Category: Business Daily

Total value of Kenya’s mineral output fell to a nine-year low of Sh20.3 billion in 2025, reflecting the closure of titanium ore mines in Kwale County, and exposing the sector’s heavy reliance on the once-dominant mineral.

Latest figures from the Kenya National Bureau of Statistics show the total value of mineral production declined from Sh33.8 billion in 2023 to Sh25.5 billion in 2024 before falling further to Sh20.3 billion last year, the lowest level recorded since 2016.

This drop in value came as the sector recorded a strong rebound in activity, highlighting a growing disconnect between production volumes and earnings.

According to the newly released Economic Survey 2026, the mining and quarrying sector staged a recovery from a 7.8 percent contraction in 2024 to achieve a 14.9 percent growth rate in 2025, making it one of the fastest-growing sectors in the economy.

The growth, however, was driven largely by low-value industrial minerals rather than high-value exports. Increased production of materials used in cement manufacturing-aligned with an 18.0 percent jump in cement output to 10.4 million tonnes-helped meet demand from a construction sector that expanded by 6.8 percent.

As a result, while output increased, the overall market value of minerals declined amid weakening global prices for key exports.

The data shows titanium continued to dominate export earnings in the sector.

‘Titanium ores and concentrates continued to account for the largest share of the total value of mineral output,’ the Economic Survey notes, underscoring the industry’s concentration risk.

However, the value of titanium ore minerals has collapsed, with earnings falling to Sh7.8 billion in 2025, down 53.9 percent from Sh17.0 billion in 2024 and a steep drop from the peak of Sh28.3 billion in 2022.

The decline reflects both softer global prices and the winding down and closure of mining operations in Kwale, which had been the backbone of Kenya’s mineral exports.

Despite the shrinking total value of the sector, workers appear to be benefiting from increased activity.

Wage employment in private mining and quarrying rose by 2.0 percent in 2025, while average earnings grew by 6.0 percent, suggesting that the recovery in production is translating into improved incomes on the ground.

Data also shows mixed performance across other minerals. Gold output increased, supported by expanding artisanal and small-scale mining, while soda ash production also improved.

However, fluctuations in global prices meant that these gains did not translate into proportionate increases in total mineral earnings.

While rising gold production points to gradual diversification, its scale remains insufficient to offset the loss of titanium revenues.

The government-backed exploration efforts, including airborne geophysical surveys and mapping, are beginning to identify new mineral prospects that could boost the sector in the long term.

Artificial intelligence (AI) is increasingly shaping how economies function, influencing everything from how credit is assessed to how services are delivered.

Yet for Africa, the question is not simply how quickly these technologies are adopted, but whether they are built to understand the realities they are meant to serve.

At the heart of AI lies data. The performance of any system depends on the quality, diversity and relevance of the datasets on which it is trained. And it is precisely here that Africa faces a structural disadvantage.

Despite accounting for nearly 18 percent of the world’s population, African data remains significantly under-represented in many global datasets.

African languages, identity systems and economic behaviours are often missing or poorly captured. As a result, systems developed elsewhere frequently struggle when deployed across African markets, not because the technology is inadequate, but because the context it relies on is incomplete. This gap becomes particularly evident in identity verification.

Across many African countries, naming conventions do not follow rigid formats. Individuals may use different combinations of names across official records, academic certificates and employment histories. What is entirely normal in local contexts can easily be flagged as inconsistency or even risk by systems trained on Western data structures.

A similar challenge arises with identity documents. Kenya alone uses a range of identification formats, from national identity cards to passports and emerging digital credentials.

Systems designed around European or North American documentation often fail to interpret these variations accurately, creating friction where none should exist.

Employment data presents an even more complex picture. In many African economies, a significant portion of work occurs outside formal payroll systems.

Individuals move between contract roles, entrepreneurial ventures and informal employment, creating career paths that are dynamic but difficult for traditional data models to capture. When such realities are not reflected in training datasets, automated systems struggle to assess individuals fairly and accurately. The issue, therefore, is not technological capability. It is dataset relevance.

Kenya offers a useful illustration of both the opportunity and the challenge.

The country has developed one of the most dynamic digital ecosystems on the continent, supported by expanding internet access and a globally recognised mobile money platform. Yet much of the data generated within this ecosystem continues to be stored and processed outside the continent.

If the continent is to build AI systems that truly serve its people and markets, it must invest deliberately in developing its own datasets and strengthening its digital infrastructure.

Because ultimately, AI does not succeed in abstraction. It succeeds when it reflects reality. And for Africa’s digital future, that reality must be built on African data.

The High Court has ordered State-owned Kenya Electricity Transmission Company (Ketraco) to pay Sh220 million to a French contractor over the stalled Loiyangalani-Suswa wind power transmission line project.

At the same time, the court rejected the company, Enterprise Generale Malta Forest S.A.S’s claim for Sh500 million compensation in idle time and prolongation costs, ruling that the contractor failed to strictly prove the losses despite citing delays, site disruptions, and non-payment.

The court found that the contractor was entitled to payment for certified works despite failing to fully meet agreed performance targets, marking a significant position in commercial law on partial performance.

The dispute stems from the construction of the 400kV Loiyangalani-Suswa transmission line, a critical project designed to evacuate power from the Lake Turkana Wind Power plant in Marsabit County to the national grid.

Ketraco awarded engineering, procurement, and construction contract to Spain’s Isolux Ingenieria S.A in December 2011, which later, in January 2016, subcontracted part of the foundation works to French contractor, Enterprise Generale Malta Forest S.A.S.

Trouble began when Isolux ran into financial distress, slowing the project and delaying payments to subcontractors.

In January 2017, Ketraco entered a direct payment agreement with the subcontractor and Isolux to accelerate construction by funding additional work teams.

Under the arrangement, Enterprise Generale Malta Forest S.A.S mobilised four additional civil works teams, deployed equipment and personnel on site, and executed foundation works along the transmission line corridor.

It invoiced Ketraco more than Sh321 million. The State agency paid about Sh72.8 million but declined to settle the balance, disputing the performance and certification of invoices.

The contractor sued in 2018, seeking over Sh248 million for certified works and an additional Sh342 million for losses linked to delays, idle time, and disruption.

A second suit filed in 2020 sought an additional Sh179.19 million, pushing the total claim well beyond Sh700 million, with the contractor citing alleged misrepresentation and prolonged site costs after remaining on site awaiting payment.

Ketraco denied liability, arguing it was not a party to the subcontract and that the direct payment agreement did not create a full contractual relationship. It also counterclaimed for Sh74.3 million, alleging the contractor failed to mobilise teams as agreed.

But in the ruling, the court held that the direct payment agreement created a ‘limited and specific contractual relationship’ between Ketraco and the contractor, enforceable within its terms.

‘The defendant cannot therefore run away from the obligations it was bound to perform under the said agreement,’ Justice Njoki Mwangi stated, in a ruling that clarifies how far liability extends in complex infrastructure contracts.

The court found that while the contractor did not fully achieve output targets, evidence showed that part of the work was executed and certified. Payments already made by Ketraco supported that conclusion.

‘The plaintiff’s performance under the Direct Payment Agreement was partial, and that the failure to achieve full performance arose from a combination of factors attributable to both parties, each contributing to the failure to achieve full performance,’ said the court.

Crucially, the court affirmed that certified work must be paid for, even where performance is incomplete, provided contractual conditions are met.

After reviewing invoices and payment records, the court awarded Sh220.7 million tied to certified and comparable invoices, finding them sufficiently proved on a balance of probabilities.

However, the court rejected claims exceeding Sh500 million for idle time, disruption, and prolonged costs, citing the lack of strict proof required for special damages.

‘There is insufficient specific proof quantifying idle time losses,’ the court said, adding that the contractor failed to demonstrate presence on site and actual losses incurred.

The court also dismissed Ketraco’s counterclaim for a refund of mobilisation funds, ruling that partial performance had been established and there was no basis for unjust enrichment.

Further, the court held that the insolvency of Isolux in July 2017 disrupted the project but did not extinguish obligations already accrued under the direct payment agreement.

The court further found that the correspondence cited by the contractor did not amount to enforceable promises capable of creating legitimate expectation.

Ketraco, a State corporation mandated to plan, design, and operate Kenya’s high-voltage electricity transmission network, has overseen key projects linking generation to the national grid.

The Loiyangalani-Suswa line was central to evacuating wind power from northern Kenya, but faced delays linked to financing challenges, land access disputes, and contractor difficulties.

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Importers are paying higher costs to ship goods as disruptions linked to tensions around the Strait of Hormuz ripple through global shipping routes, forcing vessels to take longer and more expensive alternatives.

Kenya Ships Agents Association chief executive Elijah Mbaru said the crisis has triggered an increase in freight charges, insurance premiums and transit fees- costs that are passed on to importers and ultimately consumers.

‘Any cost that a ship undergoes is transferred to the importer or exporter and eventually to the consumer,’ Mr Mbaru said in a phone interview.

Two months into the conflict, shipping lines, also referred to as ocean carriers, are still grappling with uncertainty, with vessels frequently forced to reroute.

In March, major shipping lines, including Maersk, CMA, CGM and MSC, introduced emergency conflict surcharges of between $20 and $40 for 20-foot containers in reaction to the heightened risks.

A contractor building a paediatric emergency and burns management centre at the Kenyatta National Hospital (KNH) has abandoned the site over a Sh184.3 million debt, leaving the Sh2.9 billion facility undone more than five years after the contractual deadline.

Auditor-General Nancy Gathungu said the outstanding amount includes Sh103 million in certified but unpaid construction claims, Sh69.4 million in accrued interest, and Sh11.9 million owed to the project consultant.

This exposes a breakdown in the execution of the contract and in the management of public projects at one of Kenya’s flagship health infrastructure investments.

It also raises fresh concerns over cost escalation, idle capital, and the risk of further financial exposure if the dispute is not resolved.

‘Furthermore, the loan agreement with the external financiers expired on April 30, 2025, and no evidence was provided to confirm continued commitment to funding the project. In addition, the contractor vacated the site, citing non-payment of certified claims under IPC (Interim Payment Certificate) number 15,’ Ms Gathungu said.

Ms Gathungu had previously raised concerns about the same project in her 2024 audit, warning that delays had resulted in avoidable interest charges that could instead fund medical equipment purchase or doctor recruitment.

Treasury has compounded the uncertainty by cutting the project’s budget by Sh900 million in the current financial year, reducing the allocation from Sh2.1 billion to Sh1.2 billion.

The project was awarded on August 20, 2018, with a contract sum of Sh2,959,511,555. The original completion date of August 20, 2020, was later revised to 2023.

Despite multiple extensions granted at the contractor’s request, the facility was still incomplete as of December 2025, highlighting ongoing implementation issues.

‘The value for money incurred on the construction of the Paediatric Emergency and Burns Management Centre could not be confirmed,” said Ms Gathungu, a standard audit qualification signalling that public expenditure has not resulted in a usable asset.

The 214-bed facility was designed to include 82 general ward beds, 14 intensive care unit (ICU) beds, and six high dependency unit beds for burn patients, as well as 82 general ward beds, 24 ICU beds, and six high dependency beds for paediatric emergencies.

KNH’s paediatric department currently treats an estimated 60,000 to 80,000 children annually across its emergency, inpatient, and outpatient services, while the existing burns unit admits around 1,200 patients per year.

Without the centre, the cases continue to be managed in a general emergency facility, which is not designed for specialised treatment, further complicating infection control and increasing pressure on overstretched resources.

Absa Bank Kenya spent Sh717 million on voluntary separation with 82 of its employees in January this year, joining peers who have rolled out similar schemes amid accelerated use of technology across the banking sector.

The lender revealed that the voluntary exit programme was completed at the end of January 2026, and was not reflected in the staff numbers for the year ended December 2025.

Absa did not explain the reasons for the staff exit scheme, though it came in the wake of continued investment in technology. The lender says it spends between Sh2 billion and Sh3 billion on technology every year.

Many organisations use voluntary exit programmes to cut costs, especially payroll, while others deploy the scheme to refresh talent and realign skills with evolving business needs, particularly as technology reshapes roles.

‘Subsequent to the reporting date, the bank implemented a voluntary exit programme affecting 82 employees, with all exits completed by January 31, 2026, at a total cost of Sh717 million,’ the lender said in its annual report. Absa closed 2025 with 2,217 employees, which was higher compared to 2,167 in the previous year.

The spending on staff benefits rose to Sh13.81 billion in 2025, up from Sh13.53 billion the previous year.

Between 2021 and last year, the lender had added 238 employees. The separation with 82 will mark the first time in five years that the Absa Kenya staff size will be reduced, unless the lender recruits new workers.

‘This restructuring decision was made after 31 December 2025 and therefore qualifies as a non-adjusting event, as it reflects conditions that arose after year-end. In line with International Accounting Standard 10, the bank has disclosed the nature and estimated financial effect of this material event.’

This is the latest voluntary exit programme for Absa, which in 2020 spent Sh1.06 billion on a similar initiative that trimmed its staff size by 161. The lender said then that the decision to cut jobs in senior and junior roles was taken on the back of continued investment in automation.

Absa Bank Kenya has a presence in 38 counties, which it serves with 91 branches and service centres, 204 ATMs, over 8,000 agency outlets, and internet and mobile banking platforms.

Chief finance officer at Absa Bank Kenya, Omari Yusuf, said the investment in technology has helped the lender move more of its staff from back office to front office for services such as advisory, thereby supporting the growth of the business.

In addition, he said, the investment in technology has contributed to a fall in operating expenses, reflecting enhanced efficiency.

In the year ended December 2025, other operating expenses fell by 21 percent to Sh7.35 billion, with Mr Omari attributing this to technology.

‘In there are opportunities from automation. We see the use of robotics for some of our key processes and a move to automate channels to give us the opportunity for savings while delivering convenience and flexibility to our customers,’ said Mr Omari.

The digital investments helped Absa’s cost-to-income ratio-a measure of how much the bank spends to generate one unit of revenue-improve to 36.5 percent in 2025 from 46 percent in the previous year.

The first quarter of 2026 opened with a fresh external shock following the US-Israel war on Iran, adding to global market uncertainty.

Despite this, the Central Bank of Kenya (CBK) has continued its rate-cutting cycle, signalling a supportive environment for investors.

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The Competition Authority of Kenya (CAK) shielded 150 jobs after imposing tough terms in sale of Regis Runda Academy to South African multinational ADvTECH in September 2025.

As a precondition for the deal, the competition regulator ordered that all skilled and unskilled staff of Regis Runda, now rebranded to Makini School Runda, be retained on employment for at least 12 months after the completion of the transaction.

‘The acquirer, Makini School Limited, shall retain all one hundred and fifty (150) employees of the target comprising of one hundred and forty- five (145) skilled and five (5) unskilled, on terms that are no less favourable than their current terms of employment with the target for a period of at least twelve (12) months following completion of the transaction’ CAK said.

The proprietors of Regis Runda Academy -Peter Burugu and Mary Burugu- sold the school ADvTECH for Sh1.2 billion, marking one of the largest deals in Kenya’s private education market.

The deal marked an expansion in Kenya by ADvTECH, which first acquired a 71 percent stake in Makini Schools from an entrepreneur, Mary Okelo, for nearly Sh1 billion in 2018.

The buyout of Regis raised the number of schools the South African firm owns in the country to 10, including Crawford International, which is also being expanded in response to increased demand.

Following the buyout, Regis rebranded to operate under ADvTECH’s Makini brand.

‘ADvTECH, Africa’s leading private education provider, has expanded its Makini Schools offering in Nairobi, Kenya, by acquiring Regis Runda Academy for Sh1.23 billion (approximately 172 million Rands),’ the multinational said in a statement following the deal.

ADvTECH, which has schools in several countries, including Botswana and South Africa, plans to offer private education conforming to Kenya’s national curriculum and the Cambridge curriculum.

Regis Runda had been charging slightly higher fees than Makini schools located in Nairobi, offering the same Competency Based Curriculum.

The Burugus own various businesses, including Runda Gardens, a gated community, and Kiambu Mall.

Governors and senators have ended months of confrontation on county oversight after a closed-door meeting sealed a deal requiring devolved government chiefs to appear before Senate watchdog committees, effectively ending a boycott that had threatened to disrupt funding to the units.

The agreement, reached after high-level talks between Senate leadership and the Council of Governors, paves the way for governors to resume appearances before the County Public Accounts Committee and the County Public Investments and Special Funds Committee, which scrutinise the use of billions of shillings allocated to counties.

Council chairman Ahmed Abdullahi, who led the governors’ delegation, had previously accused senators of extortion, harassment and intimidation but agreed to drop conditions that had informed the boycott, clearing the way for renewed engagement.

Senate Majority Leader Aaron Cheruiyot on Tuesday told the House that governors had agreed to ease their stance and begin appearing before the committees, insisting there was no longer any basis to delay Senate business, including consideration of the Division of Revenue Bill.

‘We made it clear to the Council of Governors that while we hear the issues they are raising, they must first withdraw the conditions they had set on non-appearance before the committee, and they agreed,’ Mr Cheruiyot told the senators.

He urged senators to proceed with debate on the Division of Revenue Bill, warning that delays could affect efforts to push for increased allocations to counties and potentially stall the budget process.

However, a section of senators rejected the push to proceed, citing lack of consultation and unresolved concerns over the agreement reached with governors.

Laikipia Senator John Kinyua said lawmakers had been kept in the dark about the negotiations and could not be expected to endorse decisions they were not involved in.

‘We will not just be mere followers. As senators, we ought to be involved in the discussions and know what is going on,’ he said.

Nominated Senator Agnes Kavindu said the House should not proceed with the Division of Revenue Bill until senators are formally briefed on the outcome of the talks.

‘We will not allow tabling of the Division of Revenue Bill until we have a meeting as senators to resolve the issues that were raised,’ she said.

The talks brought together Senate leaders led by Speaker Amason Kingi, alongside Deputy Speaker Kathure Murungi, Majority Leader Aaron Cheruiyot and Minority Leader Stewart Madzayo, while the governors’ team included Abdullahi and his deputy Muthomi Njuki.

The breakthrough follows a prolonged standoff triggered by a boycott in which governors refused to appear before Senate committees, accusing some members of misconduct and turning oversight proceedings into political witch-hunts.

At the height of the dispute, 29 governors failed to honour summons, prompting the Senate to consider coercive measures, including possible arrests, and escalating tensions after an attempted arrest of Nairobi Governor Johnson Sakaja.

Senators had also explored further measures, including withholding funds and involving investigative agencies such as the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations in cases of non-compliance.

Despite earlier resistance, governors dropped their preconditions and agreed to submit to the oversight process, marking a significant climbdown in a dispute that had exposed deep tensions over the limits of Senate authority and the autonomy of county governments.

Under the Constitution, the Senate is mandated to oversee national revenue allocated to counties, including reviewing audit reports and summoning governors to explain expenditure, a role lawmakers insisted could not be compromised.

The impasse disrupted legislative business, including suspension of key revenue-sharing laws such as the Division of Revenue Bill and the County Allocation of Revenue Bill, raising fears of delayed disbursements to counties.