 500 units per day, with the ability to scale to 800 depending on demand,’ said the company’s head of manufacturing, Ismael Abisai.

Mr Abisai said that, to date, more than 300,000 phones have been refurbished. The devices are sold at prices roughly 30 percent lower than new models, targeting customers transitioning from basic feature phones.

‘It’s a big opportunity,’ he said. ‘These refurbished devices help a lot of people acquire their first smartphone.’

Tax bottlenecks

M-Kopa’s investment is part of a broader shift triggered by the government’s zero-rating of locally assembled phones.

Last year, solar products financing company Sun King set up a manufacturing facility in Tatu City, Kiambu County, to assemble smartphones and solar-powered television sets. The company’s first smartphone model hit the market in February.

Similarly, East Africa Device Assembly Kenya Limited (EADAK), a joint venture between Safaricom, Jamii Telecom and Chinese firm Shenzhen TeleOne Technology, has also been producing low-cost 4G smartphones at its plant in Athi River, Machakos County. In 2024, the company announced it had made 360,000 phones in its first year of operation.

But while finished devices are zero-rated, imported components attract 16 percent value-added tax (VAT), which manufacturers must later reclaim – a process Mr King’ori said can take months and tie up working capital.

‘We pay VAT on the components, but the finished good is zero-rated. So, we need to do claims to get it back,’ he said. ‘There is a delay in terms of our working capital.’

The company is pushing for zero-rating of inputs to match outputs, as well as more predictable policy timelines to support long-term investments.

‘We want a situation where, when the government comes up with a policy, they say within five years this policy will not change,’ he said. ‘In a year, we have not recouped anything.’

Beyond assembly, M-Kopa, which says 10 percent of its components are sourced locally, sees potential for a broader manufacturing ecosystem, from charging cables and earphones to packaging.

‘We employ 450 workers, 40 percent of whom are women, and support a distribution network of 15,000 agents. But we see potential in this nascent sector to grow not only in phone assembly but also in the knock-on value chain,’ the manager said.

At the same time, Kenya’s local smartphone assembly industry faces competition from imported devices that sometimes bypass official tax channels.

Last September, for instance, the Kenya Revenue Authority (KRA) intercepted a range of undeclared goods at Eldoret International Airport, including 21,600 smartphones valued at Sh6.4 million.

‘If these loopholes are tightened, you’ll see another acceleration in factories being set up in Kenya,’ said Mr King’ori.

The local assembly boom comes at a time when Kenya has begun phasing out older phones by requiring USB Type-C charging ports for all devices sold in the country, in a bid to reduce electronic waste and standardise technology.

The policy, announced last month, mainly affects importers of popular low-cost feature phones, which largely use Micro USB.

‘It is a growth opportunity for us, especially our refurbishing,’ Mr King’ori said, ‘because there is a population that cannot afford an entry-level smart device.’

Back on the assembly floor, about 220 finished devices emerge from each line every hour, ready for packaging.

A new kind of manufacturing line is taking shape, one that could turn Kenya into a regional hub for affordable smartphones, if investment, policy and demand align.

Safaricom has developed a system aimed at tightening enforcement of local marine insurance rules on imports, supporting the Insurance Regulatory Authority (IRA) and Kenya Revenue Authority (KRA) after previous false starts.

In February last year, IRA and KRA announced strict enforcement of the 2017 rules requiring all importers to buy marine cover from local insurers.

However, this was scuttled by system failures, condemning premiums from marine and transit insurance to their slowest growth pace in four years at 2.9 percent to Sh4.8 billion in 2025.

Now IRA and KRA have tapped Safaricom to develop a system that will be used in issuing digital certificates, with the rollout expected this month. This will mark the latest attempt to seal implementation gaps that have allowed importers to bypass local insurers.

‘We had a problem with the system last year. The system did not work as expected. It failed us but now everything has been finalised and we are ready for a fresh roll-out,’ said Godfrey Kiptum, chief executive at IRA.

‘We should be starting this May. We will issue a formal notice once we agree with the KRA on the exact date. The new system has been developed by Safaricom and it will be issuing digital marine certificates.’

Marine insurance policy protects goods from the risk of loss, damage and theft during transit by sea, land, and air from the port of origin.

The cover protects importers from loss, giving financiers the comfort to lend to such businesses ordering for the goods. The new system will see all importers digitally procure marine cargo insurance for their goods from locally licensed insurers prior to obtaining custom clearance.

A processed digital marine certificate will be electronically submitted to the KRA’s Integrated Customs Management Systems (ICMS), which supports import and export processes.

Last year’s teaming up of KRA with IRA on enforcement had promised to boost the compliance with the changes that were made to the Marine Insurance Act CAP 390 and Insurance Act, outlawing the sourcing of marine cargo insurance policies from insurers not locally licensed.

The changes set in on January 1, 2017 but compliance has been low given that KRA has been clearing imports whether their marine cover is from a local or foreign insurer.

Kenya’s value of principal imports hit Sh2.772 trillion last year, a growth from Sh2.706 trillion a year earlier and 30.8 percent rise from Sh2.119 trillion five years earlier, convincing insurers that they have barely scratched the surface when it comes to marine insurance.

Marine insurance premiums jumped the fastest in 2017 at 34.4 percent to SSh3.63 billion when the law on compulsory sourcing of the cover locally kicked off. However, the business dropped for three consecutive years before setting on a recovery in 2021, according to IRA data.

When we talk about empowering the communities in which we operate, one of the key areas that stands out is financial inclusion and literacy.

At its core, financial inclusion is about making financial services accessible and usable for everyone. When individuals have access, they are better equipped to navigate changing economic conditions and take advantage of emerging opportunities.

Unfortunately, the reality remains sobering, with a significant number of people still excluded. Globally, about 1.7 billion adults remain unbanked, lacking access to formal financial services or mobile money.

The reasons are clear. For many, financial services remain out of reach, whether due to physical access, limited understanding of the value of banking, or lack of informal sectors.

In some cases, the barriers are structural, with stringent requirements for opening accounts or accessing credit making it difficult for many to even get started.

Across Africa, the savings culture remains relatively weak, influenced by low income, limited financial management skills, and broader cultural and socio-economic factors. This is where financial literacy becomes critical. Without a clear understanding of financial tools, even those with access may struggle to use them effectively, ultimately limiting the impact of financial inclusion.

Closer home, the picture reflects this reality. Kenya, for instance, continues to lag behind its regional peers.

As of 2021, the country’s savings rate stood at about 13 per cent, compared to over 20 per cent in Uganda and Tanzania, despite having a higher per capita income. This gap is closely linked to financial literacy levels and everyday realities facing household, including constrained incomes, declining savings, and increasing difficulty in meeting financial obligations.

This is where financial inclusion becomes critical, ensuring that people can access essential financial tools, savings and payment solutions without unnecessary barriers. When effectively implemented, this becomes a powerful driver of economic growth, supporting job creation, empowering vulnerable groups, and contributing meaningfully to poverty reduction.

Technology, particularly artificial intelligence, is now beginning to reshape this landscape. Traditional banking models have often excluded underserved communities, but AI is helping to break down these barriers.

Case in point, in credit scoring, many individuals, especially small business owners and those in the informal sector, are often locked out due to lack of formal credit histories.

AI addresses this by leveraging alternative data, such as mobile money activity, transaction patterns, and cash flow behavior, to build a more complete picture of a person’s financial life.

This shift also presents a significant opportunity for women. In Kenya, many women are starting businesses out of both ambition and necessity, yet still face challenges in accessing credit.

Traditional systems often fail to capture how they earn and manage money. AI, through the use of alternative credit scoring methods such mobile transaction histories, can help bridge this gap and unlock growth opportunities.

Beyond credit, AI is enhancing how financial services are delivered. From personalised product development and improved fraud detection, institutions are becoming more efficient and customer centric. Importantly, technology is reducing reliance on physical infrastructure, making services more accessible to individuals in remote and underserved areas.

That said, this progress must be approached responsibly.

Concerns around data privacy, algorithmic bias, and transparency are valid, particularly in a sector as sensitive as finance. If not properly managed, these risks can deepen the existing inequalities. This underscores the need for responsible AI deployment, guided by fairness, security and transparency, alongside clear regulatory frameworks that protect consumers while enabling innovation.

At National Bank, we recognize that while AI presents a powerful opportunity to accelerate financial inclusion, technology alone is not enough.

Sustainable progress will require the right policies and a clear focus on the people we aim to serve. Ultimately, this is what will define the future of inclusive banking.

My wife had a hearty laugh on my account when I showed up with a fancy-looking cough syrup a couple of evenings ago. They have sold you the most expensive kind, she said, in amusement.

Suffering a slight dry cough at the end of a bout of flu, I popped into a chemist on my way home. May I have cough syrup please, I asked the young man behind the computer on a counter.

What kind of cough is it, he inquired? Dry, I said. How long? A couple of days, I reported. When is it worst, morning or evening, he quizzed, concern in his voice? Mmmm, morning I said, hesitation evident. He gave me a propolis-based syrup.

My wife’s mirth got us talking about price discrimination, a strategy where businesses charge different prices to different customers for the same or similar product, based on their willingness to pay rather than actual cost.

To maximise profit, businesses target different market segments with tailored pricing. Legal in most scenarios, the practice exploits data-driven consumer segmentation and can exacerbate inequality. Common examples include prices of airline and train tickets, pharmaceutical products, and movie tickets.

For a business to successfully practice price discrimination, three conditions must be met. First, the seller must be a price maker (such as a monopoly or oligopoly) with the ability to set prices rather than simply taking them from the market.

Second, a firm must be able to identify and separate different groups of consumers based on their price sensitivity (elasticity of demand).

Third, the seller must prevent customers who buy at a lower price from reselling the product to those who would otherwise pay more.

To sound learned, we economists categorise this practice into three levels: perfect, second-degree and third-degree. In perfect price discrimination, you charge the maximum price a customer willing to pay. Volume discounts are a good example of the second, while third-degree uses identifiable traits such as age, location or status to determine price.

Clearly, the young man at the chemist had politely, and perfectly sized me up, and acted accordingly.

The practice increases overall market efficiency by allowing people who would otherwise be priced out by a single uniform price, to access a product. For producers, it maximises revenue and helps recover high fixed costs. But, it can also raise fairness concerns or lead to consumer distrust.

Voter segmentation

Similar practices go on in political messaging in Kenya. Evidence shows that messaging is evolving from traditional broad ethnic mobilisation into segmented, data-driven strategies. Politicians are now using digital footprints to categorize voters by age, geography, and socio-economic priorities.

Demographic segmentation is focusing on Gen Z and millennials. They are expected to be the largest (56 percent by some estimates) voting bloc in 2027. As evidenced by the 2024 Gen Z uprising against the finance bill, messaging for this group prioritises issue-based politics, such as unemployment and corruption, over traditional ethnic loyalties.

It is great for issues to trump ethnicity, but old habits die hard. Politicians are still talking about geographic and ethnic zoning, splitting the country into ‘strongholds’ where they agree not to sponsor competing candidates within coalitions to maintain their base.

Recent trends, particularly in Mt Kenya, show leaders reverting to ethnic appeals to consolidate support ahead of 2027. This risks community isolation, ethnic animosity, and violence.

Campaigns are segmenting audiences by language preference. Apparently, content performs up to 40 percent better when localised into Kiswahili or specific Kenyan languages, particularly for rural audiences reached via WhatsApp.

Voters are also being segmented based on their primary social platform usage: X and Instagram are for urban, tech-savvy millennials and Gen Z. Messaging here focuses on policy infographics. TikTok has become the primary tool for viral, creative messaging. Complex issues are converted to memes and short-form videos optimised for virality.

WhatsApp and Facebook are dominant for rural populations and older voters. Messaging here relies on voice notes in local languages, testimonials, and video endorsements from respected local voices.

There is evidence of data-driven micro-targeting. By using data to identify audiences at an individual level, personalised messages are targeted based on specific ideological commitments or political leanings. The posts popping up in your timeline are not random.

To guard against abuse the National Cohesion and Integration Commission and the Communications Authority are, at least in theory, keeping a watchful eye, using AI tools to monitor and track harmful content.

The United States has flagged Kenya as a key destination and transit point in the global trade of counterfeit goods, placing the country at the centre of an illicit network thriving on weak enforcement and porous borders.

The Office of the United States Trade Representative (USTR) directly links countries with ‘ineffective or inadequate’ intellectual property enforcement, including Kenya, to the expansion of illicit trade flows.

The US warns that such gaps are enabling traffickers to move fake goods such as pharmaceuticals, electronics and clothing across continents with relative ease.

The USTR says counterfeit goods, largely originating from manufacturing hubs such as China and India, are shipped through transit points before entering markets like Kenya and moving onward to destinations including Nigeria, Russia and Mexico.

‘Counterfeit goods… are often shipped from China and India through transit points before reaching markets such as Brazil, Kenya, Mexico, Nigeria, Paraguay and Russia, which have ineffective or inadequate intellectual property enforcement systems,’ it said in a report.

This positions Kenya not just as an end market for counterfeits, but as a critical link in a global distribution network designed to evade detection and exploit regulatory weaknesses.

Enforcement gaps

The findings come at a time when Kenya’s enforcement systems have shown strain.

The Anti-Counterfeit Authority (ACA) recently disclosed that it missed its targets on recording intellectual property rights (IPRs) in the financial year ended June 2025 due to downtime in its Anti-Counterfeit Integrated Management System (AiMS).

The system streamlines the registration of trademarks, copyrights and patents for imported goods, enabling authorities to detect and seize fake products at the border.

Importers are required to record their intellectual property rights with the ACA, with the platform integrated into KenTrade systems for advanced data analytics and real-time monitoring of trade flows.

The disruption appears to have weakened that first line of defence.

The ACA recorded 95 IPRs against a target of 300 in the year to June 2025, nearly half the 185 IPRs the previous year and 260 in the year ended June 2023, highlighting a steady decline in enforcement capacity.

The USTR warns that weak intellectual property protections – particularly at the border and within criminal justice systems – create fertile ground for counterfeit networks to flourish.

Market impact

The influx and transit of fake goods undercut legitimate businesses, reduce tax revenues and expose consumers to potentially dangerous products ranging from electronics to pharmaceuticals.

‘Infringers often disregard product quality and performance for higher profit margins,’ the report notes.

The study estimates that between 9 percent and 41 percent of medicines in low- and middle-income countries may be counterfeit, raising concerns about the integrity of pharmaceutical supply chains.

The challenge is being compounded by changing tactics among counterfeiters.

Instead of relying on large shipments that are easier to intercept, traffickers are increasingly using smaller consignments sent through courier and postal systems.

‘Counterfeiters increasingly use legitimate express mail, international courier, and postal services to ship counterfeit goods in small consignments,’ the report says.

The rapid growth of e-commerce is adding another layer of complexity, with online marketplaces becoming a major distribution channel for counterfeit goods.

The report also links counterfeit trade to security concerns, warning that illicit goods markets often fund organised criminal networks and contribute to exploitative labour practices.

‘Trade in counterfeit and pirated products often fuels cross-border organised criminal networks,’ it states.

The USTR emphasises that countries with weak intellectual property regimes, such as Kenya, not only attract counterfeit flows but also struggle to deter repeat offenders due to limited penalties and enforcement capacity.

The result is a cycle in which weak enforcement encourages more illicit trade, further straining already stretched regulatory systems.

Cash-strapped SIC Investment Co-operative plans to offload its undeveloped land to ease liquidity pressures and pay millions of shillings owed to investors.

The co-operative, which formerly traded as Safaricom Investment Co-operative, is struggling to settle claims from customers who invested fortunes in the Pepea Fixed Deposit product that was offering them annual returns of up to 12 percent.

The board has now approved the sale of the co-operative’s land parcels to ease liquidity pressures and settle investor dues. SIC also plans to use the proceeds to compensate shareholders whose shares were sold on the secondary market but remain unpaid.

SIC told investors at the recently held annual general meeting it will prioritise settling Sh396 million owed to Pepea investors. It also said it was open to swapping part of the money with land for willing investors.

‘We are actively working on offloading our existing land bank as part of our strategy to enhance liquidity and drive revenue growth. This will not only improve our cashflows but also allow the society to refocus on more viable and high-yield opportunities,’ said Jared Odhiambo, acting chief executive at SIC.

In the year ended December 2024, SIC held Sh578.34 million worth of land for sale and a further Sh481.14 million as land held for investment. The land that SIC had earmarked for investment are in different locations including Athi River, Kiserian, Kitengela, Ngong, Nyeri and Ruaka.

Former officials and staff of SIC are staring at possible arrest and asset seizures after a forensic audit exposed years of fraud, inflated land deals and manipulation of financial records that cost members hundreds of millions of shillings.

SIC chairman Vincent Opiyo told members that the co-operative will pursue individuals named in the 400-page audit to trace and recover the losses through the help of the Directorate of Criminal Investigations and the Asset Recovery Agency.

‘This report provides the foundation to go after the perpetrators. The board will take the report and present it to the DCI. We will sit with the DCI and follow the trail of the money,’ said Mr Opiyo.

Mr Odhiambo said SIC management ‘sincerely regrets the liquidity challenges currently facing the society,’ including inability to settle dues on the Pepea Fixed Deposit product on time and processing refunds to members exiting the institution.

SIC had marketed Pepea as an ‘exclusive product’ offering what it called ‘lucrative and competitive rates in the market, second to none.’ The minimum investment was a one-off Sh50,000, locked in for a period of between six and 12 months.

Investors who placed between Sh50,000 and Sh500,000 were to earn returns of 10 percent and 10.5 percent for six-month and 12-month tenures, respectively. Returns were to rise to 11.5 percent and 12 percent for investments exceeding Sh3 million.

There is a particular kind of chaos that only urban planners fully appreciate. It is not the dramatic chaos of a building collapse, though Nairobi has had those too. It is the slow, grinding chaos of a city where every individual decision makes perfect economic sense and the collective outcome is a catastrophe. Welcome to Westlands.

Westlands was designed as a low-rise residential neighbourhood, a leafy address for the upper middle class, with controlled commercial activity at its edges. Today, 20-to-30-storey towers jostle for airspace above what were once single-family plots.

City Hall confirmed in February 2026 that all seven of Westlands’ original sub-estates, among them Spring Valley, Parklands, Loresho, and Rhapta, were planned as residential zones. The same City Hall has spent decades issuing permits that contradict that plan entirely.

In March 2026, residents of Brookside Estate watched two steel scaffolding poles, each five metres long, fall forty metres from a 24-storey building under construction in a zone capped at four storeys.

That building had received both a county permit and a Nema environmental licence, neither of which required the developer to first obtain a change-of-use approval. In Nairobi, the paperwork often arrives before the logic.

The roots of this disorder run deep. Nairobi’s 1973 Metropolitan Growth Strategy expired in 2000. For the next 14 years, a city growing at over four percent annually, from roughly one million people in 1973 to more than three million by 2009, operated without a binding spatial framework. Developers filled the vacuum. The result was not a city built in silos so much as a city built in spite of itself.

NIUPLAN, the Nairobi Integrated Urban Development Master Plan, was completed in 2014 with support from Japan’s International Cooperation Agency and approved by the government in 2016. It was the city’s fourth master plan.

It is also severely under-implemented. City Hall currently lacks clear rules for issuing building permits, a gap that opened when the repeal of the Physical Planning Act rendered the 2004 zoning guidelines obsolete. The plan exists. The enforcement does not.

The infrastructure absorbs the consequences. Westlands’ water supply, sewerage, stormwater drainage, and roads were all designed for a residential neighbourhood. City Hall’s own February 2026 disclosure acknowledged that construction had gone far beyond the area’s original purpose, straining every system it relies on.

When a neighbourhood planned for bungalows starts hosting office towers, the roads do not magically widen and the pipes do not deepen. Everything fails more slowly than the buildings rise.

This is the central problem with designing in silos. An architect approves a tower. An environmental authority issues a licence. A county officer signs a permit. Nobody asks whether the pipes can handle three hundred additional units, or whether the access road can absorb the traffic.

The Physical and Land Use Planning Act of 2019 requires counties to gazette their zoning plans, a directive the Court of Appeal had to reinforce in a September 2025 ruling, because Nairobi City County still had not done it. Six years after the law passed.

Nairobi’s metro population crossed five million in 2023 and grows at roughly four percent annually, adding the equivalent of a mid-sized Kenyan town every year.A city growing that fast needs planning that runs ahead of the crane, not behind it.

What Nairobi has instead is a system where residents in Kilimani, Lavington, and Parklands go to court to stop buildings that block their sunlight, because the permits arrived before any coherent neighbourhood plan did.

City Hall has now advertised a tender for a Local Physical and Land Use Development Plan for Westlands. Better late than never, though one suspects the developers who built 24 storeys in a four-storey zone will find a way to be consulted.

The deeper lesson is not about Westlands. It is about what happens when a capital city treats planning as an afterthought to investment.

Nairobi generates a big share of Kenya’s GDP. It deserves infrastructure designed to carry that weight, not regulations written for a city one-twentieth its size.

There is a moment every manufacturer in Kenya knows well. It comes late at night, when the factory premises is still, and you are alone with your numbers: forget the sales figures, but the full, honest picture: payroll, licences, levies, compliance fees.

Kenya targets manufacturing at 20 percent of GDP by 2030, yet it stands at 7.3 percent today, down from over 11 percent a decade ago. Behind this decline are scaled-down factories, paused investments and unrealised expansion. Despite various initiatives to streamline the regulatory environment in Kenya, the issues persist and constrain industry growth.

To run a manufacturing business in Kenya today is to be perpetually compliant – not in a simple, once-a-year sense, but in a multi-agency, multi-fee, multi-inspection cycle. In some sectors, this means managing upwards of 50 licences. In pharmaceuticals, this number rises to 57.

The National Environment Management Authority (Nema) requires approvals on effluent discharge, while the Directorate of Occupational Safety and Health Services (DOSHS) mandates audits on fire safety, occupational health, risk assessments, first aid training and fire marshal certification: often conducted separately, sometimes by the same officers, and billed as different engagements.

Counties layer on their own requirements: business permits, vehicle branding fees at entry points, and separate parking fees for delivery vehicles.

Policy pressure

Beyond the structural weight, two measures currently facing manufacturers capture the deeper problem in how policy is landing on the ground.

First is the Extended Producer Responsibility (EPR) framework. Manufacturers are not resisting environmental accountability and have invested heavily in circular economy systems: funding recovery schemes, participating in producer responsibility organisations (PROs), and working with government to reduce waste.

The Sh150 per item levy reads clearly on paper, but industrial inputs do not move in neat units. They arrive in bulk, in standard packaging used globally for safety and efficiency.

When that reality meets a per-item charge, costs compound in ways that are not obvious at first glance, particularly when stacked on top of existing PRO obligations manufacturers are already meeting.

In some sectors, the effect is already showing up as a five to six percent increase in production costs. In beverages, projections point to cost increases of up to 70 percent under the current structure.

At that scale, it stops feeling like environmental reform and starts feeling like a fundamental disruption of production economics.

The second is the Standards Levy Order, which has raised the levy ceiling to between Sh4 million and Sh6 million, up from Sh400,000 annually.

Take Sh4 million and spread it across the year: it comes to roughly Sh11,000 every single day.

Daily cost

Every day the factory is running, whether production is high or low, whether sales are strong or weak, during public holidays, when power is out, when raw materials are held at the port, when a VAT refund is still pending, that cost is accumulating.

Put differently, that is the daily wage equivalent of 11 casual workers, hired not for production, not for growth, but purely for compliance.

For manufacturers, this erodes competitiveness in markets already flooded with cheaper imports. For smaller firms, the question is more immediate: where does that money come from?

These sit alongside rising statutory deductions, volatile input prices and a domestic market where purchasing power is already stretched. Across counties, fees continue to vary, often without clear pricing frameworks or justification.

For the manufacturer on the ground, it is not one cost that defines the environment, but the accumulation.

Beyond Kenya’s borders, the environment offers little relief. Supply chains are shifting, trade tensions are rising, and protectionism is increasing. Shipping routes remain disrupted and energy prices are unpredictable.

Competitive gap

These are pressures no single manufacturer can control, which is why the domestic environment matters. While external shocks are expected, the internal framework should offer stability to plan around. Right now, that assurance is not there. Costs are being layered faster than businesses can adjust.

Other countries are moving differently. Rwanda has streamlined licensing frameworks and reduced regulatory duplication. Egypt has taken deliberate steps to cap compliance costs and provide long-term policy clarity to investors.

As Kenya constrains the ability of local industries to compete, other countries are strengthening theirs, resulting in lost markets and capital flight.

Kenya has the fundamentals to compete: a strategic location, a skilled workforce and a strong industrial base. But competitiveness is not built on potential alone.

Manufacturing is a multiplier: when it grows, it drives jobs, exports and value chains; when it stalls, the effects ripple across sectors and into the wider economy.

Some of this is within our control. Review how EPR is being applied and align it with how supply chains function. Draw a clear boundary between EPR charges and existing PRO obligations to eliminate duplication.

Reconsider the scale and structure of the standards levy and anchor it in a phased, predictable framework.

More broadly, reduce duplication across regulatory agencies, harmonise national and county requirements and restore predictability to how policy is introduced.

Hard question

It is time we confront how these levies and regulatory layers are playing out in real businesses. Are these levies and charges truly aligned with the services they support?

Our commitments under the WTO Trade Facilitation Agreement require that agency fees are commensurate with services provided and not serve as revenue streams.

These costs do not disappear. They move into the price of goods. They lead to fewer jobs and reduced investment.

Ultimately, the ripple effect lands on mwananchi, the very person these systems are meant to protect.

If the cost of local production keeps rising, businesses hesitate to expand, and competitiveness declines, what exactly are we protecting?