Category: Business Daily

The Nairobi Securities Exchange (NSE) targets up to Sh1.8 billion in non-trading revenues over five years as part of its business diversification plan amid volatility in equity trading.

The bourse is aiming to hit Sh3 billion by 2029, with 60 percent of this revenue coming from non-trading activities such as data vending, consultancy and training, which are not subject to market swings.

‘We set out an ambitious agenda: to enhance operational discipline by reducing the cost-to-income ratio to 40 percent,’ the bourse says in its latest annual report (2025).

‘We remain firmly on track to achieve our medium-term target of Sh3 billion in revenue through a deliberate focus on growing diversified income streams while maintaining disciplined cost management. This balanced approach is steadily improving our efficiency and strengthening our financial resilience.’

Diversification push

NSE has crafted a five-year (2025-2029) plan designed to accelerate growth, deepen market innovation and position the bourse as a leading force in Africa’s capital markets landscape.

The plan reflects NSE’s commitment to unlocking new opportunities, creating long-term value for stakeholders and building a stronger, more dynamic future.

‘In line with our strategy, for non-trading the first one is growing our data business and the intention is to grow that very strongly and to transition from just selling data to selling insights, which is providing insights as opposed to just selling raw data,’ NSE chief executive Frank Mwiti told the Business Daily in a telephone interview.

‘Related to our data business is consulting. For example, we want to do more consulting work around ESG, SME development, and around things like governance and investor relations. We want to do consulting that is relevant to the capital markets. We also want to do more around product development and accelerate our work around the NSE innovation hub, which we launched last year.’

The bourse is also focused on training programmes, including financial literacy and investor education, to grow its income away from equity trading.

‘The last thing, of course, to put in there is training – whether it is training other exchanges that want to get where we are, training people in financial literacy and investor education, training people how the market works,’ said Mr Mwiti.

‘All these combined will enable us to diversify from trading, but trading will continue to be a key aspect of our business. In fact, it is trading that gives us the licences to do these other things.’

Market expansion

The bourse says it is committed to deepening and diversifying the market by positioning itself as the premier platform for capital raising.

It is targeting 40 new listings, expanding market segments to attract high-potential enterprises and introducing 50 new index funds to broaden investment opportunities.

‘At the heart of these priorities is a deliberate focus on increasing retail investor participation, recognising individual investors as central to building a vibrant capital market and advancing our ambition of becoming the region’s preferred financial services hub,’ it says.

Last year, the bourse recorded a 134 percent growth in net profit from Sh116.3 million in 2024 to Sh272.2 million in 2025, while total revenues crossed the Sh1 billion mark to Sh1.08 billion from Sh828 million in the same period.

Equity transaction levy increased by 37 percent from Sh253 million to Sh348 million, while bond transaction levy grew by 76 percent from Sh169 million to Sh298 million.

‘We continued to make good progress in diversifying our revenue base. Non-trading income streams delivered strong growth, with data income increasing by 17 percent to Sh118.3 million, while consultancy income grew by 85 percent to Sh42.9 million. This performance reinforces our strategic focus on building sustainable and diversified revenue streams,’ NSE says.

NSE’s consultancy income grew to Sh42.87 million in 2025 from Sh23.2 million, rental income rose to Sh18.79 million from Sh10.51 million, while event sponsorship income increased to Sh9.14 million from Sh2.42 million.

Kenyan startups received Sh524.5 billion ($4.2 billion) in private funding in the five years to 2025, highlighting the appeal of the country’s emerging firms to largely foreign capital inflows.

The funding represents about 84 percent of private capital deals in East Africa, underlining Kenya’s status as the largest regional economy, according to data from the African Private Equity and Venture Capital Association (AVCA).

The recipients of the private capital have overwhelmingly been in the clean technologies sector, with firms like d.light and M-Kopa consistently accounting for the top publicly disclosed deals in the period.

Solar energy-focused d.light was, for instance, Kenya’s largest private capital recipient in 2025, having raised Sh38.7 billion ($300 million) during the period.

‘Kenya remains the centre of gravity for private capital in East Africa, shaping both the scale and direction of investment across the region,’ AVCA said in its Private Capital Activity in East Africa report published last week.

Kenyan startups have led the region in both private capital deal volumes and values at 65 percent and 84 percent respectively.

Deal share

This implies that at least six out of every 10 publicly disclosed funding deals in the region have been in Kenya, while $8 out of every $10 of private capital to East Africa has gone to firms in the country.

About 70 percent of the funding deals have been venture capital (VC), which represents funding directed to early-stage companies with strong growth upside.

The concentration of funding in energy and climate-centred firms is attributed to the sector’s prominence at the intersection of structural demand and scalable investment opportunities for private capital.

‘The sector’s evolution has been marked by a shift from traditional solar and wind infrastructure financing towards distributed and off-grid models such as pay-as-you-go solar, mini-grids and independent power producers (IPPs) that directly address persistent power deficits while accelerating the region’s clean energy transition,’ the AVCA report adds.

Britam Holdings has increased its stake in HF Group after acquiring additional shares in a Sh355.42 million deal, marking a second consecutive year in which the insurer has raised its ownership in the mortgage lender.

The insurance services firm revealed that the deal was completed in September 2025 through its wholly owned subsidiary, Britam Life Assurance Company (Kenya) Limited. The deal pushed Britam’s stake in HF Group to 49.89 percent at the end of December 2025.

‘The Britam Life Assurance (Kenya) Limited increased its shareholding in September 2025, investing Sh353 million, increasing its percentage shareholding. HF remains an associate for the Group, with the shareholding of 49.89 percent,’ Britam says in the latest disclosures.

The latest shareholding in HF Group marks an increase from the 48.17 percent held in the previous year.

In 2024, Britam invested Sh2.89 billion in HF by participating in a rights issue.

The insurer has been increasing its stake in HF on the back of the lender’s rising share price, boosting the valuation of the holding at the Nairobi bourse.

Valuation jump

Britam says the fair value of its interest in HF Group was Sh9.36 billion at the end of December 2025, more than double the Sh4.09 billion valuation in the previous year.

The jump in Britam’s stake value came as the lender’s share price at the Nairobi Securities Exchange rose to Sh9.96 from Sh4.51. The share closed last week at Sh9.

The latest valuation is nearly 16 times higher than the Sh591.67 million valuation in 2022, when the HF share closed the year at an average of Sh3.19.

Britam continues to account for HF as an associate in line with global accounting rules.

It holds a 100 percent stake in Kilimani Hotel Suites Limited and 30 percent in Continental Reinsurance Company (Kenya) Limited.

In accounting, a company is deemed an associate if another firm owns 20 to 50 percent of its equity, a level that gives the investing company significant influence but not control.

Profit share

The insurer’s share of pre-tax profit from associates more than doubled to Sh860 million from Sh421 million, mainly arising from growth in the profit of Kilimani Hotel Suites from Sh56 million to Sh74 million.

Continental Reinsurance (Kenya) Company contributed Sh93 million last year, down from Sh121 million in the previous period.

Britam acquired the Continental Re stake in 2024 through two limited liability partnerships in a deal valued at Sh763.78 million.

Continental Re Kenya is a subsidiary of Continental Re Group, a reinsurer headquartered in Lagos, Nigeria, offering services in 50 African countries.

The Kenyan unit, which started as a branch office in 2008 and converted to a subsidiary in 2013, serves as Continental Re’s underwriting centre for the Eastern region, covering Kenya, Burundi, Djibouti, Egypt, Eritrea, Ethiopia, Rwanda, South Sudan, Seychelles, Somalia, Tanzania and Uganda.

Britam posted a 10 percent rise in net profit to a record Sh5.53 billion in the financial year ended December 2025, marking the fifth straight year of increasing profitability.

The rise in net profit from Sh5.03 billion in the prior year was lifted by increased insurance and investment income, especially in the long-term business.

The latest profit marks the highest ever in Britam’s history, which in 2020 suffered its worst-ever loss of Sh9.1 billion.

Britam Group has a presence in seven African countries: Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique and Malawi.

Anonymous whistleblowers helped the Kenya Revenue Authority (KRA) recover Sh6.8 billion in lost revenue last financial year, underlining the growing role of tip-offs as a potent tool in the fight against tax evasion and corruption.

The recoveries, made through the taxman’s web-based iWhistle platform, represent a 61.13 percent jump from Sh4.22 billion collected in the prior year ended June 2024.

Collections in the year ended June were drawn from 821 cases reported anonymously, down from 883 cases in the previous financial year.

The latest disclosures signal a shift in enforcement, with KRA increasingly relying on citizen-led intelligence to seal revenue leakages that often escape routine audits, while also exposing misconduct within its own ranks.

Data shows that 45 staff integrity cases were reported through iWhistle and action taken during the review period, adding to a broader internal crackdown that has seen hundreds of employees investigated.

In the year to June 2024, KRA investigated 255 staff, conducted 41 lifestyle audits and carried out more than 2,100 background checks arising from citizen and insider intelligence, reflecting heightened scrutiny of its workforce.

The figures highlight the growing use of iWhistle – the anonymous web portal for reporting tax crime – in targeting non-compliant taxpayers while tightening internal oversight.

Inside iWhistle

Acting Commissioner-General Dr Lilian Nyawanda said the reporting platform, launched in 2020, has become a steady pipeline of actionable intelligence, feeding both enforcement actions and internal disciplinary processes.

‘This is an initiative that may look simple from the surface but in a month we get so many cases reported through iWhistle and then we have a team that is able to follow through and see what’s happening,’ she said.

‘And we have staff who have gone through disciplinary processes just because of that [whistleblowing] and we also have opportunities where we’ve been able to also use the same information to address issues across different taxpayers who are non-compliant.’

The iWhistle system allows members of the public and KRA staff to report tax malpractices such as bribery, fraud, conflict of interest, abuse of office and cargo diversion without revealing their identity. Each report is assigned a unique tracking code, shielding informants from exposure while enabling follow-up on cases.

Before its rollout, KRA relied on walk-ins, emails and telephone calls through its Complaints and Information Centre – channels that required disclosure of personal details and yielded limited results.

The promise of anonymity, coupled with financial incentives, appears to have lowered the barrier to reporting.

KRA offers whistleblowers a reward of five percent of recovered taxes, capped at Sh5 million per case. For information identifying unassessed taxes, the reward is one percent, capped at Sh500,000, with full payment made only after successful recovery. Informants are required to disclose their identity, PIN and bank account details at the payout stage.

Internal controls

Beyond whistleblowing, KRA says it is tightening its tax compliance framework, including profiling tax evaders and reviewing refund and debt management processes to curb abuse.

Internally, Times Tower has embedded integrity assurance officers across departments and stepped up awareness campaigns to reinforce ethical conduct, signalling an effort to institutionalise accountability rather than rely solely on detection.

Dr Nyawanda said the authority is moving to strengthen controls to ensure taxes are collected without interference and leakages are sealed.

‘Staff are aware, and we are tightening controls to ensure that taxes paid by taxpayers are collected properly and without any interference. Our goal is to collect the correct amount of tax while strengthening compliance and building a culture of integrity,’ she said.

The KRA chief added that the agency, which has over the years struggled to meet revenue targets set by the Treasury, continues to submit reports to oversight agencies, including the Ethics and Anti-Corruption Commission, to track progress on integrity reforms.

Crackdown trail

The growing reliance on whistleblower intelligence reflects a broader shift in tax administration, where enforcement is increasingly driven by information flows from those closest to malpractice – whether inside institutions or within the business community.

The rise of anonymous reporting tools signals that compliance is no longer shaped solely by audits, but also by scrutiny from peers and insiders willing to flag irregularities.

‘Corruption has no place at KRA and we are committed to building a transparent, accountable and service-oriented institution that earns and sustains the confidence of every Kenyan,’ Dr Nyawanda said.

The exposure of insider misconduct also underscores persistent governance challenges even as the authority posts gains in revenue recovery.

Earlier this year, KRA interdicted six employees, including senior officials, suspended permits of 21 cargo clearing agents and recovered more than Sh450 million after investigations uncovered a fresh tax evasion scheme at the Mombasa port.

The purge followed investigations into a syndicate in which consignments of imported cargo passed through the port without paying tax.

The scheme was uncovered after a batch of invoices logged into KRA’s iTax and Integrated Customs Management System (iCMS) failed to match the payments made against them.

A batch of mobile phone numbers was linked to the transactions, leading to the interdiction of KRA staff and the suspension of cargo agents implicated in the scheme.

‘KRA investigations and intelligence launched targeted interventions that have already yielded significant recoveries while triggering far-reaching enforcement and disciplinary actions,’ KRA said in a response to the Business Daily in March.

‘KRA has recovered Sh452.5 million following the uncovering of a scheme involving irregular cargo clearance and revenue accounting, and has taken decisive action against clearing agents and staff implicated in the malpractice. We urge importers to strictly adhere to official payment channels when remitting taxes and levies. We are against the use of any other channels that may expose them to fraud and financial loss.’

The Employment and Labour Relations Court has ratified Absa Bank’s decision to fire a branch manager linked to suspicious transactions, including unauthorised access to customer accounts and interaction with a suspected fraudster.

The court found that Lilian Adhiambo’s sacking on November 29, 2019, was justified because she failed to exercise integrity and financial probity as head of the Absa Karen branch, resulting in cash losses due to illegal access to customers’ accounts.

‘In these circumstances, I see no difficulty in finding that the respondent (the bank) has proven on a balance of probabilities that the claimant grossly misconducted herself,’ the court said.

The court’s decision followed a dispute between Ms Adhiambo and Absa after she was dismissed following forensic investigations into suspicious transactions in which some customers lost more than Sh6.3 million through unauthorised cash withdrawals.

The investigations were triggered by suspicious transactions on three customer accounts at the Absa Karen branch in October 2019.

The bank invited investigators to review the transactions, including two that involved the withdrawal of a cumulative Sh3.6 million on October 13, 2019, from an account jointly held by two Absa customers.

Investigators also reviewed a transaction for Sh1,169,000 from a customer’s account and a cash withdrawal of Sh1,850,000 from another account.

The probe revealed that the transactions were fraudulent and recommended that Absa reimburse its customers and subject the officers involved to disciplinary action.

Court findings

‘The reports indicated that the claimant authorised payment without carrying out the required due diligence checks, failed to see customers’ identification documents, made suspicious enquiries on the FCR (first call resolution) system, and had unexplained communications with a non-customer suspect,’ the court said.

The reports indicated that the branch manager authorised the fraudulent transactions and actively interacted with suspected fraudsters in her office.

She also had phone calls with one suspected fraudster before the transactions.

Ms Adhiambo was suspended and later sacked after she was adversely mentioned in three forensic investigation reports dated November 4, 2019, for failing to prevent the fraud.

She claimed innocence and accused the bank of lacking fairness in the procedure leading to her dismissal.

She further claimed that the bank failed to furnish her with the investigation reports, which were necessary for her appeal.

Pay claims

She demanded 12 months’ pay for unfair dismissal at Sh6,493,455, one month’s notice pay of Sh500,145, and service pay at one month’s salary for every year worked for 20 years at Sh10,062,900.

She also sought Sh575,022 for 24 unpaid leave days, Sh104,922 for days worked from March 1, 2019, to March 18, 2019, and a 40 percent discount on an outstanding Sh13,860,580.60 loan balance with Absa.

Absa maintained that it acted rationally because customer funds exceeding Sh6.3 million disappeared under the branch manager’s watch.

‘I have found that the dismissal of the claimant was fair and lawful… I have also found that the claimant is entitled to leave of 24 days, being Sh575,022,’ the judge said.

The Kenya Mortgage Refinancing Company (KMRC) has offered a fixed interest rate of 12.2 percent per annum for an eight-year term for its green bond that targets to raise Sh3 billion, even as it hopes for a tax exemption.

KMRC is seeking to ride on the precedent of Safaricom Plc, which raised Sh40 billion in November 2025 through a sustainability-linked bond at a coupon of 10.4 percent, drawing bids worth Sh41.86 billion, translating to an oversubscription of 177 percent against the Sh15 billion target.

The mortgage refinancer states that, whereas it is confident that the Income Tax Act renders its bond eligible for tax exemption, it is still awaiting confirmation from the Kenya Revenue Authority (KRA).

‘As provided in Paragraph 60 of the First Schedule of the Income Tax Act, interest income accruing from all listed bonds, notes, or other similar securities used to raise funds for infrastructure, projects, and assets defined under Green Bonds Standards and Guidelines is tax exempt, provided such bonds shall have a maturity of at least three years,’ KMRC’s pricing supplement for the green bond states.

‘For certainty, KMRC is seeking formal confirmation from Kenya Revenue Authority and the tax treatment is therefore subject to KRA’s confirmation,’ it added.

Market return

KMRC floated its debut sustainability-linked bond on April 28, 2026, with a target to raise Sh3 billion, marking the second green-debt issuance in the capital markets just four months after Safaricom listed a record Sh40 billion one on December 16, 2025.

This is the second tranche of KMRC’s Sh10.5 billion bond programme, coming four years after its debut issuance in February 2022, during which it raised Sh1.4 billion through its inaugural corporate bond that attracted 480 percent oversubscription.

The mortgage refinancer has floated an eight-year tenured note with a 5.1-year average weighted life, implying that noteholders will have the principal amount paid down gradually as opposed to a bullet payment at maturity.

Proceeds from the sustainability note are expected to boost KMRC’s loan book, which closed 2025 at Sh19.6 billion, having grown from Sh11.9 billion in 2024.

‘One hundred percent of the net proceeds will be allocated to refinancing eligible green home loans and eligible social home loans as defined in KMRC’s Sustainable Finance Framework dated March 2026. Bond proceeds will be used alongside other concessionary funding at KMRC’s disposal,’ KMRC says in a note to investors.

Offer details

The offer period of the Sh3 billion note will run between April 28, 2026, and May 12, 2026, with a minimum investment of Sh100,000.

Results announcement and allotment are slated for May 15, 2026, while listing and commencement of trading at the Nairobi Securities Exchange (NSE) are earmarked for May 25.

The company had planned to return to the capital markets in 2024 but was held back by a high-interest-rate environment that would have translated into a higher cost of funds and undermined its agenda of pushing affordable mortgages downstream.

East African Breweries Plc, in November 2025, also took advantage of the lower interest-rate environment and raised Sh16.76 billion in a five-year non-sustainability-linked corporate bond issuance with the coupon set at 11.8 percent.

In the year ended December 2025, KMRC’s net earnings stood at Sh1.0 billion, having contracted marginally compared to Sh1.3 billion in 2024.

The mortgage refinancer’s performance was impacted by a decline in net interest income from Sh2.2 billion to Sh1.7 billion, while its expenses grew to Sh370.9 million from Sh341.2 million in 2024.

The lead arranger and placing agent of KMRC’s Sh3 billion note is NCBA Investment Bank, with Cygnum Capital and C and R Group serving as financial adviser and registrar, respectively.

KCB Kenya Ltd is the designated receiving bank, while Ropat Trust and Mboya Wangong’u and Waiyaki are the note trustee and legal counsel, respectively.

Before last week’s nomination to the Supreme Court, Justice Mohamed Warsame had built a reputation for a consistent approach to commercial law, marked by firm enforcement of contracts and protection of property rights.

During the interviews, much of the national attention focused on his colleague at the Court of Appeal, Katwa Kigen, over his past legal work for President William Ruto and whether it could undermine public confidence in his impartiality.

Little national debate surrounded Mr Warsame’s potential rise until Judicial Service Commission (JSC) chairperson Chief Justice Martha Koome announced it a few hours after the interviews closed.

A review of Mr Warsame’s rulings shows strict application of contractual obligations alongside close scrutiny of administrative decisions for legality and an insistence on clarity in business transactions.

His elevation from the Court of Appeal to the Supreme Court crowns a career defined by firm rulings at both the Court of Appeal and High Court, administrative reforms and constitutional litigation that reshaped judicial governance.

Mr Warsame’s nomination by the JSC emerged from a tightly contested process that tested jurisprudence, integrity and administrative record. His answers and past rulings placed him at the centre of Kenya’s evolving commercial and constitutional law.

He told the commission he brings ‘over 32 years of legal experience’ grounded in advocacy and judicial service. He framed the Supreme Court as a court of direction and principle. ‘It is the Supreme Court that leads the country in the right direction,’ he said during the interview.

His legal philosophy was forged early in his career in private practice, where he trained at Anjarwalla Abdulhussein and Co. Advocates in 1994, the same year he was admitted to the Roll of Advocates.

He graduated from the University of Nairobi in 1992 before enrolling for a Postgraduate Diploma in Law at the Kenya School of Law, which he completed in 1993.

He moved to Wahome and Co. Advocates in 1995, worked as a lead litigation associate and later founded Warsame and Co. Advocates in 1996.

He joined the bench as an acting puisne judge in 2003 before appointment to the High Court in 2004.

Commercial record

It is at the High Court, particularly in the commercial and judicial review divisions, that Justice Warsame established his signature style. His rulings emphasised strict compliance with contractual obligations, efficient dispute resolution and protection of proprietary rights.

In one case pitting Jaribu Holdings Ltd against Kenya Commercial Bank, he ordered a tenant to vacate leased residential premises and settle rent arrears after finding a clear breach of contractual terms.

The bank had alleged breach of contract regarding unauthorised subletting and over Sh2.2 million in unpaid rent for the property situated along Argwings Kodhek Road in Hurlingham, Nairobi.

‘It is not available to the tenant to change the user of the suit premises without the consent of the owner and then allege that it is a controlled tenant,’ the judge ruled.

The decision, delivered in November 2007, enforced the lease without modification and underscored that courts must uphold commercial agreements as written.

The ruling has since been cited at the Court of Appeal, particularly on the principles governing stay of execution and enforcement of commercial obligations.

That approach aligns with the long-established doctrine that courts cannot rewrite contracts between parties.

Justice Warsame consistently applied that principle in commercial disputes, reinforcing certainty in business dealings and limiting judicial interference in negotiated agreements.

Legal limits

His jurisprudence extended beyond enforcement to oversight. In another commercial dispute pitting Baseline Architects Limited against the National Hospital Insurance Fund Board of Management, he disallowed the use of illegally obtained documents by a contractor to demand payment for a Sh352 million arbitral award, saying this offended public policy.

He held that reliance on improperly obtained confidential documents from the State undermined the integrity of the arbitral process and could not stand.

‘A party cannot be allowed to use a benefit which he obtained in contravention of the law,’ he stated.

That decision, delivered in May 2008, drew a distinction between contractual freedom and legality, affirming that arbitration outcomes must comply with constitutional and procedural standards.

The ruling has also been cited in the determination of other commercial cases.

It reinforced the court’s supervisory role over administrative bodies and dispute resolution mechanisms.

The dispute concerned consultancy works for the design and supervision to completion of a proposed training and resource centre for NHIF in Karen, Nairobi.

Judicial reform

Justice Warsame’s work in judicial review further expanded administrative accountability under the 2010 Constitution.

As the first presiding judge of the Judicial Review Division, he helped shift the remedy from a narrow common law tool to a constitutional safeguard anchored in fair administrative action.

‘I have dealt with all spheres of the law,’ he told the JSC panel during last week’s interviews. ‘I was the first presiding judge of the Judicial Review Division under the current Constitution.’

His tenure coincided with growing scrutiny over delays in the Judiciary, with colleagues crediting him for firm case management and reducing backlog.

He later chaired the Judiciary’s Community Service and Probation Committee, overseeing the release of more than 7,000 petty offenders through non-custodial measures, helping decongest correctional facilities.

Institutional battles

Justice Warsame’s elevation to the Court of Appeal in 2012 broadened his influence, where he handled complex constitutional and commercial disputes while maintaining emphasis on legal certainty and procedural discipline.

Beyond adjudication, he served for a decade at the JSC between 2013 and 2023, representing Court of Appeal judges. His tenure placed him at the centre of a constitutional dispute over the independence of the commission.

After his peers re-elected him in 2018, then President Uhuru Kenyatta declined to gazette him and sought parliamentary vetting and approval.

The move triggered litigation by the Law Society of Kenya (LSK) and Mr Warsame.

The High Court barred the National Assembly from vetting him, and the dispute reached the Supreme Court, which affirmed that elected JSC members are not subject to parliamentary approval.

The ruling clarified the constitutional framework governing appointments and reinforced institutional independence.

Public profile

During his Supreme Court interview, commissioners said public submissions about him were largely positive, describing him as straightforward and approachable.

Professional bodies, including LSK branches in North Rift and Nakuru, credited him with improving access to justice and addressing case backlog.

‘I would describe myself as a person with a golden heart. I can relate with anybody irrespective of status,’ he said.

Senior Counsel Bar chairperson Phillip Murgor also welcomed his nomination, describing him as a ‘hardworking judge of high reputation’ with ‘unquestionable integrity’.

Justice Warsame also used the interview to outline his judicial outlook, stressing that the Constitution must be interpreted through its text and history rather than public pressure.

‘The Constitution is a social contract,’ he said, adding that courts must give it consistent meaning.

As he awaits parliamentary approval to join the Supreme Court, his nomination comes at a critical time.

The vacancy arose after the death of Justice Mohamed Ibrahim in December 2025, leaving the court below its full seven-member bench.

The court remains central to resolving constitutional disputes and presidential election petitions.

His record reflects a judge who combines strict enforcement of commercial rights with a clear insistence on legality in administrative action.

His rulings in commercial disputes, arbitration and judicial review continue to shape Kenya’s legal landscape as he transitions to the apex court.

A Kenyan company has moved to attach and auction vehicles and other assets belonging to China Communications Construction Company in a bid to recover a Sh158 million disputed debt tied to the hiring of plant machinery.

The enforcement action follows a recent Court of Appeal ruling that gave the contractor a 30-day window to secure the decretal sum through an insurance bond or bank guarantee, failing which execution would proceed.

The debt is owed to Alfred Nyadimo Agunga, trading as Y Net International.

Court documents show auctioneers have been instructed to seize a fleet of more than 20 motor vehicles and other movable assets linked to the firm to recover the outstanding amount, now standing at about Sh158.9 million after interest and costs.

The warrants, dated April 29, were issued by the High Court in Mombasa.

The dispute dates back to a 2019 equipment lease agreement under which businessman Y Net International supplied excavators and bulldozers to the contractor for use in its projects.

The parties agreed on daily hire rates ranging between Sh45,000 and Sh70,000, with payments due within seven days of invoicing.

Payment dispute

According to court findings, the contractor continued using the machinery and making payments even after the initial four-month contract expired, implying a continuation of the agreement.

However, payments slowed and eventually stopped around September 2020, leaving a growing backlog of unpaid invoices.

By the time the dispute reached court, the outstanding balance stood at Sh187.7 million, part of which was later reduced through payments.

The matter was referred to mediation, but the process failed, as confirmed in the mediator’s report dated May 21, 2022.

In June 2024, the High Court awarded the businessman Sh100 million for the commercial claim against the contractor, together with interest at 14 percent per year and legal costs.

‘The plaintiff proved his case on a balance of probabilities and is entitled to the reliefs sought,’ the court ruled, noting that the invoices formed a valid basis for the claim.

After the judgment, the contractor sought to halt execution pending appeal.

The High Court granted a conditional stay requiring the deposit of the full decretal amount in an escrow account, a condition that was not met.

Appeal process

The parties, in March 2025, recorded a consent before the Court of Appeal requiring the contractor to secure the amount through an insurance bond issued by CIC Insurance within 14 days.

The contractor again failed to comply.

In its ruling delivered on March 25, 2026, the Court of Appeal acknowledged the non-compliance and revised the earlier consent.

It allowed the contractor to secure the amount through a reputable insurer or provide a bank guarantee.

‘The respondent shall comply within 30 days of this ruling, failing which the applicant shall be at liberty to execute,’ the judges directed.

Enforcement move

The court noted that the dispute over the insurance bond had delayed compliance but emphasised that security for the decretal sum remained mandatory to sustain a stay of execution.

However, the company has now issued warrants in its bid for full enforcement of the ruling through the sale of attached assets.

Kenya has secured a Sh6.1 billion Israeli-backed loan to acquire a high-tech missile defence system, strengthening its ability to counter aerial threats amid rising regional insecurity and concerns that the Israel-US war against Iran could spill over into the Horn of Africa.

The funding for the financial year starting July 2026 marks a 79.4 percent increase from the Sh3.4 billion the Ministry of Defence is expected to receive from Tel Aviv in the current financial year ending June, according to a Treasury budget report.

Two years ago, the Treasury revealed that Kenya was seeking a Sh1 billion loan from Israel to buy a system dubbed the Spyder Defence System.

The Spyder – short for Surface-to-air PYthon and DERby – is a low-level surface-to-air missile system designed to counter attacks from aircraft, helicopters, unmanned aerial vehicles (drones) and precision-guided munitions.

Compared to the sophisticated long-range defence systems deployed against missile attacks in the ongoing Middle East conflict, Spyder is mainly designed for low-level threats such as drones.

Budget documents tabled in Parliament show that the Treasury expects the loan to be directly wired to the Ministry of Defence in the financial year starting this July.

Security risks

Kenya is seeking to modernise its military amid rising regional and global security threats, including persistent attacks by Al-Shabaab and emerging risks tied to Iran-backed Houthi militants in Yemen, whose reported links with Somali-based networks have heightened concerns over cross-border insecurity.

The Houthis have proved to be one of the most disruptive and resilient members of Iran’s axis of resistance, which includes Hezbollah.

In total, the Ministry of Defence will spend Sh10.3 billion on its military modernisation programme between July this year and June 2027, up from Sh4.73 billion in the current fiscal year.

The government’s financing for the upgrade for the year starting July is Sh3.7 billion, a 4.6-fold increase from Sh800 million in the period between July last year and June 2026.

Spending on this modernisation programme is projected to rise by 61.5 percent to Sh16.63 billion in the financial year starting July 2027 before increasing further to Sh21.63 billion in the following fiscal year in what could spark an arms race in the region.

Capability gap

In the budget documents, the Ministry of Defence says rapid advances in military technology are making its equipment obsolete faster and raising the cost of upgrades.

It also cites challenges such as limited funding leading to pending bills, porous borders, staff shortages, rising disasters, land disputes, and the high cost of land acquisition and compensation.

‘The ministry’s priorities during the MTEF period 2026/27-2028/29 will be capacity building and sustainability of manpower, continued modernisation of systems and equipment, enhancing force posture through infrastructure modernisation, enhanced maintenance of major systems, increased investment in research and development, implementation of strategic intervention projects, defence industrialisation and continued operations of civilian support,’ the budget document says.

Air defence

Kenya’s air defence is built around short-range systems, including older Rapier missiles and fighter jet interception, but it lacks the advanced long-range missile defence systems seen in major conflict zones.

Currently, Kenya mostly uses Rapier ground-to-air systems, an anti-aircraft missile system originally developed by the British Aircraft Corporation in the 1960s for the British Army and Royal Air Force.

The Rapier entered service in 1971 and was first used on the battlefield during the Falklands War. However, as attack weapons advance, countries have been phasing out this system while moving to more sophisticated ones such as Sky Sabre, Patriot and NASAMS.

A study by the United Nations Institute for Disarmament Research (UNIDIR) found that most non-state armed groups in Africa, including terrorists, have developed an interest in uncrewed aerial systems (UASs) such as drones, making it urgent for countries such as Kenya to upgrade defence systems.

Al-Shabaab is one of the groups that, although it has yet to use these systems for military attacks, is close to attaining such capabilities, according to the report.

‘Concerns have been raised regarding Al-Shabaab’s ability and intent to weaponise UASs for attacks against civil aviation infrastructure,’ the report, published in 2024, says.

Intelligence warning

The director-general of the National Intelligence Service, Noordin Haji, warned that Kenya is facing an even bigger terror threat, underscoring the need to speed up efforts to acquire modern defence systems.

‘As part of this expansion, ISIS and Al-Shabaab have been collaborating with the Houthis, gaining access to advanced weaponry and sophisticated training. The spillover effects are now being felt in Africa, making the continent an emerging epicentre of terrorism,’ Mr Haji said.

Kenya is seeking to further modernise its military capabilities in the face of civil wars in neighbouring countries, including Somalia, Sudan and Ethiopia.

It already has troops in Somalia, a factor that has made it a target for Al-Shabaab.

The acquisition of the Spyder Defence System will add to Kenya’s military spending.

Kenya spent Sh166.8 billion on military equipment last year, up from Sh147.37 billion in 2023.

The US and Turkey are the main suppliers of military gear to Kenya, including helicopters, armoured vehicles and drones.

The modernisation of the military is also intended to ensure that the Kenya Defence Forces meets the standards set by the United Nations to qualify for funding during peacekeeping missions.

Three years ago, the government disclosed that it would spend Sh7 billion annually to modernise security agencies over five years.

Domestic capital pools have remained bench warmers as foreigners dominate the funding of local startups to the tune of hundreds of billions of shillings a year, minimising local influence in the growth and prosperity of emerging companies in Kenya.

Wandia Gichuru, the co-founder and CEO of Vivo Fashion Group, relied on personal savings along with funding from friends and high-net-worth individuals to get her first business off the ground.

For her second business, Shop Zetu, Ms Gichuru, however, went the venture capital (VC) way.

She did not come across many local funders on the journey and observed the weight of expectations placed by foreign capital even as it remains a necessary evil in spurring early-stage companies.

‘While it was taking someone else’s money, the funding comes with certain expectations, which are understandable. Sometimes that can go a little bit wrong,’ she says.

‘What I have seen in Kenya mostly is angel investors (high-net-worth individuals providing personal capital and mentorship). I haven’t come across many local venture capitalists with local money.’

Foreign dominance

Ms Gichuru highlights strict timelines placed on local startups to recoup money for their private capital backers and tough valuation scenarios as part of the difficulties, especially when a business has yet to generate profit.

A list of the most active investors in East Africa, compiled by the African Private Equity and Venture Capital Association (AVCA), is largely a foreign capital compilation.

Among the 20 most active general partners, who represent active managers in private equity firms with unlimited liability, only five organisations are headquartered in Kenya, including the Acumen Resilient Agriculture Fund (ARAF), AfricInvest Group, Ascent Capital, the Catalyst Fund and Delta40.

The top 10 most active limited partners, a representation of passive investors, meanwhile, lack any Kenyan firm.

Most active general and limited partners are spread across the rest of the world, including the United States, the United Kingdom, Mauritius, Sweden, Germany, Norway and France.

This underpins the prominence of foreign capital in the funding of local startups.

Kenyan startups shared out a significant Sh524.5 billion ($4.2 billion) in private capital funding between 2021 and 2025, according to additional data from AVCA.

Local gap

Seema Dhanani, the Head of Office Kenya and Coverage Director for East Africa at the British International Investment (BII), a development finance institution, regrets the absence of domestic funds in the space.

She faults the bias for government securities among Kenyan pension funds for the apathy toward local private capital investments.

‘Unfortunately, we’ve got it the wrong way around. You would expect that local capital would take the lead to attract international capital,’ she says.

‘Our pension funds, particularly in Kenya, receive a very fat fund from government securities. Pension trustees have the easiest decision to vote to invest in bonds.’

The Kenyan pension industry, which reached Sh2.8 trillion in assets at the end of last year, has been a focus point for domestic capital mobilisation to fund alternative asset classes like private equity due to their ability to wait long for a return, enabling the creation of what is dubbed ‘patient capital’.

Government bonds have, however, been the magnet for the sector, taking up more than half of the industry’s assets under management at 52.18 percent as per data from the Retirement Benefits Authority (RBA).

Pension bias

Part of the concentration is attributable to caps on alternative investments.

However, only 1.07 percent of pension assets were in private equity as at the end of December 2025, translating to a meagre Sh29.9 billion, even as the funds are allowed to put up to 10 percent of their portfolios in the asset class.

Local pension funds admit that they lack knowledge in alternative asset classes, a factor accelerating the bias for State coupons from bonds.

‘The challenge is knowledge, as most people, including trustees, who are the most important decision makers for pension funds, do not know about this asset class,’ says Jane Nzau, the pension administrator at the Central Bank of Kenya (CBK).

Jane is also the chairperson of the Association of Retirement Benefits Schemes.

‘The reality is that most people are not privy to how private equity or venture capital works. It would take getting them up to speed and showing them the benefits, where they would increase their returns,’ Shaka Kariuki, the co-chief executive officer and chief investment officer of Kuramo Management, says.

Slow shift

Local pension funds are, however, taking a gradual interest in the private capital scene, as was evidenced by their participation in the just-concluded AVCA conference in Nairobi.

The State pension fund, the National Social Security Fund (NSSF), says it is eyeing diversification in asset allocation as it approaches Sh1 trillion in assets under management (AUM).

NSSF Managing Trustee and CEO David Koros hinted at partnerships with private equity firms to achieve diversification, while the fund’s portfolio has shown some gradual shift away from government securities in the last five years.

‘Partnering with private equity funds would help us diversify and invest in the real sectors of the economy,’ he says.

‘We are doing an infrastructure project – the Rironi-Mau Summit Highway. The NSSF just stepped forward and said we’ll do it, we will invest in this road.’

Mr Kariuki says that while foreign private capital remains dominant, the picture has been gradually changing.

‘The picture is changing, to be honest. While foreign capital continues to grow, which is positive, we have, at Kuramo, anchored 15 first-time indigenous private equity funds. Before we came in, only development finance institutions made these investments. We made a conscious decision to anchor local funds, and we now see foreign funds willing to write a cheque for local institutions,’ he adds.

Risk lesson

Across Africa, it has taken default events and haircuts on pension funds’ government bonds in countries like Ghana and Zambia to force diversification.

It’s a shock that Ms Dhanani from BII hopes will not have to be replicated locally to trigger diversification in asset allocation.

‘There have not been sovereign defaults in Kenya. In Zambia and Ghana, we are seeing a willingness by pension funds to diversify, having been burned. Some Kenyan pension funds have been adventurous, but it is way too little,’ she adds.

The funding of startups in Kenya will likely not follow the Western model, where venture capital follows stages beginning with pre-seed funding at the earliest – the idea stage – and ending at Series C, known as the growth stage, which preludes the exit stage, mostly done through an initial public offering (IPO) where a startup matures into a publicly traded company.

Ms Gichuru says local capital has always been in place, but it will most likely fail to deploy within the established Western framework.

‘I would love to see a home-grown venture capital model which doesn’t have to look like what is typically there, but is one that suits us. The exciting thing for me would be to see African money in Africa. It’s still great to see foreign capital,’ she adds.

Exit question

For Ms Gichuru, startups must think through the exit strategy for any investors taken on board, which would make the businesses attractive to not just foreign but also domestic capital.

‘If it’s not an investment in your son’s or daughter’s business, you must know when and where to get your money. The company has to start paying dividends or sell, but you will find a lot of entrepreneurs who start a business with no idea of an exit.’

Private capital largely takes the form of equity or debt, where, under equity, the investor takes a stake in the business.

Debt funding bears similarities to loan facilities, where investors recoup interest over the life of their investment before the reimbursement of the principal amount at exit.

The reimbursement in private capital debt will, however, often feature an element of payment in kind (PIK), where the business may be obligated to offer an enhanced return based on a percentage of profits or revenues earned.

Debt is seen as a plausible choice for pension funds, which are usually shy of taking stakes in firms.

‘We may have to try things and structure innovations that would allow pensions to come in. Private credit would be a good opportunity as pension funds are not keen on an equity-type investment,’ Ms Dhanani said.