Category: Business Daily

Kenya Reinsurance Corporation (Kenya Re) plans to expand into the asset management business in a bid to diversify its revenues and reduce reliance on its core reinsurance operations amid stiff competition from regional players.

Asset management involves investing money on behalf of clients, including corporates, institutions and individuals, to help grow their wealth while mitigating risk. Asset managers charge service fees.

The firm is already recruiting consultants to conduct a feasibility study on the planned entry into the asset management business, signalling its intention to formalise the expansion into fee-based investment services.

The reinsurer, long known for underwriting risk, now wants to enter an arena dominated by banks, fund managers and insurance-backed investment arms. It hopes that securing a seat at the table of money managers will turn its pools of capital into a stream of fees.

The feasibility study is expected to assess market opportunities, regulatory requirements, capital needs and potential business models for the new venture. Kenya Re is open to options such as setting up the business from scratch as an asset management subsidiary or acquiring an existing fund manager.

‘The corporation is seeking to engage a consultant to undertake a comprehensive feasibility study and advisory services for the establishment of an asset management subsidiary,’ the reinsurer said in a disclosure.

‘This initiative is part of the corporation’s strategic objective to diversify revenue streams, enhance shareholder value and expand into the financial services sector, specifically in fund and wealth management,’ it added.

Kenya Re is entering a space that already has several major insurance groups offering asset management services through subsidiaries, which focus on pension schemes, unit trusts and high-net-worth portfolios. Major banks also offer asset management services through subsidiaries or wealth management desks.

Market entry

The consultant will be required to determine the commercial, financial and strategic viability of establishing an asset management subsidiary and advise on the optimal market entry strategy.

In addition, the consultant will identify and profile potential acquisition targets and provide transaction advisory services, including valuation and acquisition support, should Kenya Re opt for a buyout instead of a greenfield setup.

The feasibility study will also explore competitive dynamics in the asset management industry, which is currently dominated by banks, fund managers and a growing number of independent investment firms.

If implemented, the shift would see Kenya Re move beyond its traditional role of underwriting risk for insurers to actively managing funds, potentially leveraging its large investment portfolio and balance sheet strength to generate additional income streams.

The move could also position Kenya Re to better utilise its investment expertise, as reinsurers typically hold significant financial assets to back their underwriting obligations.

Earnings pressure

Kenya Re’s push into asset management reflects a broader trend among insurance and reinsurance firms globally, which are increasingly turning to investment-related services to stabilise earnings.

Asset management services allow insurers and reinsurers to earn recurring fees while also deepening relationships with institutional clients such as pension funds and corporates.

Kenya Re has maintained a Sh839.94 million dividend despite net profit retreating by 11.6 percent to Sh3.92 billion in the financial year ended December 2025.

The reinsurer attributed the drop in profitability to underperformance in the company’s international treaty business and its operations in Zambia and Côte d’Ivoire.

Kenya Re, which is 60 percent owned by the Kenyan government, serves over 80 markets through its head office in Kenya, as well as three subsidiaries in Côte d’Ivoire, Zambia and Uganda. It said last year it was planning to set up a subsidiary in Tanzania and an office in India.

As interest rates continue to fall, bond prices have risen, opening a window for investors to take profits. But is this the right time to sell?

Christine Gatakaa, Head of Fixed Income Trading at Capital A Investment Bank, explains the relationship between interest rates and bond prices. She also breaks down how secondary bond markets work and what investors should consider before deciding whether to sell.

Revenue generated by the Konza Technopolis fell sharply in 2025, largely due to reduced land leasing and delayed payments for cloud services.

New data from the Kenya National Bureau of Statistics (KNBS) shows that the State-owned technology hub recorded a 19.6 percent drop in revenue to Sh202.9 million in 2025, down from Sh252.4 million the previous year.

The decline came despite total investment rising by 19 percent to Sh99.38 billion, with the number of investors increasing to 78 from 70 a year earlier.

Income from leasing land parcels, a key revenue stream for the development, declined to Sh49.8 million in 2025 from Sh76.1 million in 2024, due to low uptake in the Phase II and Phase III sections of the city.

The number of parcels leased dropped to 21 from 33, as available plots rose to 78 following lease revocations and the surveying of additional land.

‘The total revenue generated by the Technopolis declined from Sh252.4 million in 2024 to Sh202.9 million in 2025,’ KNBS said in its 2026 Economic Survey.

‘Revenue generated from the lease of land parcels declined from Sh76.1 million in 2024 to Sh49.8 million in 2025, largely due to low uptake of parcels in Phase II and Phase III of the Technopolis.’

Revenue from the Konza Cloud also fell by 16.4 percent to Sh126.7 million, weighed down by outstanding bills from client institutions, pointing to cash flow pressures despite increased utilisation of digital infrastructure.

Usage rise

Still, the Konza National Data Centre recorded a 27.6 percent increase in the number of hosted clients to 171, while storage capacity utilisation doubled to 50 percent following an infrastructure expansion.

‘Available cloud server memory, however, declined from 28 percent in 2024 to 24 percent in 2025, while available virtual central processing units reduced from 62 percent to 56 percent, reflecting increased uptake and utilisation of the data centre,’ the statistics bureau said.

Konza Technopolis is a 5,000-acre smart city project aimed at positioning Kenya as a regional technology and innovation hub under the State’s Vision 2030 plan.

Located along Mombasa Road, 80 kilometres south of Nairobi city centre, the development hosts a data centre, research institutions and digital innovation hubs, offering a special economic zone for technology businesses.

Some of the companies that have set up operations in the Technopolis include Kenya’s largest telco, Safaricom, and Chinese tech giant Huawei.

Enrolment in adult education jumped by nearly 19 percent in 2025, fuelled by female learners amid economic and social empowerment campaigns that mainly targeted women.

The newly published Economic Survey 2026 shows that the total enrolment at adult education centres in Kenya increased by 18.8 percent to 165,552 learners in 2025.

There were 101,396 females enrolled in the adult education programmes last year, representing 61.2 percent of the total, compared to 64,156 men.

This reflects a push to reverse inequalities against females by giving them basic literacy skills, such as business and financial management.

Nairobi recorded the highest enrolment with 34,506 learners in 2025, up from 13,194 the previous year. Women accounted for 18,562 of the learners in the capital.

‘The enrolment of adult education learners in Nairobi City County increased to 34,506 due to urban tech-driven access and aggressive mobilisation,’ the Economic Survey 2026 said. Nakuru registered 10,600 learners and Turkana 11,523, highlighting growth in both urban and marginalised regions.

The data also points to disparities at county level. Narok recorded the steepest decline, with enrolment dropping from 4,900 in 2024 to 1,639 in 2025, raising concerns over access, staffing, and outreach in some areas.

The rise in female participation is linked to grassroots mobilisation, through women’s savings groups, commonly known as chamas. These entities have increasingly incorporated literacy and numeracy sessions into their regular meetings, providing accessible entry points for women who previously lacked opportunities for formal education.

The Directorate of Adult Learning and Education, under the State Department for Social Protection, has expanded its curriculum to include digital literacy, financial skills, and vocational training. This change has brought adult education into closer alignment with everyday economic activities, particularly for women involved in small-scale enterprises.

Similarly, the rising demand for basic education, including the ability to read, write, and handle transactions, even in informal sectors, has further encouraged adult women to return to education.

Counties with active community educator networks have seen stronger enrolment among women. For example, Kisii had 4,922 learners, of whom 3,319 were women, while Meru and Kitui had 3,940 and 5,624 learners, respectively, with women forming the majority in both counties.

Historical data show that women have consistently outnumbered men in adult education. In 2022, there were 86,862 female learners compared to 51,766 male learners. This trend has continued into 2025, reinforcing the central role of women in the country’s adult education recovery.

One day you might find yourself standing at the platform of Tivoliparken in the small Swedish town of Kristianstad, looking across the railway line at this pub. You’ll think that looks like a typical British bar. A good place to have a beer. And it is.

It’s both a bar and hotel – guests checking in and out through the bar. Inside: dark wood, low lighting, that slightly serious pub mood. The kind of place raucous Liverpool fans would flood after a win.

There is beer. All manner of beer. Which is wasted on someone like me for I’m no beer person. I don’t know my pilsners from my lagers. Beer, to me, is just beer.

Thankfully, there was the barman- Nicholas, a Swede with perfect English that sounded faintly British. He introduced himself as a barman who is also a computer nerd.

‘What you need,’ he said, ‘is something with flavour. Fruity. Slightly sweet. I think I know what you’ll like.’

He returned with an IPA in a small glass – the kind that feels like it should come with permission if you’re underage. I took a sip.

‘It tastes like muratina,’ I told him.

He stared back blankly.

I explained the Kikuyu brew. He listened politely, without much interest then said, ‘Well… this is an Indian Pale Ale.’ Which, as it turns out, has nothing to do with India.

Back in the days of the British Empire, British brewers made beer for soldiers and traders in India. The journey by sea was long, and beer spoiled easily.

So they added more hops, a natural preservative, which made the beer survive the trip – and people liked the taste. That became the IPA. ‘It’s strong, though,’ he warned.

‘The hops.’

I enjoyed it. It rushed to my head sluggishly, made me feel light in the head and heart. Great evening light, slightly warm, streamed through the pub windows. Outside, which was still biting cold by my tropical standards. Amazingly, lots of people sat out on the terrace in that cold, in their sunglasses, drinking beer and watching trains come and go.

Kenya’s inflation jumped by the quickest pace in seven years to 5.6 percent and is expected to accelerate further in the wake of costly fuel linked to the Iran war.

Data from the Kenya National Bureau of Statistics (KNBS) shows the inflation surged 1.2 percentage points in April from 4.4 percent the previous month.

The jump is linked to the high cost of fuel following disruptions in the Middle East, which saw petrol and diesel prices rise by 10.8 percent and 17.9 percent, respectively.

Fuel prices have a significant impact on inflation in the East African nation, which relies heavily on diesel for transportation, power generation, and agriculture, while kerosene is used in many households for cooking and lighting.

The 1.2 percentage monthly rise is the largest since 2019 as Iran’s war shakes up the economy, threatening jobs and earnings. It has surpassed the expectations of the Central Bank of Kenya (CBK), presenting a new headache for the apex bank, whose primary goal is maintaining low and stable inflation. CBK had forecast inflation to peak at 6.2 percent in July 2026 but had expected the cost of living measure to stand at 4.8 percent in April before rising to 5.7 in May and six percent in June.

‘The price increase was primarily driven by a rise in prices of items in the food and non-alcoholic beverages category (8.8 percent), transport category (10 percent) and housing, water, electricity, gas and other fuel category (2.4 percent) over the one year,’ KNBS indicated in its April release of the consumer prices index.

‘These three divisions together account for over 57 percent of the total weight across the 13 major expenditure categories.’

This implies that the average household spends at least Sh57 out of every Sh100 in disposable income to meet food, transport and energy expenses such as lighting and cooking.

The average cost of a litre of petrol rose Sh198.67 from Sh179.35 in March, while diesel was up Sh30 to Sh197.81 despite the State offering a subsidy and halving value-added tax.

Public service vehicles and boda boda increased fares by 20 percent in April in response to the costly fuel, KNBS says.

The cost of refilling a 13-kilogramme gas cylinder equally rose by 7.3 percent to Sh3,361.56 from Sh3,132.34.

Electricity prices were spared from the first-round effects of the Iran shock as prices dipped by 0.6 percent in April ahead of the adjustment to the fuel cost charge, which is priced into power billing.

The price of key food commodities crept up in the month, including spinach, potatoes, cooking oil, sukuma wiki, sifted maize flour and beef.

‘With the oil price shock and assuming that the conflict lasts for the next three months, the forecast overall inflation does go above the five percent mid-point, peaking in July 2026 after which it progressively declines,’ CBK Governor Kamau Thugge said earlier in April.

Kenya targets an inflation rate of between 2.5 percent and 7.5 percent, a range which the government assesses as the most appropriate rate of change in prices to not only deliver economic growth but also contain the rise in consumer prices.

The country’s inflation rate has not surged past five percent, the sweet spot target for inflation by the government, since June 2024 while changes in consumer prices have been contained below 7.5 percent since August 2023.

The lower inflation regime saw salaries increase last year surpass inflation for the first time in six years, despite employers having offered workers a smaller pay increase.

Inflation-adjusted earnings, a barometer for measuring employees’ purchasing power – also known as real wages – grew by two percent last year, marking the first time since 2020 that growth in workers’ earnings has surpassed the increase in consumer prices, says the Kenya National Bureau of Statistics (KNBS).

Workers’ real wages had fallen for five consecutive years, including a negative 0.3 percent in 2024.

CBK’s March 2026 market perception survey and the agriculture sector survey showed that inflation expectations will hold in the target range in the coming months but noted upward pressure due to higher energy prices.

The apex bank paused its rate easing cycle for the first time in nearly two years, adopting a wait-and-see approach to where consumer prices move next.

CBK deploys its interest rate setting mandate to counter inflationary pressures.

Kenya’s benchmark interest rate fell from 13 percent in August 2024 to 8.75 percent at present, supported largely by a slowdown in the change of consumer prices and a stable exchange rate.

The Kenyan shilling has continued to trade on a narrow range against the US dollar, changing hands at between Sh129 and Sh130, even after the onset of the US-Israeli war on Iran at the start of March.

Kenya has waived the maximum sulphur limit for diesel and petrol imports barely a month after rejecting a petrol consignment over high sulphur content.

The maximum sulphur limit for the two fuels has been temporarily adjusted from the current 50 parts per million (ppm) for the next six months.

Lee Kinyanjui, Cabinet Secretary for Investments, Trade and Industry, said the waiver is intended to prevent a fuel shortage if importers are unable to secure supplies that meet local standards.

However, the decision raises questions about the government’s earlier move to reject 60,000 metric tonnes of petrol imported by One Petroleum in March on safety grounds and order its withdrawal from the market.

Kenya, like other countries, is grappling with fuel supply constraints linked to disruptions from the US-Israel conflict with Iran. The situation has left importers scrambling for compliant fuel supplies.

‘The Ministry of Investments, Trade and Industry has approved a request by the Ministry of Energy and Petroleum to temporarily waive the sulphur parameter to the maximum limit of 50mg/kg for KS EAS 177:2025 Automotive Gas Oil (diesel) and KS EAS 158:2025 premium motor spirit, as per the previous fuel standards, for a period of six months,’ Mr Kinyanjui said on Thursday afternoon.

‘The measure is temporary and intended to ensure continued fuel availability and sustain economic stability during the current period of global supply disruption.’

The waiver is likely to raise concerns, as excess sulphur in fuel can interfere with catalytic converters in vehicle engines, reducing efficiency and causing damage.

Mr Kinyanjui had in March also allowed oil marketers to import petrol with higher levels of sulphur, benzene and manganese in a bid to avert a shortage.

One Petroleum and Oryx Energies were cleared to import emergency cargoes outside the Government-to-Government (G-to-G) arrangement, even though the fuel did not meet standard specifications.

One Petroleum delivered 60,000 metric tonnes of petrol between March 27 and March 30, while Oryx was expected to deliver a similar quantity between March 25 and April 20, 2026. Oryx’s contract was later cancelled.

Kenya turned to emergency off-spec fuel after a vessel carrying 85,000 metric tonnes of petrol failed to leave the port of Jebel Ali in the United Arabs Emirates due to the closure of the Strait of Hormuz.

The One Petroleum cargo later triggered a dispute, with the Cabinet Secretary for Energy and Petroleum disowning it, citing non-compliance, high cost and procurement outside the G-to-G framework.

The saga led to the resignation of former Principal Secretary for Petroleum Mohamed Liban, former Kenya Pipeline Company Managing Director Joe Sang, and Energy and Petroleum Regulatory Authority Director-General Daniel Kiptoo.

The overall growth in average prices of key construction components, including materials, fuel, labour, and transport, flattened in 2025, providing relief to developers and contractors after years of elevated building costs that had squeezed margins.

Data from the Kenya National Bureau of Statistics (KNBS) shows that growth in the Construction Input Price Index (CIPI) dropped to 0.5 percent in 2025 from 2.8 percent in 2024 and well below the recent peak of 7.48 percent recorded in 2022.

The CIPI tracks changes in the cost of essential inputs such as cement, steel, equipment, wages, transport, and energy, pointing to a broad-based easing of price pressures across the construction value chain.

The deceleration marks the lowest annual increase in more than half a decade and translated some relief in construction budgets.

‘The average annual inflation declined from 2.8 percent in 2024 to 0.5 percent in 2025,’ KNBS said in the newly published 2026 Economic Survey, highlighting the scale of the slowdown in input cost growth.

The easing in construction costs coincided with continued momentum in ongoing projects.

The data shows that cement consumption – a key indicator of building activity – rose by 20.3 percent to 10.3 million tonnes, suggesting that developers pushed ahead with projects already in the pipeline as input prices stabilised.

Employment in the sector also expanded by 2.1 percent, driven by gains in both private and public construction activity. Private sector employment increased to 228,200 workers, while public sector jobs rose to 10,100.

This came in a period when commercial banks increased lending to the construction activities, including real estate development, by 12.2 percent to Sh646.5 billion, signalling sustained financing support.

Caution on new projects

The benefits of lower input costs were, however, not fully reflected in new project pipelines.

The value of private building plans approved in Nairobi declined by 9.2 percent to Sh201.3 billion, indicating that developers are holding back on new investments despite improved cost conditions.

The number of building works completed in Nairobi increased by 15.1 percent to 25,090 units, largely driven by residential housing, which rose by 18.2 percent.

Public sector construction, backed by billions of shillings in housing levy flows, also played a critical role in sustaining activity.

The State Department for Housing and Urban Development, together with the National Housing Corporation, ramped up delivery, with completed housing units rising to 7,148 in 2025 from 1,655 the previous year.

The value of these projects more than doubled to Sh8.2 billion.

The data underscores a sector in transition, where developers largely benefitted from stabilised input costs across materials and labour, but remain cautious about launching new projects.

On April 25, the world observed World Malaria Day with the theme: Driven to end malaria: Now we can. Now we must. For the first time in decades, this statement is backed by real scientific evidence and progress, and a brief window of opportunity.

Malaria remains one of the toughest public health challenges tied to poverty, climate risks, and health inequalities. But now, there is a new sense of hope that we finally have better tools to fight the disease and protect the most vulnerable people.

Breakthroughs in vaccines, better mosquito nets, improved diagnostics services, and cutting-edge technologies such as genetically modified mosquitoes and long-acting prevention methods are changing the fight against malaria.

According to the World Health Organisation (WHO) several countries among them Kenya, Ghana and Malawi have rolled out malaria vaccines into their national or sub-national routine immunisation programs.

Malaria vaccines are now being given to millions of children every year, something that seemed far out of reach just 10 years ago. The current rollout aims to protect roughly 10 million children every year.

In Kenya, the Ministry of Health successfully rolled out malaria vaccine which has helped reduce the prevalence of malaria by a third over the past decade. This progress is a major leap toward the country’s ambitious goal of reducing malaria cases and deaths by 90 percent by 2030.

The latest annual report by the WHO shows that malaria prevalence fell from eight percent in 2015 to 5.6 percent in 2025. This is a 2.4 percentage point drop, representing the most significant shift in the country’s malaria burden in a generation.

This progress is attributed to the Ministry of Health’s decision to adopt the R21/Matrix-M vaccine, a more cost-effective and an efficient alternative to RTS,S, the world’s first widely used malaria vaccine. This vaccine provides up to 75 percent protection, but also, it’s a cheaper version for the country.

In Kenya’s malaria vaccine programme, the reduced cost has been transformative, enabling expansion into 12 additional sub-counties in western Kenya, one of the country’s highest malaria-prone regions.

In addition, with improved bed nets, preventive drugs and expanded care, the country’s response began to turn the tide, therefore, producing measurable results for the first time in years.

While this progress is encouraging, we cannot afford complacency. We must continue with our strategic approach and channel all efforts toward the fight against malaria.

First, the country leadership must remain at the centre. Nationally driven programmes rooted in local realities are proving to be the most effective engines of progress. Empowering the local communities, civil societies, and community-based organisations to lead such programmes ensures not only relevance, but long-term sustainability.

Second, financing must be sustainable and aligned with strategic priorities. In a constrained global economic environment, every shilling must be maximised and directed toward high-impact, data-driven interventions that deliver measurable outcomes.

Third, partnerships must be predictable and aligned. Malaria elimination is not achieved through sporadic efforts, but through consistent collaboration. Both the national and county governments, partners, researchers, and communities must move with shared accountability and long-term vision.

Fourth, we are in a race against evolution. As mosquitoes develop resistance to our drugs, insecticides, and diagnostic tests, innovation becomes our most vital investment, not an afterthought.

Lastly, we need to put the power in the hands of the community. It should not be passive bystanders but at the heart of the solution in this fight against malaria. For any of these interventions to work, there must be real trust and local pride in the mission.

The message for World Malaria Day 2026 is a simple but urgent truth that we have never been closer to ending malaria.

The science we need already exists, the tools to deliver it are firmly within our reach, and the undeniable progress we have made proves that success is possible. What remains is whether we will summon the will to finish what we have started.

President William Ruto is caught between a rock and a hard place as workers seek a 23 percent rise in minimum wage amid resistance from employers.

Ahead of Friday’s Labour Day celebrations, the Central Organisation of Trade Unions (Cotu-K) was lobbying for what would be the largest single-year wage increase since 2017, citing the rising cost of living. Employers, however, argue that elevated operating expenses have eroded their capacity to raise pay.

The President, who approved a six percent minimum wage increase in May 2024, now faces a delicate choice to side with workers, back employers, or strike a middle ground by approving a more modest adjustment that tempers both sides’ demands.

The stakes are high for Dr Ruto, with Friday’s fete coming against a backdrop of rising political rhetoric.

Many of the President’s critics argue that workers’ welfare has deteriorated under his administration due to new or enhanced compulsory deductions for social healthcare, affordable housing and retirement savings.

All of the last three double-digit increases in the minimum wage have coincided with election cycles (2013, 2017 and 2022), underlining the political sensitivity of the pay policy.

Trade unions are pushing for pay rises to improve workers’ welfare, but the Federation of Kenya Employers (FKE) has opposed the move, urging the State to first fix structural challenges in the economy, including delays in processing tax refunds and settling bills when firms trade with government entities.

Cotu-K secretary-general Francis Atwoli wants to back the rise in minimum wage with better collective bargaining agreements (CBAs) that will also uplift the living standards of workers.

He said a coordinated push on minimum wage and CBAs offers a better pathway to improving workers’ living standards and narrowing income inequalities in the labour market.

‘We have negotiated for a wage increase and some unions are in the process of revisiting CBAs to cushion workers from economic shocks such as fuel prices. We are calling for a 23 percent increase in salaries during this year’s Labour Day,’ said Mr Atwoli.

In 2022, the veteran trade unionist had pushed for a 23.4 percent rise but got about half at 12 percent amid outcry from the FKE.

The employers’ lobby argues that many of its members are struggling and addressing challenges in the business environment will enable businesses to grow and sustainably absorb a higher wage bill.

‘As the Federation of Kenya Employers, we are aware that minimum wages were last reviewed two years ago, but we are also aware that businesses are struggling, and we will be appealing to the government to balance the interest of businesses and the interest of employers,’ said Jacqueline Mugo, the chief executive at FKE.

‘Of great concern to the Federation is the proposal to match the minimum terms and conditions of service in the agricultural sector to those that fall under what we call the general wages council.’

In 2013, then newly elected President Uhuru Kenyatta announced a 13 percent rise in minimum wages barely a month after taking office, before freezing adjustments for three years.

Mr Kenyatta returned to the lever in 2017 with an 18 percent increment in the run-up to his re-election bid, followed by a further five percent increase in 2018.

Wages then remained unchanged until 2022, when he approved a 12 percent rise as succession politics gathered pace.

President Ruto made his first minimum wage adjustment in 2024, approving a six percent increase that raised monthly pay for low-income workers by between Sh486.59 and Sh2,058.18. There was no adjustment last year.

Attention is now turning to whether the President will sanction another rise.

In Nairobi, the minimum wage for househelps is Sh16,113, night watchmen (Sh17,976), drivers (21,748), clerks (Sh24,818) and cashiers (Sh36,330).

Enforcing the minimum wage has been problematic to the government despite the law having a jail term of up to two years for those in breach or a fine of Sh100, 000 for every case.

The Labour Day celebration comes on the back of newly released Kenya National Bureau of Statistics (KNBS) data showing inflation ticked up to 5.6 percent in April, the highest since March 2024, from 4.4 percent in the prior month. The spike in inflation reflects the impact of higher fuel prices amid the Middle East conflict.

A sustained rise in the cost of goods and services at a faster pace than last year could cut workers’ purchasing power unless salaries are increased to beat inflation.

Last year, real wages-earnings adjusted for inflation-grew by 2.0 percent, marking the first time in six years for growth in workers’ earnings to surpass inflation. Real wages had fallen for five consecutive years, including a 0.3 percent shrinkage in 2024.

The positive growth, however, masks the impact of increased statutory deductions — including contributions to the Social Health Insurance Fund (SHIF), housing levy and enhanced remittances to the National Social Security Fund (NSSF) — that ate into employees’ payslips for the better part of last year.

This is because the KNBS uses gross income rather than take-home pay that hits workers’ accounts to compute real wages. However, much slower growth in consumer prices, the main factor that erodes the purchasing power of money, helped push real wages into positive territory for the first time since 2020.

The positive real wages came in a year when the economic growth slowed to 4.6 percent, little changed from 2024’s 4.7 percent, pulled down by reduced activity in the agriculture sector. The statistics office on Wednesday forecast GDP growth of 4.9 percent in 2026, but it said sub-Saharan Africa remained highly vulnerable to shocks caused by the US-Israeli war against Iran.

The growth in real wages saw monthly real earnings for a regularly paid worker or wage employee increase marginally to Sh56,566 last year from Sh55,450 in 2024.

The earnings are, however, still lower than in 2020, when they stood at Sh62,256. This means workers’ earnings have suffered an erosion of Sh5,690 compared to six years ago.

Public employees continued to bear the brunt of the high cost of living, with their real wages falling further to Sh50,041 last year from Sh51,191.67 in 2024.