Category: Business Daily

Old money is silent-perhaps as silent as the billions quietly minted by reclusive tycoon Mohamed Jaffer, who for decades has dictated the wheat and other imported cereals that end up on Kenyan dinner plates, as well as the gas used to cook them.

With a keen nose for cash-minting opportunities, Mr Jaffer has built a reputation for pulling off mega deals in times of crisis-often unseen and unheard, operating firmly in the shadows.

Now in his late 70s, the Mombasa-based businessman is known among industry insiders as intensely private, methodical and fiercely protective of his commercial turf.

But a controversial fuel import deal-where One Petroleum Ltd is said to have shipped in 60,000 tonnes of fuel outside the government-to-government import scheme-is dragging the low-profile billionaire into the public spotlight.

Mr Jaffer is among top oil sector executives summoned by the Directorate of Criminal Investigations (DCI) over the multimillion-shilling saga that has already seen senior energy officials resign.

Energy Principal Secretary Mohamed Liban, Kenya Pipeline Company (KPC) Managing Director Joe Sang and Energy and Petroleum Regulatory Authority (Epra) Director-General Daniel Kiptoo all stepped down after their arrest in connection with the same scheme.

Besides Mr Jaffer, the DCI has also summoned Angeline Maangi and Paul Limo to record statements over the imports.

But it is the summoning of Mr Jaffer-a tycoon with a stranglehold on critical port infrastructure-that has raised the most eyebrows.

Styled in business circles as the ‘port man,’ Mr Jaffer has over the years entrenched his dominance at the Port of Mombasa, maintaining an iron grip over strategic import channels.

Through the MJ Group, which he chairs, alongside his son Mujtaba, Mr Jaffer has long exercised control over grain and LPG handling at the port. Increasingly, however, his influence appears to be extending into petroleum products-placing him at the centre of Kenya’s most critical supply chains.

A police source privy to the probe told the Business Daily that Mr Jaffer informed investigators he is unwell and would send a representative to record a statement on behalf of One Petroleum Ltd.

The summons allows the firm to dispatch any representative to explain how it came to import the 60,000 tonnes of fuel.

Investigations further show that the consignment had elevated levels of sulphur, benzene and manganese-exceeding specifications set by the Kenya Bureau of Standards.

In a statement dated April 7, One Petroleum said it was among four firms that responded to an emergency fuel supply request issued by the Energy ministry, adding that it would withdraw the super petrol from the market.

Mr Jaffer’s interests extend far beyond fuel. His footprint spans edible oils, fertiliser and clinker terminals-cementing his position as one of the most influential private players in Kenya’s maritime trade.

For over three decades, he enjoyed exclusive control over bulk grain imports-including wheat, rice and maize-into Kenya and the wider region, including Uganda, South Sudan, Rwanda and the Democratic Republic of Congo, as well as supplies to the World Food Programme.

But he started small.

From a collapsed car dealership of the 1960, Mr Jaffer started again in 1974 with a Sh20,000 loan and went into pallet manufacturing up until 1983.

When the pallet business started slowing down, Mr Jaffer moved into the container business, and ultimately came up with the idea of bulk grain handling after realising that bagging could be done at the silos for a reduced cost and with reduced waste instead of at the quayside.

His ascendency to the billionaire ranks, has counted in stronger political links built in the Moi-era and cemented in the Kibaki regime, with late Prime Minister Raila Odinga known to defend the tycoon’s turf.

Since 2000, the Kenya Ports Authority had licensed Grain Bulk Handlers Limited, which rebranded to Bulkstream Limited-to handle all bulk grain imports at berths 3 and 4 of the Port of Mombasa.

The exclusive mandate, initially granted for eight years to allow recovery of investment costs, expired in February 2008.

Its expiry triggered sustained pressure to liberalise the sector and introduce competition, driven by surging cereal imports-particularly wheat, whose volumes have grown significantly over the years.

The end of the monopoly has since opened a new commercial battleground between Mr Jaffer and interests linked to Mining Cabinet Secretary Hassan Joho.

Traders had long complained that reliance on a single handler led to delays and high storage charges, prompting KPA to approve construction of a second grain-handling facility.

Seeing a fresh opportunity, Mr Jaffer inked an agreement to sell a controlling stake in the grain bulk handling business to a fund manager controlled by South Africa’s Old Mutual Group.

In 2022, the authority awarded a Sh5.9 billion contract to firms associated with the Joho family to build the second facility, citing food security concerns and the need to reduce reliance on a single operator.

The award triggered a protracted legal battle over procurement procedures, with the High Court initially quashing the deal before the Court of Appeal reinstated it.

The Supreme Court has since overturned that decision, ruling that the procurement failed to meet constitutional thresholds on fairness and transparency.

Meanwhile, Mr Jaffer’s dominance in liquefied petroleum gas (LPG) is also facing fresh challenges.

Tanzanian businessman Rostam Aziz, is setting up a rival gas terminal at Dongo Kundu through Taifa Gas, in what could mark the most serious attempt yet to break Mr Jaffer’s grip on the sector.

The High Court recently cleared the Sh16 billion project, allowing construction of a 30,000 tonne LPG facility-escalating what is shaping up to be a high-stakes battle between East Africa’s energy heavyweights. Even as these commercial rivalries intensify, investigators are widening the scope of the fuel import probe.

Detectives have recorded statements from at least 28 individuals drawn from both the public and private sectors, including members of the Vehicle Alignment Committee-a body that coordinates fuel imports and monitors national reserves.

Documents seen by the Business Daily show the committee met on March 18 with 29 attendees, including representatives from the Energy ministry, Epra, KPC, the Kenya Revenue Authority and the National Oil Corporation of Kenya.

Private sector players present included representatives from One Petroleum, Oryx Energies, Gulf Energy, TotalEnergies, Vivo Energy, Rubis Energy and others.

It is at this meeting that the controversial importation outside the government-to-government framework is said to have been initiated.

Former Energy PS Mr Liban reportedly justified the move as a response to supply risks linked to geopolitical tensions in the Gulf region.

So far, senior officials questioned have denied wrongdoing, maintaining that the imports were approved at higher levels to avert a looming fuel shortage.

For Mr Jaffer, however, the episode marks a rare moment in the spotlight for a man who has spent decades building a vast commercial empire quietly-and largely out of public view.

Kenya will issue its debut $500 million (Sh64.5 billion) green sovereign bond before the close of the current financial year in June with the help of the World Bank.

The Central Bank of Kenya (CBK) says that the planned issuance of the green bond is still part of the external financing pipeline earmarked for execution before the close of the current financial year in June.

A Sovereign Green Bond refers to a government fundraiser that seeks to raise money for projects that promote environmental sustainability such as renewable energy, clean transportation and green housing.

‘The Sustainability Linked bond is part and parcel of the Development Policy Operation (DPO) because the World Bank is helping us with it,’ CBK Governor, Dr Kamau Thugge, told the the Business Daily on the sidelines of the Spring Meetings in Washington DC.

‘Obviously there has been some delay but it is certainly not off the table and as we make progress on the DPO we also expect to be making progress on the Sustainability Linked bond.’

Kenya had earlier planned to issue the green bond in March but ended up prioritising smoothing out its debt maturity profile by issuing a fresh $2.25 billion (Sh290.4 billion) Eurobond in February.

This allowed it to buy back $415.0 Million (Sh53.6 billion) worth of Eurobond, which were maturing in 2028 and 2032.

If successful, Kenya will be joining nations like Nigeria which issued Africa’s first Sovereign Green Bond in December 2017 raising $29.7 million and Egypt which raised $750.0 million in September 2020.

Issuance of green bonds has been identified as part of Kenya’s long-term strategy of diversifying funding sources to meet revenue shortfalls without piling too much pressure on the real economy through high domestic borrowing.

‘On the external end, the target is a mix of concessional financing and new instruments such as Sustainability Linked Bonds. The government will explore innovative financing options such as sustainability linked bonds, diaspora bonds, domestic retailbonds, debt swaps, Samurai and Panda bonds,’ the Medium-term Debt Strategy 2026/27 – 2028/29 states.

Kenya faces mounting pressure for unlocking new sources of external financing after the latest round of talks with the International Monetary Fund (IMF) for a new programme and financing in Washington DC were met with push back for expenditure rationalization.

Supplementary Budget I 2025/26 pushed the current financial year’s fiscal deficit to Sh1.3 trillion from Sh923.2 billion, significantly eroding Kenya’s chances of inking a new deal with the IMF.

‘On the status of talks for a new programme, we continue to have discussions with the government of Kenya. We have pointed out to the government that there needs to be a path toward credible fiscal consolidation and that is one of the things that we would like to see for discussions on a new programme with Kenya to advance,’ IMF Africa Director, Abebe Selassie, told the Business Daily.

Successful issuance of a dollar based green bond will strengthen Kenya’s hard currency inflows at a time when the government has been aggressively building buffers to provide a cushion against shocks such as those stemming from the war in the Middle East.

Kenya’s stock of foreign exchange reserves stands at $13.3 billion (Sh1.7 trillion) translating to 5.6 months of import cover.

‘Over the last two years we have been able to build our reserves to a fairly sizeable level. It’s important to look at what has happened with the exchange rate,’ Dr. Thugge says.

‘The reason why we built these reserves was to have a very orderly depreciation in the event of a shock. When this crisis happened, the Shilling was at about 129 and it smoothly went up to 130. The ceasefire was announced and it has since retraced its path back.’

Kenya now hopes that strong hard currency inflows including $1.9 billion (Sh245.3 billion) from the government partial divestiture from Safaricom Plc, at least $750.0 million (Sh96.2 billion) worth of World Bank financing and $500.0 million (Sh64.5 billion) worth of Green Bond proceeds will bolster its foreign exchange reserves and stave of rising pressures.

Picture this: you are at a routine check-up, the one you kept postponing for months because you were busy or felt fine, or because something else always seemed more urgent.

You sit across the doctor, slightly impatient and already mentally back at the office. She runs a few standard tests but finds nothing dramatic.

Then she pauses, looks at the results and tells you that your liver enzymes are slightly elevated and that she would like you to have an ultrasound just to be sure.

You’re not worried, you feel fine, as usual.

A few days later, you receive a diagnosis for a condition you have never heard of. It has been developing quietly while you were working late, eating on the go, unwinding with a drink at the end of a long day and telling yourself that you would start exercising properly the following month.

The bad news

This is how most men find out they have been living with metabolic dysfunction-associated steatotic liver disease (MASLD) for years.

Experts call it the silent epidemic of our time, and it is far more common and serious than most people realise.

But what actually happens inside your liver?

Think of your liver as the engine room of your body. It filters your blood, burns fat, keeps your blood sugar stable and quietly processes everything you eat and drink every day without asking for anything in return.

However, when fat begins to accumulate inside liver cells due to the metabolic pressures of modern living, problems start to arise.

The cells swell and become sluggish, triggering inflammation. Slowly, the liver that has been working so hard for you starts to lose the battle.

“Basically, normal cells are replaced by fatty tissue or filled with fat bubbles, which makes them more swollen and less functional,” says Dr Brian Misoi, a consultant hepatobiliary surgeon at Aga Khan University Hospital. ‘Then there’s inflammation in the liver that can progress in different ways.’

Left unchecked, Dr Misoi says, this inflammation advances to fibrosis-the formation of scar tissue. If left unchecked, fibrosis can progress to cirrhosis, where the liver essentially hardens and stops functioning properly.

“At that stage, the damage is permanent, and the only cure is a transplant,” says Dr Misoi.

The good news

The good news is that there is a long road before you get to that stage – but only if you catch it in time.

Here’s something most men don’t think about: the way we live, and the way many of us have been taught to live, puts a very specific pressure on the liver.

‘Men tend to drink more. Not necessarily in a way that makes headlines, but in an ordinary, socially acceptable way: a beer after work, drinks at the weekend and wine with dinner a few nights a week,’ he says.

None of this feels excessive, but alcohol compounds the damage to a liver that is already under metabolic stress, and over time, this adds up.

Visceral fat dangers

Then there is the belly. Men are more prone to storing visceral fat-the fat that sits deep in the abdominal cavity and wraps around the organs.

Unlike the fat you can pinch beneath the skin, visceral fat is metabolically active in the worst possible way. It drives inflammation, disrupts how your body handles insulin and puts direct pressure on the liver.

‘That comfortable, familiar weight around the middle that many men carry into their 40s and 50s? It’s doing far more damage than it looks,’ says Dr Misoi.

The problem is that men feel fine. Unlike a heart attack, a broken bone or almost any other serious health condition, this one gives you no warning.

‘Most men with MASLD feel completely normal. They are working, laughing and getting through the day with no idea that their liver has been struggling quietly for years,’ he says.

By the time the body starts to send signals such as persistent fatigue, yellowing of the skin or a swollen abdomen, the disease has usually progressed to a stage where treatment options are limited.

‘If you present with symptoms, that usually means the disease has already progressed significantly,’ says Dr Misoi.

MASLD is more than just a liver story. The fat building up in your liver is not happening in isolation. It is a signal-a visible marker of a metabolic system under strain. This same strain affects your heart, blood vessels and brain simultaneously.

More than a liver risk

Dr Misoi says that men with MASLD carry a significantly higher risk of heart attack, stroke, heart failure and certain cancers.

‘The liver is where the problem becomes visible, but the damage is systemic. So, the man who thinks he is simply carrying a bit of extra weight and managing a slightly elevated blood pressure reading is, in many cases, sitting on a much larger health risk than he realises,’ he says.

Avoiding MASLD

Dr Misoi recommends several steps to avoid this condition. The most important thing to remember is that if you catch it early, you can turn it around.

‘The disease is reversible in its early stages, and the prescription is not a complicated one,’ says Dr Misoi.

Lose a little weight. Even losing five percent of your body weight can reduce the fat in your liver. At 10 percent, you start reducing the risk of scarring.

For most men, this is not a significant amount; it is just a few kilogrammes lost gradually through sustainable changes rather than dramatic ones.

Eat better. A diet that is high in protein and low in refined starch and fat puts less strain on the liver. Eat less processed food and white rice and more vegetables and lean protein.

Move more. Aim for 150 minutes of vigorous exercise per week. Five 30-minute sessions where your heart rate climbs, and you break a sweat. This reduces liver fat directly and improves how your body handles sugar. It also helps with weight, blood pressure and cholesterol, all at once.

Know your numbers. Blood pressure, blood sugar and cholesterol. Get them checked and, if necessary, take steps to address any issues. Also, get screened for hepatitis B and C, and if you have never been vaccinated against hepatitis B, book an appointment to do so now.

Dr Misoi notes that alcohol does not cause MASLD, but it makes things worse in a liver that is already under pressure.

‘You don’t have to stop drinking entirely, but you should critically check how much you drink and whether it’s doing more harm than good.’

The value of equities traded at the Nairobi Securities Exchange more than doubled in the three months to March on investor shift to shares and the Kenya Pipeline Company initial public offering (IPO).

The value rose 122.9 percent to Sh58.3 billion as investors moved money from bonds to equities in the search for higher returns.

Listing of the pipeline company in March added new trading volumes from a counter that has offered investors choice and is now the tenth largest at the bourse with a valuation of Sh111 billion.

Listed shares have been the top performing asset class in the last two years with average returns of 50 percent last year wooing investors seeking to capitalise on the current rally.

‘There was hype for an IPO after an 18-year drought which excited the market. It gave the awareness that the market was coming back and good thing NSE has been doing good returns in the last two years,’ said Eric Ruenji, chairman of Theo Capital Holdings.

Interest rates have been on a downward trend with Treasury bonds currently offering between 11percent to 13 percent from up to 18 percent in 2024.

‘Equity prices remained steady in the first quarter, supported by improved valuations after strong earnings for the full year 2025 and favourable interest rates,” said Pergamon Investment Bank.

‘The price momentum was, however, cut short by the ongoing geopolitical tensions, which have so far seen several Central Banks pause their monetary easing initiatives,’ added the investment bank.

Investors were also positioning themselves in profitable counters, especially banks, in the run-up to the financial reporting period as they anticipated high dividend payouts.

Consequently, the banking sector occupied seven positions out of the quarter’s top 10 movers’ list led by Equity Group, KCB Group and Stanbic Holdings.

Equity Group was the most traded counter with 165.6 million shares valued Sh11.9 billion exchanging hands.

‘The banking and telecommunications sectors dominated the market, accounting for 78.8 percent of the total value traded and 49.4 percent of the volume – 930.57 million shares,’ said Pergamon Investment Bank.

Foreign investors were net sellers in the market with the net foreign outflow more than doubling to Sh8.7 billion from Sh3.2 billion at the end of March last year.

The US-Iran war triggered geopolitical tension which drove up foreign exit.

Use of a new M-Pesa platform – referred to as Ziidi Trader – by individual investors has also been cited for increased retail investors participation.

Ziidi Trader has made access to and participating in the equities market easier by allowing investors to transact in shares without going through stockbrokers.

The involvement of M-Pesa opens up the NSE to 30 million users of the payment platform, turning them to potential customers.

Among the top performing companies at the NSE in the last year are small counters such as former tyremaker Sameer which is up 438 percent to trade at Sh16.25, diversified retailer Car and General that is up 223 percent and agricultural firm Eaagads which is up 174 percent.

One common challenge organisations should avoid is separating sustainability-related information from strategy-related performance reporting.

When organisations carefully and successfully integrate sustainability with their purpose, the outcome should be a single comprehensive report for monitoring and managing strategy execution. It ensures that the organisation is focused on financial and non-financial topics that affect its strategy execution.

A poorly implemented sustainability integration, disconnected from strategy, will result in silo reporting, as it does not speak to the business realities on the ground but is simply compliance-focused or a mere tick box.

Having a compliance-only mindset is why organisations fail to apply proportionality and context when implementing sustainability. For instance, some organisations have made sustainability-linked investments that add little or no value to their strategy execution and are not utilised for internal analysis, resulting in siloed sustainability reporting detached from the rest of the organisation.

To avoid a siloed reporting environment, organisations should consider the following.

A critical milestone in a sustainability implementation journey is the materiality and KPI-setting process. The materiality process should be conducted with the understanding that the identified material non-financial issues should support the organisation’s business growth strategy and not be identified in isolation from the organisation’s strategic objectives.

Organisations that fail to link sustainability to their business growth strategy will end up with siloed reporting, as sustainability is disconnected from their business growth and long-term viability agenda. When properly identified, sustainability material topics will be those linked to financial viability and growth, with one comprehensive reporting across the entire organisation.

In addition, the KPI setting process needs to be aligned with an organisation’s strategy. KPIs can be either mandatory or management-defined.

Mandatory KPIs must be complied with in accordance with laws and regulations, and management-defined KPIs require organisations to look beyond compliance to ensure they select non-financial sustainability KPIs that link to the organisation’s overall business growth strategy.

For example, to grow a customer base, organisations may need to focus on non-financial KPIs to monitor any dilution in customer service quality. This will ensure that sustainability-linked metrics track what matters to stakeholders and form part of a single report to monitor performance.

The late Justice David Majanja was a brilliant legal scholar and highly respected within and beyond judicial circles. Known for his reasoned and well articulated landmark judgments in human rights and public interest litigation, Majanja left an indelible mark on Kenyan jurisprudence.

Following his death in July 2024, it came as a great surprise to many that a dispute would emerge over his estate, particularly since he had the prescient wisdom of leaving a written will. But perhaps Justice Majanja chose to continue educating us as part of his legacy, as the legal dispute has surfaced a personal administrative anomaly that should make us sit up and pay attention.

Let me begin first with some kizungu mingi (a lot of English). When you write a will and are subsequently promoted to glory in Kenyan-speak, you are deemed to have died testate. If you are promoted to glory without writing a will, you are deemed to have died intestate.

By leaving a will, you help everyone and their brother since you make it crystal clear how you want your estate to be distributed.

More importantly, a good lawyer will also guide you to ensure that all your dependants are taken care of in the will since the Kenyan Law of Succession Act is quite prescriptive about who the dependants are. Failure to consider your dependants will mean that your wishes can be tampered with by the courts, if an unhappy dependant emerges as having been left out or insufficiently provided for.

In the Majanja case, the court highlighted Section 111 of the Insurance Act which provides that a policyholder may nominate a beneficiary at the point of taking out the policy or at any time before it matures.

Further, within that section, the Act provides that if the policy matures and said beneficiary or beneficiaries have been promoted to glory, then the proceeds become part of the policyholder’s estate.

The court therefore found that Justice Majanja’s group life insurance policy as well as his employee benefits were to be considered an intestate part of his estate, since he had not specifically named a beneficiary to receive the proceeds in the first instance.

The view of the court was that insurance and employee benefits are ‘defined benefits’ rather than claims that would arise from a legal action, what, in legalese, are called ‘choses in action’. Subsequently, since these benefits are defined, beneficiaries should be specifically provided for by the policyholder and/or employee in the event of their passing.

If such person does not name a beneficiary, then this forms part of the intestate part of the estate and is now subject to the rules of intestacy. This means that letters of administration must be sought by a person or people to oversee the distribution of the intestate part of the estate.

All of a sudden, the living space of your earthly home becomes very busy. On the couch sits a set of executors who are managing the distribution of what you have put in your will.

At the dining table sits another set of administrators who are managing the distribution of what you did not specify in the will. As an experienced succession lawyer told me, what Justice Majanja’s lawyer could have added, to avoid all the unfortunate post mortem drama, is a clause in the will that dealt with what is called the ‘residuary estate’.

Such a clause provides for what happens to any assets of the deceased that may be acquired after the writing of the will, or that were not specifically mentioned in the will, thereby protecting those assets from intestacy.

If you are allergic to lawyers in your lifetime, or consider that thoughts and discussions imagining your death are treasonous, then a simple way to avoid post mortem drama is to do a few things.

First, ensure you have named beneficiaries for your insurance policies and retirement benefits. Walk over the human resource department and ask them for one of the million forms that they have to name beneficiaries, more so in the event that your employer has a group life policy for its staff.

Secondly, help your family survive the nightmare of your promotion to glory. Write a schedule of your assets. Update it annually.

Keep it with a trusted friend if you don’t want your spouse to see it. But just make it easy for your family to find your things before the Unclaimed Financial Assets Authority inherits some of them. If you’re not going to write a will that says who gets what, then at the very least, let the who know what the what is!

In the bustling heart of Nairobi, a quiet shift is happening that will determine the winners and losers of the next decade.

For years, the conversation around digital transformation in East Africa has centred on the simple act of going digital, moving from paper to screens or launching a mobile application. Today, the stakes have evolved.

As banks, insurers and manufacturers across Kenya, Uganda and Tanzania scale to serve millions of people across borders, they are hitting a structural wall.

The traditional way of doing business where growth in customers requires proportional growth in staff is no longer sustainable. To compete in an economy increasingly defined by artificial intelligence, our regional enterprises must rethink the mechanics of how they operate.

We operate in a landscape where demand for services is skyrocketing, yet we face unique constraints: mobile-first customers who expect instant gratification, uneven internet connectivity and a complex web of data-sovereignty regulations. Most organisations spend a staggering amount of their most valuable resource, human talent, on predictable and repetitive tasks.

Whether it is a bank teller processing a routine balance inquiry or a logistics coordinator tracking a delayed shipment, these interactions consume skilled capacity without adding a single cent of differentiated value.

This is the structural mismatch we must solve.

Leading organisations are beginning to realise that the goal is not merely to handle demand more efficiently, but to reduce it at the source.

This requires a fundamental shift from siloed systems to orchestrated digital journeys. We are moving toward a world where the primary layer of operations is managed by agentic artificial intelligence. Unlike the basic chatbots many of us have encountered, agentic systems do not just talk, they act.

This shift is not about replacing our people. On the contrary, it is about liberating them. When we automate the mundane, we allow our teams to focus on the high-value work that actually grows a business. However, in a regulated environment like ours, this must be built on a foundation of trust.

We need human-in-the-loop controls and clear policy-based guardrails to ensure that artificial intelligence acts within the law and our own ethical standards.

The success of this intelligent layer depends entirely on the pipes that carry it. In East Africa, connectivity can no longer be viewed as a simple utility like water or electricity, it is a strategic capability. This means that connectivity must be programmed and based on policies.

By treating connectivity as a software-defined service, an enterprise can deliver a seamless digital experience even when the underlying network is unstable.

The increasing presence of hyperscale cloud infrastructure and regional data centers across Africa provides the perfect opportunity to consolidate these efforts. Instead of building fragmented technology stacks in every country of operation, organizations can now centralize their intelligence and governance.

This model uses the cloud as a central control plane. While the execution happens locally to meet regulatory requirements and ensure low latency, the orchestration is unified.

Transitioning to this level of maturity requires a practical and phased roadmap. It begins with a foundation of observability, identifying where the high-volume interactions are and setting up the necessary governance.

The second phase introduces intelligence, where agentic artificial intelligence begins to orchestrate tasks with human oversight. Finally, the enterprise expands into a true ecosystem, monetizing its scale and inviting partners to build on its platform.

During a recent chat with a friend, we somehow drifted into a discussion about some of the complex terms and capital market products. Something interesting that caught my attention, was how money market funds and Ziidi Trader dominated the conversation. Securities lending and borrowing (SLB) also came up.

SLB is the lending and/or borrowing of capital market securities (shares, bonds, among others) for a definite period, with a simultaneous agreement to return them (or their cash equivalent) at an agreed future date, together with an agreed lending/borrowing fee.

Under SLB, one can lend ‘idle’ securities they own but do not intend to sell. This therefore implies that for it to be successful, an SLB transaction needs to have a lender, a borrower, an agreement (usually referred to as SLB agreement), an SLB consideration (or fee) and a platform where the transaction is effected.

A common question is: why would someone participate in an SLB transaction? An SLB transaction is driven by one of three reasons: First, a borrower may need to settle an existing securities debt arising from a previous transaction, where they owe securities to a counterparty.

Secondly, there may be a need to sell borrowed securities with the expectation that prices will fall, allowing the borrower to repurchase them at a lower price, make a profit, and settle their obligation. This is known as short selling.

Thirdly, a borrower with an underlying derivative contract (such as a future, forward, or option) may use SLB to hedge against potential losses by protecting themselves from adverse price movements in the underlying asset.

SLB can generate forward and backward linkages with stakeholders such as custodians, clearing and settlement institutions, derivatives traders, fund managers, pension schemes and investment banks among others, contributing to the establishment and sustenance of a vibrant SLB market.

For securities lenders specifically, it is an ideal opportunity to make extra income by availing their ‘idle’ securities portfolios to those willing to borrow them at a fee, with a commitment to return them at the agreed time.

One of the most important documents in any SLB transaction is the agreement; a contract between counterparties in the transaction. This allows temporary transfer of securities from the lender to the borrower for a fee. It details the name of the borrower/lender identification, the loaned securities, fees payable, collateral provided (by the borrower) to stand-in for the value of the borrowed securities.

The agreement also includes details on how corporate actions (dividends, interest, or voting rights to the lender) will be handled, default provisions, the applicable law and agreement termination clauses. At the international stage, we have the Global Master Securities Lending Agreement, which is a standardised legal framework that governs cross-border securities lending transactions.

So, how are SLB transactions executed? There are three main ways; trading through SLB through bilateral trading, screen-based trading, and hybrid trading. In bilateral trades agreements are direct over the counter customised deals with lenders (like custodians, pension schemes, stockbrokers etc.) using an SLB to directly lend securities to interested borrowers.

Bilateral SLB transactions allow flexible terms on dates, fees and margins among others.

In screen-traded SLB, multilateral transactions involving many borrowers and lenders are executed through an on-exchange formal platform that uses automated processes to execute transactions with borrow/lend orders being matched, based on price-time priority of the SLB orders.

On its part, hybrid SLB trading implies that stakeholders use a combination of both screen-based and bilateral approaches. This leverages quick, anonymous, exchange-traded transactions with the need for customized transactions to optimise efficiency and improve liquidity.

However, SLB activity in Kenya’s capital markets has remained relatively low since the framework was introduced, with only a handful of transactions recorded.

This is largely due to low market awareness, limited availability of lendable securities, operational complexities, and cautious risk appetite among market participants.

To address these challenges, SLB needs positioning as a key tool for improving market liquidity, price discovery, and overall efficiency in Kenya’s capital markets.

In terms of the regulatory environment for SLB in Kenya, all SLB activity is regulated by the Capital Markets Authority (CMA) under the Capital Markets (Securities Lending, Borrowing and Short Selling) Regulations 2017, and the Central Depository (Securities Lending and Borrowing) Rules 2019.

The two legal instruments guide CMA in ensuring market discipline through regulatory oversight, approval and supervision and policy advisory. The Central Depository and Settlement Corporation (CDSC) ensures protection of the parties to any SLB transaction through mandatory collateralisation, daily transaction monitoring and provision of settlement guarantee services for all executed transactions.

However, SLB activity in Kenya’s capital markets has remained relatively low since the framework was introduced, with only a handful of transactions recorded. This subdued uptake is attributed to factors such as low market awareness, limited availability of lendable securities, operational complexities, and cautious risk appetite among market participants.

To address these challenges, SLB needs positioning as a key tool for improving market liquidity, price discovery, and overall efficiency in Kenya’s capital markets.

The Office of the Data Protection Commissioner (ODPC) has recommended the prosecution of directors of a micro-lender for failing to respond to a complaint filed by a former employee over the publication of his images on social media without consent.

Data Protection Commissioner Immaculate Kassait said LOLC Micro Finance Bank published the personal data of Peter Macharia Waithira in public notices and on its social media platforms without his consent.

Ms Kassait noted that despite being served with notification of the complaint, the micro-lender failed to respond.

She said the directors should be prosecuted for obstructing the Data Commissioner, contrary to Section 61(b) of the Act.

‘By failing to respond to the notification of complaint, the respondent obstructed the Data Commissioner in the exercise of her powers under Section 9,’ Ms Kassait said.

Evidence presented before the ODPC showed that Mr Macharia was previously employed by the lender on a contract basis.

On July 28, 2025, he formally tendered his resignation via email, which was received by the employer.

Despite his resignation, the micro-lender allegedly proceeded to publish highly sensitive public notices on its social media platforms, claiming he was no longer associated with the institution and warning the public against transacting with him.

The commissioner noted that the microfinance posted Mr Macharia’s images on its Facebook platform.

During the hearing, the complainant maintained that he did not consent to the processing of his personal data.

‘In light of the above, the office finds that the respondent unlawfully processed the complainant’s personal data,’ Ms Kassait said.

The commissioner added that the lender failed to demonstrate a lawful basis for processing the complainant’s personal data by not responding to the notification.

The lender was given 14 days from the date of the decision to erase the complainant’s images from its online platforms. Failure to comply will result in an enforcement notice being issued against the bank.

The Kenya Revenue Authority (KRA) has directed oil marketing firms to reconfigure their invoicing systems to align with the reduced eight percent value-added tax (VAT) on fuel, intensifying a compliance race and exposing petrol stations to audits.

The directive, issued through KRA’s eTIMS/TIMS operations office, requires fuel stations using third-party tax invoicing systems to introduce a new tax category and update product classification codes.

They are also required to control how the reduced VAT rate is applied within a defined three-month window ending mid-July.

‘The TIS [third-party Tax Invoicing Solutions] should restrict the inclusion of items created with the UNSPSC codes with Tax Type – 8 percent in original sales invoices to between April 15, 2026, and July 14, 2026,’ KRA said in the circular, effectively locking businesses into a narrow compliance timeline with little room for error.

‘Credit notes shall be generated as per the prevailing credit note business rules,’ the taxman said.

The United Nations Standard Products and Services Code (UNSPSC) is a global system used to classify goods and services for financial reporting within enterprise resource planning (ERP) systems.

The VAT cut directive by President William Ruto has proved an operational challenge for fuel stations, which must ensure every transaction is correctly coded, timed and reported within the tax authority’s digital system.

The challenge is compounded by the integration of business systems with KRA’s electronic Tax Invoice Management System (eTIMS), which captures transactions in real time.

This means any errors in applying the new VAT rate – whether due to incorrect coding or timing – are immediately recorded, increasing the risk of penalties and future audits.

The compliance burden is heavier for smaller businesses that rely on external vendors to manage invoicing systems. The tax change requires system updates, testing and deployment within tight timelines, raising costs.

Audit trail

Industry insiders told Business Daily that the directive signals a heightened audit environment. By enforcing strict tax codes and timelines through eTIMS, KRA is creating a detailed digital trail of transactions that can be analysed for compliance after the three-month relief period ends.

This raises the likelihood of scrutiny over how firms applied the reduced VAT rate, particularly where transactions fall outside the prescribed window or system errors occur.

The VAT relief saw the price of super petrol in Nairobi drop by Sh9.37 to Sh197.60 a litre in the latest review by the Energy and Petroleum Regulatory Authority, while diesel declined by Sh10.21 to Sh196.63.

The reductions came barely 24 hours after prices had surged past Sh206 per litre under a 13 percent VAT regime, itself a short-lived revision from the statutory 16 percent rate.

While the temporary VAT cut has eased inflationary pressure in the short term for an economy that runs on fuel, the accompanying compliance demands highlight the trade-off between policy responsiveness and operational stability.