Category: Business Daily

Co-operative Bank is among 11 firms that have received a Sh12.9 billion legacy debt write-off from the National Treasury, with some loans dating back to the 1970s.

The Treasury says the loans, wiped off its books in the year ended June 2026, had accumulated over decades.

Officials add that recovery had been undermined by a range of circumstances, including borrowers’ financial difficulties, the collapse or liquidation of entities and projects, and the lack of proper or traceable loan documentation.

Treasury’s debt schedule shows Co-op Bank, Kenya’s third largest lender by assets and deposit accounts, had Sh267 million written off during the year.

The unpaid loan has raised questions about how the lender, which posted Sh29.75 billion profit last year, was struggling to pay off a debt of Sh267 million, which initially stood at Sh339 million.

But a senior official at the bank said the exposure came from an old government kitty received by the bank for on-lending to smallholder farmers in cotton, irrigation, pyrethrum and dairy sub-sectors, making the liability a legacy government programme rather than recent commercial lending.

The government had tasked Co-op with facilitating the issue of loans to farmers under co-operative societies, collecting the repayments and remitting the money to the Treasury, but poor repayment left residual balances long after the programmes collapsed.

‘A majority of farmers didn’t pay back, and that has reflected as the outstanding amount [in Treasury books] over the years,’ the official previously said.

The write-off leaves Equity Bank as the only privately owned lender remaining on Treasury’s list of borrowers under on-lending arrangements, with the country’s largest lender by deposit accounts owing Sh279 million in arrears from Sh534 million channelled through its network.

The Treasury says the debts chalked off form part of its book clean-up exercise targeting Sh26.33 billion.

The officials add that the Treasury sought Cabinet approval to write off Sh13.29 billion in outstanding principal and waive a further Sh13.04 billion in accumulated interest arrears which had become difficult or impossible to recover.

‘The write-offs were undertaken as part of efforts to clean up the National Treasury’s loan records, address long-outstanding audit queries and facilitate implementation of Public Accounts Committee (PAC) recommendations on non-performing Government loans,’ the Treasury writes in the latest annual debt management report.

The Treasury says the loans had remained unpaid for years due to financial constraints, collapsed projects, ceased operations, missing records, disputes over loan terms and legal changes that transferred liabilities to county governments.

The defunct Local Government Loans Authority accounted for the largest balance among the 11 entities, with Sh7.594 billion outstanding at June 2025 before the debt was wiped from Treasury’s books.

The authority historically facilitated capital development borrowing by local authorities, which accumulated liabilities to the national government before the system was replaced by devolved county governments.

Treasury also wrote off Sh2.461 billion owed by the National Water Conservation and Pipeline Corporation, a body formed in 1987 to develop public water supplies and reduce reliance on the Exchequer.

The corporation has since been reconstituted as the National Water Harvesting and Storage Authority, responsible for strategic national water storage, water harvesting and conservation.

Kenyan boards still book staff transport as a welfare expense: money defended at budget time, but with no expected return. Electrify that same service and measure it, and it begins paying into several company mandates at once.

It lowers a reported emissions figure, holds staff in the roles that are hardest to fill, hedges an imported fuel cost the company does not control and produces evidence that reaches pools of capital purely transport allowance cannot reach. Few line items in a Kenyan company do four things simultaneously.

The question for an executive committee is not whether to spend on moving people to work. Most already do, through allowances, overtime and absorbed lateness. It is whether that spending is arranged so the company can claim something for it.

The reporting regime has set the date. Public interest entities must publish disclosures aligned with IFRS S1 and IFRS S2 for accounting periods beginning on or after January 1, 2027, with large non-listed companies following in 2028. Firms outside both categories meet the requirement second hand, through listed customers and lenders asking for value-chain data.

Under IFRS S2, employee commuting sits within Scope 3 Category 7, and it stays there whether staff arrange their own travel or the company contracts a provider. It is one of the few emissions categories management can redesign outright.

The State has already priced the direction of travel. The National Electric Mobility Policy, launched in February, sits alongside zero-rated VAT on electric buses and lithium-ion batteries and a dedicated e-mobility electricity tariff of roughly Sh16 a unit at peak and Sh8 off-peak. Around 80 percent of Kenya’s electricity comes from renewable sources, and the grid regularly sheds power it cannot sell.

EPRA reported 668.7 GWh curtailed in the year to June 2025, close to 5 percent of everything generated, almost all of it geothermal switched off between midnight and half past four in the morning when demand is at its lowest.

Now set that against the shifts that strand people. Staff finishing at 11pm at night or starting before five in the morning fall back on single-occupancy rides, or chain two and three vehicles each way. Kippra found private vehicles carrying 64 percent of Nairobi’s traffic volume while moving only 22 percent of its commuters. Run those same shifts on electric shuttles charged overnight and the hours that leave employees exposed turn out to be the hours when the grid has surplus renewable power and the tariff is at its lowest.

One procurement decision then touches five mandates together: emissions inside Scope 3, employee welfare and safety at the hours it matters, exposure to a fuel bill set outside the country, and demand placed on the grid when it is cheapest to serve. Mandates normally pursued separately, each with its own budget and report, compound inside a single contract.

The compounding is not automatic. A half-empty electric shuttle achieves very little, because the emissions gain comes first from occupancy and route design and only afterwards from the drivetrain. Electric vehicles carry the emissions factor of the grid that charges them, which in Kenya is low but not zero.

A company that buys the vehicles without measuring the service ends up with the photographs and none of the evidence.

That record is what an assurance provider tests, and the kind of evidence a sustainability-linked loan or bond runs on. Those instruments tie pricing to indicators that must be independently verified, with several years of verified history behind them, which is not something a company can assemble in the quarter before it goes to market.

Safaricom’s sustainability-linked note last November drew Sh41.6 billion in bids against Sh20 billion on offer, while East African Breweries, weighing a similar issue, chose a conventional bond and said a sustainability-linked one becomes an option once the governance and controls are in place.

Demand was never the constraint. Evidence was. Electric fleets in Kenya have already drawn capital from climate funds, development finance institutions and banks lending against electric buses on terms diesel does not attract. The NSE has noted that close to 40 percent of foreign investors now weigh ESG compliance in their decisions. A company that can evidence its own eco-friendly programme is speaking to those pools rather than about them.

The return that lands fastest inside the company is people. Salary bands are widely known and quickly copied; a safe ride home at three in the morning is not. It shows in attendance, in overtime and in attrition on the shifts hardest to staff, particularly among women working nights.

Three decisions follow and they rightly fall at board level. Buy commuting as a service rather than disburse it as cash. Specify electric, and require that whatever is bought reports its own performance monthly in a form auditors and financiers can use.

Importantly, start with the shifts the current transport has already isn’t best suited to, where the welfare gap is widest and the energy arithmetic is most favourable.

When the first mandatory reports are published in 2027, the difference between companies will not be how much they spent on employee welfare. It will be how many mandates that spending was built to serve at once, and whether anyone outside the company can verify it.

Kenya has emerged as one of the three main centres of artificial intelligence (AI) activity in sub-Saharan Africa, but businesses and government agencies are still largely using basic tools rather than deploying the new technology at scale.

The World Bank’s latest Africa Economic Update places Kenya alongside Nigeria and South Africa as the region’s leading AI activity hubs, accounting for much of its innovation ecosystem, venture capital investment, and research output.

The finding puts Kenya at the centre of Africa’s emerging AI economy even as the country faces a gap between widespread experimentation with the technology and its deeper integration into business operations and public services.

‘AI activity is heavily concentrated in Kenya, Nigeria, and South Africa, which account for much of the region’s innovation ecosystem,’ the World Bank says in its October 2026 update.

The report, however, says most African economies remain in the early ‘adopt’ and ‘adapt’ stages, relying mainly on ready-made AI products or modifying existing systems for local needs rather than developing frontier technologies.

‘Although firm-level evidence points to widespread uptake of AI technologies, deployment of more sophisticated applications remains limited and uneven,’ it notes.

Among firms with at least 20 employees surveyed in Kenya and Nigeria, 44 percent reported using AI technologies, compared with 61 percent among surveyed US firms, highlighting the adoption gap between African businesses and those in advanced economies.

Even among firms using AI, the depth of deployment remains limited, with only 36 percent of AI-using firms in the surveyed developing countries applying more sophisticated uses such as AI agents or automation, compared with 56 percent in the United States.

The gap suggests that Kenyan companies are increasingly experimenting with AI, but many have yet to move from using chatbots and generative AI for routine work to embedding the technology in core production and decision-making systems.

The World Bank says firms surveyed in Kenya and Nigeria are mainly using basic AI tools such as AI chatbots and generative AI, while more sophisticated applications remain limited and uneven across businesses.

For smaller enterprises, the challenge is even greater, with only 13 percent of small firms in the countries examined having introduced process innovations in the previous three years and just 35 percent having a basic web presence.

The World Bank says AI could add as much as $1 trillion (about Sh130 trillion) to Africa’s gross domestic product (GDP) by 2035 under an ambitious scenario in which countries close major gaps in data, computing capacity, skills, trust and capital.

Under current preparedness levels, however, AI integration across Sub-Saharan Africa could add only 0.2 percentage point to cumulative GDP over the next decade, rising to as much as four percent under broader and faster adoption.

The warning comes as Kenya seeks to turn its existing technology base into a larger source of productivity, jobs and investment through the National AI strategy 2025-2030.

The strategy, launched in March 2025, identifies AI digital infrastructure, data and AI governance, as well as AI research, innovation and commercialisation as its three main pillars.

The government has since shifted attention towards implementation, with the ICT ministry saying in September that the focus should move from policy development to measurable gains in productivity, jobs, enterprise growth and public services.

The World Bank report shows that public-sector AI adoption is also still at an early stage, with governments using the technology more frequently for chatbots and virtual assistants responding to public queries, followed by workflow automation and knowledge management.

AI applications for direct service delivery to citizens and support for frontline public workers rank lower than in high-income and upper-middle-income economies, leaving a large opportunity for governments to use the technology beyond administrative functions.

Across 15 sub-Saharan African countries surveyed by the World Bank, 90.8 percent of AI systems identified through government procurement records supported internal functions, while 88.9 percent relied on predictive or optimisation models and only 1.4 percent used generative AI.

Only three of the 15 digital agencies surveyed had provided enterprise generative-AI licences to civil servants, further underscoring how far public institutions remain from widespread AI deployment.

The World Bank estimates that the near-term automation risk in sub-Saharan Africa is 2.6 percent of jobs, against 14.2 percent in high-income economies, while the potential for AI to augment workers is considerably higher at 15.2 percent.

The report notes that outside agriculture, 53 percent of Kenyan women are in occupations exposed to AI compared with 38 percent of men, while more than one-third of higher-income workers could potentially be assisted by AI compared with only four percent in the lowest income quintile.

The World Bank cautions against an African race to build expensive frontier AI models, arguing that the bigger near-term opportunity lies in adopting and adapting affordable tools that solve specific local problems.

‘Most near-term opportunities come from task-specific applications embedded in existing workflows rather than from frontier innovation,’ says the multilateral lender in the report.

‘Observed patterns of use also point to augmentation as the more relevant development channel in the near term.’

Kenya currently faces infrastructure constraints that could limit the next phase of adoption, including unreliable electricity, costly devices and data and shortages of AI-related skills.

Africa has 18 percent of the world’s population but only 0.6 percent of global data-centre capacity, while only about five percent of African data centres are considered AI-ready, according to the World Bank.

The Bank says regional cooperation will be critical, particularly in building shared computing infrastructure, interoperable data systems, harmonised regulations and larger markets for AI-enabled products.

The World Bank’s latest economic outlook projects Sub-Saharan Africa’s growth to rise from 4.1 percent in 2025 to 4.3 percent in 2026, but warns that this pace remains insufficient to create enough jobs for the region’s rapidly expanding workforce.

If business is a game, and you could only make one move, what would it be? What is your one game changing leap forward? Are you standing still or moving? In business, is everything a matter of perception, dependent on the position of the observer? Even sitting at your desk ‘at rest’ you are actually spinning with the earth’s rotation of 1,040 miles per hour (mph), with the earth orbiting around the sun at 67,000 mph. Reason you don’t notice it is, you are moving with the earth. “Motion is always relative to a reference frame” was Albert Einstein’s observation.

Same in business, we often don’t notice the velocity of thought, fast changing practice-and the need to focus. Not noticing the big picture, we migrate toward comfort, and conserve energy with the law of least effort, following the statistical certainty of regressing toward the mean. Our default survival programming is ‘I am always right’ but this software mindset setting can cause us to crash.

Is there a quick way to accelerate your speed to value? Are you what you focus on? Does it make sense to focus on a wide exotic portfolio of indicators, or act on just one big constraint?

Every complex system has at least one limiting factor known as a bottleneck or constraint that restricts its ability to reach its highest goal. Theory of constraints is a management practice introduced by Eliyahu Goldratt in his 1984 book The Goal. With an original focus on manufacturing – and now with a wide application – this method helps organisations boost performance by focusing improvement efforts entirely on the weakest link, rather than spreading resources thin across non-critical areas.

Goldratt’s ‘Theory of Constraints’ runs on a continuous improvement cycle, based on 5 steps.

Identify: Find the part of the process that limits the entire system’s output. Exploit: Maximise the output of the constraint, using existing resources without major upgrades. Subordinate: Align all other non-bottleneck activities to match the pace of the constraint. Elevate: Invest more time, money, or staff to permanently increase the capacity of the constraint. Repeat: Prevent inertia from creating a new bottleneck, and move on to the next constraint.

One blockage

A business or development partner is usually not constrained by everything that is going wrong. It is controlled most by one thing that most limits the flow of value. A smart manager’s job is not to improve everything. It is to find the bottleneck and make the whole business work around it. Trick is to identify the one dominant constraint. ‘If we could fix only one thing in Acacia Finance over the next 30 days, what would have the greatest effect on revenue, cash flow and profitability?’

For instance, if you ask a budding entrepreneur why she is having a problem starting a business, most she will say lack of funds. But the real constraint may be proving the business idea solves a pressing problem, that the customer is ready to pay for. In Red Oak Design, the constraint could be, for instance, poor product-market fit, slow delivery, a key person’s poor decision-making. Ask: where does work, money or customers get stuck?

It helps to fully exploit the constraint. Suppose Red Oak Design discovers that its sales team can generate more orders than the factory can fulfil. While the instinct might be: ‘buy another machine’ the theory of constraints says — first get maximum output from the existing constraint. For example, eliminate machine downtime, schedule the machine around highest-value products, or stop unnecessary changeovers. It would not be surprising to discover that the business has 20 to 30 percent more capacity already available.

Subordinate everything else to the constraint. Once the constraint is identified, the rest of the organisation should support it. If the factory is the constraint, sales should not aggressively sell products the factory cannot produce. Elevate the constraint. Only after exploiting it should management spend money to increase capacity.

Repeat the process. Business systems are dynamic, everything is connected. ‘At any given time, the input that is most important to a system is the one most limiting’ advises systems thinker Donella Meadows. After fixing the first constraint, another road block soon emerges.

Shift from asking ‘How do we improve the business?’ to ‘What is preventing this [existing] business from achieving substantially more?’ That distinction is enormous. BlueCloud Solutions may have poor marketing, inefficient HR, outdated IT, no strategy and mediocre operations. But fixing all five simultaneously may produce very little improvement if the real constraint is, say, customer demand or cash flow. Best to take a small experiments approach: Identify the suspected constraint, run a quick one week experiment to test whether removing it actually improves performance, and then decide whether to scale the solution.

Banks have secured relief from a tax claim on interest earned from borrowers who delay loan repayments after the Tax Appeals Tribunal ruled that default interest is not subject to excise duty.

The ruling gives lenders grounds to challenge similar tax assessments by the Kenya Revenue Authority (KRA), potentially reducing their tax bill on income earned from overdue loans.

The tribunal ruled in favour of M-Oriental Bank, finding that default interest charged to customers who fail to repay loans on time constitutes ‘interest on loan’ or ‘return on loan’, which are excluded from excise duty.

Default interest is increased or penalty interest rate that a lender charges when a borrower misses a payment, goes into arrears, or breaches a term in a loan or credit agreement

The case arose from a KRA audit of M-Oriental Bank covering 2019 to 2023, after the taxman assessed the lender for excise duty, penalties and interest on its default interest income.

Bowmans Kenya tax analysts said the tribunal’s September 18, 2026 decision provides a key guidance to financial institutions on the treatment of default and penalty interest under the Excise Duty Act.

‘The judgment reinforces that default and penalty interest on loans should not attract excise duty,’ Bowmans said in its analysis of the ruling.

‘Financial institutions that have received excise duty assessments on default or penalty interest should review those assessments in light of this decision and the growing body of consistent judicial authority.’

KRA had argued that default interest charged by M-Oriental Bank constituted ‘other fees’ earned from its licensed financial activities and was therefore subject to excise duty.

The taxman’s position would have cost the lender millions of shillings, given that the KRA assessment was on amounts totalling about Sh1 billion, inclusive of penalties and interest.

Financial institutions are required to pay 20 percent excise duty on ‘other fees’ under the Excise Duty Act. However, the law expressly excludes interest on loans and returns on loans from the definition of fees subject to the tax.

‘Other fees include any fees, charges or commissions charged by financial institutions relating to their licensed activities, but does not include interest on loan or return on loan or any share of profit or an insurance premium or premium based or related commissions specified in the Insurance Act or regulations made thereunder,’ reads the act.

The tribunal rejected KRA’s interpretation of the law, holding that default interest falls within the excluded categories of interest on loans and returns on loans. The ruling also considered changes to the tax law during the period covered by the dispute.

The Finance Act, 2019 amended the definition of ‘other fees’ from November 7, 2019 to expressly exclude fees or commissions earned in respect of a loan from excise duty. That exclusion was later removed by the Finance Act, 2021, with effect from July 1 of the same year.

The tribunal found that default interest remained outside the excise duty charge because it constituted interest on a loan or return on a loan.

The decision adds to the growing judicial guidance limiting KRA’s attempts to impose excise duty on default interest. A previous High Court decision involving SBM Bank Kenya also found that excise duty does not apply to default interest.

KRA’s argument has been that interest for late payment of loans is ‘interest,’ and therefore excluded from definition of ‘other fees’ under the Excise Duty Act.

However, the court held that the default interest charged by banks is ‘interest’ and not ‘other fees’ for purposes of the Excise Duty Act and is therefore not subject to excise duty.

In the case of SBM, which was decided in March this year, the court said that while the Excise Duty Act did not have a definition of ‘interest’, any such ambiguity arising from interpretation must be resolved in favour of the taxpayer.

Kenya ranks behind Rwanda in tax and revenue mobilisation, highlighting the country’s challenges in expanding its domestic revenue base amid persistent collection shortfalls.

A new report by the Mo Ibrahim Foundation ranks Kenya 10th among African countries on tax and revenue mobilisation, with a 2025 score of 67.9 points, compared with Rwanda’s 68.6 points in ninth place.

The UK-based non-profit said its scoring is based on African governments’ ability to mobilise different revenue streams, and the maximum level of taxes a country can collect without detrimental effects.

Kenya’s score improved by 4.6 points from 2015, and the country is among 16 African states classified as showing ‘increasing improvement’.

This means its 2025 score was higher than in 2016, and they were improving at a faster rate from the midpoint of the period in 2021.

The Mo Ibrahim Foundation, established by Sudanese-British billionaire and philanthropist Mo Ibrahim, assesses and scores governance performance across security, rule of law, economic opportunity, and human development sectors.

It said South Africa led the continent’s tax and revenue mobilisation with a score of 92.4, followed by Côte d’Ivoire at 83.3 and Namibia at 80.0. Lesotho, Senegal, Mauritius, Seychelles and Botswana also ranked ahead of Kenya.

‘Within the top ten highest-scoring countries, there is also a large gap between the 10th ranked country, Kenya, which scores 67.9, and South Africa ranked first with 92.4,’ the report says.

‘This is a gap of 24.5 points across just ten countries, pointing to a wide capacity gap on the continent, even among higher scoring countries.’

Kenya continues to struggle to meet its revenue targets, forcing the National Treasury to rely more heavily on domestic borrowing to bridge budget financing gaps.

The Kenya Revenue Authority (KRA) collected Sh1.81 trillion in ordinary revenue in the nine months to March 2026, missing its Sh1.98 trillion target by Sh161.9 billion.

Corporation tax recorded the largest shortfall among the major tax heads at Sh60.3 billion, followed by Pay As You Earn (PAYE) at Sh50.1 billion and value added tax (VAT) at Sh42.8 billion.

Excise duty missed its target by Sh19.2 billion, while investment income was Sh43 million below target.

The shortfall came despite ordinary revenue increasing from Sh1.58 trillion collected over a similar period a year earlier.

The government has also faced pressure to offer tax relief to cushion households and businesses from economic shocks, including concessions introduced to contain the effects of the US-Israel war on Iran.

The concessions included a reduction in VAT on petroleum products, putting additional pressure on revenue collection at a time when the taxman is already struggling to meet its targets.

Across Africa, the Mo Ibrahim Foundation found that the average score for tax and revenue mobilisation declined by 1.5 points between 2016 and 2025.

‘While this deterioration is relatively minor, it highlights the growing gap between the expectations and aspirations surrounding domestic resource mobilisation and the overall reality of the administrative capacity on the ground,’ the report says.

South Africa’s score has been around the 90-point mark throughout the decade, which the report says suggests a ‘robust and mature taxation capacity’.

Rwanda and Kenya were among the 16 countries showing increasing improvement, while the bottom 10 included Somalia at 30.6 points, Democratic Republic of Congo at 29.6, South Sudan at 12.1 and Sudan at 11.8.

Of Africa’s eight regional economic communities, the East African Community (EAC) was the only one to record a positive average 10-year change in its score.

The improvement was largely driven by Somalia, whose score increased by 13.9 points from a low base, following efforts to establish a standardised National Revenue Authority to centralise tax and other revenue collection services.

The Southern African Development Community (SADC) had the highest score among the regional blocs at 60.3 points in 2025, driven mainly by South Africa’s consistent performance.

The Intergovernmental Authority on Development (IGAD) recorded the largest decline at 6.5 points, driven by deteriorations in Eritrea, Djibouti and Sudan.

Six investment vehicles linked to Cytonn have lost a bid to overturn the cancellation of their titles for properties in Nairobi, Kiambu and Machakos counties that were registered under the Official Receiver, leaving the State as the properties custodian.

The Environment and Land Court ruled that the land registrars did not act independently or unlawfully in cancelling the titles and registering the Official Receiver, but were carrying out binding preservation, vesting and implementation orders issued by the Insolvency Court and upheld by the Court of Appeal.

The properties include residential, commercial and mixed-use developments, ranging from luxury villas in Karen to large residential communities in Ruiru, Ruaka, Ridgeways, Kilimani and Athi River.

The decision removes a legal challenge to the Receiver’s registration over the properties, but does not free him to dispose them of because earlier Supreme Court orders stopping enforcement of the vesting orders remain in force pending the appeal.

The ruling concerns projects described as Kilimani, Riverrun, Taraji, The Ridge, Applewood and Mystic Plains.

At the same time, the High Court has suspended a constitutional petition by Goal Advisory Africa, trustee of the regulated Cytonn High Yield Fund representing more than 24,000 investors, pending the Supreme Court’s determination of the properties dispute.

The rulings arose from the liquidation of Cytonn High Yield Solutions (CHYS) LLP and Cytonn Real Estate Project Notes LLP, placed under liquidation in January 2023.

The State began seeking bids for several properties in March 2026 as part of efforts to recover about Sh11 billion owed to more than 3,000 investors. The properties included The Ridge, Taraji Heights, Applewood Villas and three Kilimani parcels.

In the first case, Cytonn Investment Partners Four, Five, Ten, Eleven and Sixteen LLPs and Epazec Company LLP challenged the Chief Land Registrar and land registrars in Nairobi, Kiambu and Machakos.

They wanted the court to quash cancellation of their titles and restore their names in the land register.

They argued that the registrars acted without notice, breached the Land Registration Act and violated their property rights and right to fair administrative action.

The applicants told the court that the Chief Land Registrar and other land registrars unlawfully cancelled their titles, registered the Official Receiver as proprietor and issued provisional titles without notice or compliance with Section 33 of the Land Registration Act.

They said some properties had competing titles and that several had been advertised for sale.

The Official Receiver disputed that account, saying the High Court had preserved the properties after finding a connection between investor money and their acquisition.

It said the court later vested the properties in the liquidator and authorised steps to issue provisional titles where original documents were not surrendered. The Court of Appeal upheld those orders on November 21, 2025.

The registrars said they had no independent discretion because they were implementing court orders.

Justice Christine Ochieng agreed, finding that statutory procedures governing provisional titles did not apply where registration was undertaken pursuant to a court order.

‘Judicial review cannot be used to seek to circumvent compliance with a subsisting court order nor as a substitute for appeal. Judicial review is unavailable because there was no independent administrative decision to review or quash,’ the judge said.

In the second case, Goal Advisory Africa asked the High Court to compel the Chief Land Registrar to disclose the documents and process used to issue the provisional titles, but the request was declined.

The trustee said it represented a regulated fund with more than 24,000 investors and held first-ranking creditor interests exceeding Sh267.9 million over the properties.

Justice Patricia Nyaundi declined to compel disclosure, holding that Goal Advisory had not first used the procedure under the Access to Information Act. ‘The applicant has not laid a basis for not proceeding as provided for under the Act,’ she ruled.

The court suspended the petition pending the Supreme Court case and directed that it return on February 3, 2027.

Africa has the potential to develop and advance a specialised agricultural industry, supplying cosmetic extracts to global cosmetic manufacturers. While coffee, tea and flowers have contributed significantly to economic empowerment, the opportunity to cultivate and process botanical ingredients for beauty and personal care deserves added attention.

Often, the easier path is to grow and export raw materials. However, greater economic value could be captured through extraction and processing of ingredients that cosmetic formulators can readily incorporate into their products. The economic difference between exporting raw botanical materials and supplying standardised extracts could be substantial.

The opportunity is already evident in existing trade. In 2024, Kenya exported approximately $6.5 million worth of essential oils under one product category, while South Africa sold about $20.4 million in the same category.

Further, Research published in Frontiers in Sustainable Food Systems also documents how Namibia’s Eudafano Women’s Co-operative has supplied marula oil to international cosmetic companies, including The Body Shop. These figures evidence that African producers are already participating in international botanical ingredient supply chains, with considerable scope to explore further opportunities in local processing and export development.

The skincare industry has experienced significant growth, with botanical extracts increasingly being explored for their potential to address concerns such as hyperpigmentation and support skin barrier function. That said, the economic opportunities for farmers, local processors, laboratory professionals and manufacturers could be substantial.

The greater challenge, however, is how the continent can develop a competitive botanical ingredient industry capable of meeting the standards required by cosmetic formulators in markets such as South Korea, the European Union and the United States.

To achieve and maintain these standards, there must be reliable cultivation, extraction facilities, laboratory testing, traceability systems and consistent quality control. Research published in the South African Journal of Botany demonstrates how African plant resources can supply ingredients for specialised cosmetic applications. The paper reviewed several commercially important African botanical oils, including marula, baobab and Kalahari melon seed oil, highlighting their potential applications in the cosmetics industry.

A review published in Pharmacia further supports the importance of technical expertise in developing specialised cosmetic ingredients. These studies provide a useful starting point for examining the relationship between botanical research, intellectual property and industrial growth.

It would be interesting to explore how Africa can translate its botanical research into commercially viable cosmetic ingredients through stronger collaboration between farmers, scientists and manufacturers. Such an approach could create new opportunities for agricultural exports, local industrial growth and greater participation in the global beauty industry.

The Central Bank of Kenya (CBK) penalties imposed on commercial banks and foreign exchange bureaus rose 57.6 percent to Sh93 million in the year ended June 2026, coinciding with the period when the regulator tightened sanctions for breaches of banking rules.

Latest CBK disclosures show that penalties rose from Sh59 million a year earlier, although they remained below the Sh191 million recorded in 2024. The CBK did not disclose the identity of the banks it fined.

Penalties stood at Sh66 million in 2023 before surging to Sh191 million in 2024. They then fell to Sh59 million in 2025 before the latest rise.

The increased penalties came during the period CBK implemented a new penalty framework that made sanctions more effective and dissuasive.

The Banking (Penalties) Regulations, 2025, set out specific penalties for violations of the Banking Act, with the framework providing for penalties linked to the seriousness of breaches and the financial benefit obtained or loss avoided.

The rules cover a wide range of violations, including breaches of minimum capital and liquidity requirements, excessive lending, failure to disclose loan terms and non-compliance with CBK directions.

The regulations commenced in July last year, with CBK providing for penalties of up to Sh20 million or three times the gross monetary gain made or loss avoided.

‘The amendment ensures penalties are effective, proportionate, dissuasive, aligned with global standards, and entrench a compliance culture in banks,’ the CBK said in its annual report.

In the year ended December 2025, CBK stepped up scrutiny of how lenders price credit following reductions in the Central Bank Rate (CBR). For instance, CBK said in its 2025 annual supervision report that it fined a record 33 commercial banks after inspections found breaches linked to the implementation of its risk-based credit pricing model.

The 33 lenders represented 86.8 percent of the 38 commercial banks inspected, while two other banks faced administrative action. Only three banks were found to be fully compliant with the model.

The inspections followed repeated reductions in the CBR and pressure on lenders to pass lower funding costs to borrowers. CBK had cut the benchmark rate seven times between August 2024 and August 2025, bringing it down from 13 percent to 9.5 percent.

The enforcement push coincided with the rollout of the revised risk based credit pricing model, which uses the Kenya Shilling Overnight Interbank Average (Kesonia) as the common reference rate for variable rate loans.

The banking regulator last year repeatedly pressured banks to lower borrowing costs and match cuts in the benchmark rate while threatening daily fines.

‘Beba! Beba! Beba! Kiambu soo!’ John Njoroge’s voice cuts through the afternoon bustle of Nairobi’s CBD, rising above the roar of engines, blaring horns and hurried footsteps.

Clutching a placard advertising the fare and destination, he calls for passengers headed to Kiambu.

But behind the booming voice is a tired man. He’s been doing this for 18 years.

At 42, Njoroge, fondly known as ‘Macha’ among fellow matatu touts, is beginning to feel the physical demands of a job that requires the energy of a much younger man.

‘I have made up my mind. I will retire at 45. It is not easy to walk away from such a job that I find lucrative. Most people don’t think ndondas (touts) make good money. Some of us earn more than people in corporate jobs. How many jobs do you get paid Sh2,500 ?”

For Macha, the daily income has been more than a wage. He describes it as his retirement package and pension, paid to him in cash every evening.

Over the years, he has channelled part of his earnings into real estate, poultry farming, animal husbandry and, more recently, matatus of his own.

His most significant investment so far is a commercial-residential building that he says he constructed from his earnings as a tout.

The property that cost him a ‘few million’ shillings has 14 units and provides him with monthly rental income of about Sh100,000.

‘My plan is now to expand my property portfolio after retirement. I have already acquired several parcels of land on which I intend to develop more commercial residences. So, as you can tell, even in retirement my hands will still be full,’ he says.

All this, he says, has been the work of Sh1,000 he saves with his Sacco on a daily basis.

‘I have done that for at least 15 years, saving Sh1,000 every day I go to work, and even when a day isn’t that good, I still manage to save Sh700. So, in every five days I save Sh5,000.’

A profitable habit

The saving habit, he says, is something many of his younger colleagues struggle to develop. The matatu business provides an unusual combination of immediate cash and the temptation to spend it immediately. For young touts, he says, knowing they can wake up the following morning and earn again can make saving seem unnecessary.

‘You will not find so many old touts like me. Most are young enough to be my sons. They are at an age where all they think about is partying and having the fine things in life. There is nothing wrong with that; we were once young too. The problem is when they get carried away by the fact that even if they spend all the day’s earnings, they still have tomorrow to make money again.’

The consequence, he says, becomes apparent when the income stops.

‘When most of them lose their jobs, often due to indiscipline, they have nothing. Even those who stay longer, when they finally leave the job, they have nothing to show for themselves.’

Creating income streams

For Macha, saving has also meant creating income streams for his family. Part of that seed capital went into setting up a poultry business for his wife of 22 years.

They have four children and are already grandparents. Their home is in Nakuru, where his wife keeps about 300 indigenous chickens and collects roughly six trays of eggs a day.

The market, he says, is relatively dependable, with hotels and consumers increasingly seeking indigenous and locally produced food.

‘Every time I ask to borrow Sh30,000 or Sh50,000 from her, she doesn’t struggle to get that amount,’ he says with a chuckle.

‘By the way, she was also a major supporter when I was putting up the apartment. I don’t meddle much in her business. Her poultry business is doing great and perhaps when I retire I would love to help her expand it further.’

Planning for retirement

For his retirement, changing the kind of work he does from the super intensive dawn-to-dusk matatu job to more of a farm managerial role sounds ideal. ‘I want to go back home to Nakuru and spend most of my time with my wife.’

His latest investment is in the very industry he intends to leave as a worker. About two weeks ago, Macha bought his second Nissan Shark.

The two vehicles operate on the Mahi Mahiu – Naivasha route, with each depositing Sh2,500 a day into his account after expenses, including fuel.

Unlike his current job, where his income depends on his physical presence, the matatus allow him to earn through employees.

‘I have employed some young touts. Those matatus work every single day. These are energetic kids who don’t think they need to rest, so I let them work,’ he chuckles.

His target is to have five matatus by the time he retires. For this kind of business, he prefers second-hand vehicles, arguing that a new matatu would tie up too much capital.

‘With Sh450,000, you will get a good, well-conditioned Nissan Shark.’ But his bigger plan, Macha says, is to acquire a 33-seater bus, commonly known as a manyanga, and put it on the Mahi Mahiu-Naivasha route.

His experience operating a 33-seater on the Nairobi-Kiambu route has convinced him there is money to be made if the vehicle is properly managed.

‘You need at least Sh7 million for a 33-seater like the one I operate, which I do not own. I plan to have one for myself and line it on the same route because, unlike Nairobi-Kiambu, the route has few minibuses. I want to introduce a manyanga on that road, with good music, well-maintained, pimped and clean because these are the elements that attract clients,’ he says.

His calculations are based on what he has observed first-hand on the Nairobi-Kiambu route. On a good day, he says, the 33-seater can make eight trips with passengers paying Sh100 for the journey.

At full capacity, he calculates, the vehicle can collect Sh3,300 per trip, translating to roughly Sh26,400 over eight trips. Fuel takes Sh10,000, while the driver, tout, stage manager and Sacco also have to be paid before the balance of about Sh12,000 is deposited into the owner’s account.

This math convinced him the investment could work.

‘With that knowledge and the fact that there are about 200 matatus on our Nairobi-Kiambu route, I see there is a good opportunity for me to make a killing with a manyanga on that Mahi-Mahiu route that has fewer minibuses.’

Agribusiness

And as December holidays near, Macha says he is waiting to cash in on the black-headed sheep he has been rearing on one of his parcels of land.

‘This will be the main project once I retire. I realised there is high demand for the black-headed sheep. I currently have 10 up for sale, and with the December holidays fast approaching, I won’t accept anything less than Sh20,000 per sheep. That means I am looking at Sh200,000 revenue and over 200 percent profit, because I was buying each at Sh3,000 before maturing them.’

While his farm can comfortably handle as many as 100,000 sheep, Macha prefers to keep his expenses on the low.

‘My target is taking care of just 50 sheep. That way it becomes easier to properly take care of them and mature them for the market. When well taken care of, they give birth twice in a year, so it’s easier to multiply them in smaller numbers and mature them for the market.’

Vacations and holidays

For the class three dropout and third born of 13 siblings, after spending seven years of his younger life on the streets of Nakuru and much of his adult life chasing passengers through Nairobi’s streets, he now wants to spend his twilight years travelling with his wife, expanding their businesses and enjoying the comfort that his savings and investments can provide.

‘Ooh, I love my wife so much. I want to believe I have done something meaningful to secure my future and that of my wife,’ he says. ‘When you get someone who gets you, I say stick by them. I want to enjoy life with my wife, go on vacations and holidays now that we will be having more time.’