Category: Business Daily

Gulf Energy wants the government to extend the railway to Lokichar in Turkana County by 2030 to transport crude oil to the port of Mombasa, marking a departure from the State’s earlier plan to build a pipeline.

The firm has in its Field Development Plan (FDP) proposed the construction of a meter-gauge railway (MGR) from Lokichar, then connect it to the main MGR line at Kitale, Eldoret, Nakuru, Nyahururu, or Nanyuki.

The proposed construction of the railway, to be fully funded by the government, is a shift from the earlier plan to build an export pipeline from the oilfields to the port of Lamu at an estimated cost of $1.5 billion (Sh193.5 billion at current rates).

Gulf Energy targets to start commercial production of the oil from six discoveries within blocks T6 and T7 in South Lokichar by the end of 2026 and will initially rely on trucks to transport the commodity when production starts at 20,000 stock tank barrels per day (stb/d).

‘GEBV (Gulf Energy BV) requests that GOK (Government of Kenya) provide a railway line in Lokichar, Turkana by H2 (second half) 2030 to support increasing production to 50,000 stb/d,’ Gulf Energy says in the FDP, which is now awaiting ratification by Parliament.

The combined costs of trucking and rail transport in the two phases are estimated to be $5.32 billion (Sh687.29 billion at current rates).

Oil production will be done in stages, with the first stage targeting 20,000 stb/d from 48 wells in the Ngamia and Amosing fields. Monthly exports are projected at 600,000 barrels.

The second phase will ramp this to 50,000 stb/d and will extend the project area to the Twiga, Ekales, Agete, and Etom oilfields. The monthly exports are anticipated to jump to 1.5 million barrels.

The FDP shows that 600 trucks will be deployed daily in phase one and 155 rail wagons daily when the production is stepped up in phase two.

‘Apart from extension of the railway line, the Government or its railway agents will need to invest in sufficient rolling stock, railway line rehabilitation, and construct appropriate railway siding at KPRL (Kenya Petroleum Refineries Limited) to enable the operation,’ Gulf added.

The shift to a hybrid transport of trucks and trains is intended to minimize capital cost while maintaining production potential, helping Kenya to fast-track gains from the project.

Gulf fully bought the Block T6 (formerly 10BB) and Block T7 (previously 13T) from Tullow Kenya BV (the Kenyan subsidiary of British oil explorer) in a $120 million (Sh15.5 billion) deal that was closed in October this year.

The Kenyan oil company intends to start commercial production of the crude oil by December 2026. This plan got a major boost after the Ministry of Energy approved its FDP and sent it to Parliament for ratification.

The MGR currently terminates at Eldoret, and its extension to South Lokichar is seen as more viable than using trucks per day to ferry the crude oil from the wells to Eldoret, from where it is loaded onto the rail.

Failure to extend the rail to South Lokichar could see Gulf forced to deploy a fleet of 1,500 trucks to ferry the commodity when production progresses to 50,000 stb/d.

Gulf says that the government can opt to extend the Standard Gauge Railway (SGR) line from Naivasha to Lokichar, setting the stage for haulage of 561 barrels per wagon.

The SGR currently terminates at Naivasha, but it is set to be extended to Kisumu and the border town of Malaba.

The extension, which is meant to ease movement between Kenya and Uganda, is likely to be funded via a 15-year bond worth Sh390 billion.

There are many reasons for organisations to align and embed sustainability within their purpose. When organisations consider the economic, ethical, strategic and legal imperatives for this course of action, it transforms how sustainability is situated within the organisation.

Unfortunately, some organisations have been unable to take sustainability beyond a siloed activity or plan focused on a limited aspect of the organisation to something holistic and integrated into its purpose.

For example, some organisations limit their sustainability efforts to waste and pollution reduction or avoidance, which is a commendable initiative but falls short of the other significant imperatives that sustainability can offer the organisation, such as business growth.

RelatedWe also see organisations that have incorrectly restricted or defined sustainability to corporate social responsibility (CSR) activities alone. It is usually due to a misunderstanding of sustainability within the corporate context and an inability to extend its integration across the entire organisation. To move sustainability from the periphery to the centre, organisations should consider the following.

First, aligning and connecting the organisation’s purpose with sustainability.

In other words, how do the societal challenges organisations aim to solve align with the sustainability agenda? When well aligned, it enables the organisations to identify the material non-financial issues that will impact their future viability and prospects. Through this process, organisations can map out relevant, like-minded partners aligned with their purpose.

The next step is to develop the ‘what’ and ‘how’.

The ‘what’ helps the organisation define the impact of sustainability across its functions and requires an assessment of how sustainability would transform each function.

Organisations can solve the ‘how’ by incorporating sustainability into existing processes and structures. It will ensure that sustainability is not designed to operate on a parallel track within the organisation, but an integral part of existing frameworks and processes.

Finally, organisations should set the key performance indicators used to track performance against targets, including those that promote accountability.

When sustainability is central within an organisation, CSR efforts, for example, are better refined and integrated into the organisation’s broader operations in an enduring manner.

Organisations must ensure constant engagement with stakeholders throughout this journey, including through reporting that enhances transparency and builds trust.

Breakfast in Malindi. Dinner in Milan. This is how Daniel Kirui Njoroge would ideally live his life. He travels a lot, you see. This, travelling, is his love story. He loves Malindi so much so that he, in the past year, has learned how to swim. This is the promise of life as you like it-an unscrolling vista of pleasure and indulgence.

Like a dimension you could slip into, or be sucked into, by an undertow. Why Malindi? Until you are in it, you don’t know; but when you are in it, it’s all that you know. Though he travels a lot, he is actually not a dilettante, but a businessman. He is the Managing Director of Afropack Group, which offers engineered integrated processing and packaging solutions, all done in Italy. Italy, where he borrows his Mediterranean diet and gioia de vivre. Joy of living. With his ease of being, he seems to be able to wear life as a loose overcoat.

‘I do not overdo in eating or drinking,’ he says. That’s his secret to staying fit, and it could be yours too. Everything in moderation, including moderation.

What’s keeping you excited about this holiday season?

Actually, since I’m at the coast, the thing that is actually making me excited at the moment is the real estate here, because it’s a generational changeover. I’m finding it interesting because many at the coast, especially Malindi, have a lot of Italians, the older generations, who are now trying to sell their properties off to the newcomers. This change of generation is making me understand we have so much potential at the coast, and can bring it back home.

Have you always been a beach person?

I consider myself a beach person. I like the sunshine, I like the weather and the Indian Ocean.

Did you grow up around the beach back in the day?

I grew up in Nairobi with its coldness. Then I went to school in Murang’a and Nyeri . Back then, for me, the coast was only for the people who had money.

When you’re planning a holiday, are you trying to recreate your childhood memories or find new ones?

I try to find new ones. What I normally try to do is to visit new places, a new country or city, so that I can try to understand it better. This is the second time in four years that I’m actually going to spend my holidays in Kenya.

Everyone has their own version of holiday stress. What’s yours?

The phone calls. We always have to be connected. You always have to check your phone because during the year, you’re always on the phone and everything. So when you’re relaxed, maybe you receive only two phone calls, and you start asking yourself what’s wrong?

How then do you permit yourself to rest?

I’ll be honest with you, I have really struggled with that. And this is actually the first year that I’m going to do that because all the past years, I’ve always been pushing work during the Christmas holidays because we normally have deliveries of some equipment. But this is now my me-time, and I am intentional about keeping it that way.

What’s a family holiday ritual that you’ve carried into adulthood?

Goat-eating ceremony around Christmas time. I got that from my parents and uncles, and I tend to carry it along.

What sort of activities put you at ease during the festive season?

I love to swim, I love the water, so even sitting down in the swimming pool or maybe in the ocean, having the waves beat against your feet is therapeutic. I recommend it.

How long have you been swimming?

A year. I’m not a good swimmer, but I’ve decided to do these things, and next year I’m going to start playing golf. I’m trying to do these strange sports that push me past the normal boundaries.

If you could take only one swimmer’s ritual into the new year, what would it be?

When you wake up in the morning and you’re feeling a bit clammy, enter the water.

What do you want to leave behind in 2025?

The belief that I cannot make it. It’s something that has accompanied me during the whole year, and especially during the difficult times, that everything is going to work out.

What are you most proud of this year?

The connections and networks that I’ve made. That is one thing. Can I also say I’m actually proud of being featured by the Business Daily for the first time in my entire business career [chuckles]? And the third thing is the award that I received an awars– the CEO to Watch of the Year in the Top 100 Executive List Awards. Those are the three highlights of the year that I cherish.

What is one resolution you made yourself that you are proud of accomplishing or having kept?

The one thing that I told myself is that I have to risk it all. And I did that. I made the right choice. I went to Nigeria for two months; it was not easy.

Do you always travel alone?

Most of the time, yeah. But for this part, for the second part of the year, I travel with my family.

Do you get lonely?

No, I don’t. Funnily enough, I was in boarding school since I was a kid. So I’m very much used to that kind of life. It’s only you and you.

Do you still have a thirst for travelling?

I do. Because when you travel, your brain really opens up. That gets me quite excited.

How has travel changed over the years?

Travel has changed a lot. I was actually considering this when talking to my mum the other day. For her, she doesn’t understand why someone can take around 50-60 flights per year, which is one or two flights every month. It has become a common thing because flights are no longer that expensive, making it simpler to travel around. You can have breakfast in Malindi and dinner in Italy.

Do you ever worry about your carbon footprint?

Yes, I do.

But?

But, as I said, we are supposed to actually start small. Beginning with the simple things that we do in our homes. For example, since I come from packaging, I find it highly unusual for people to continue buying things in plastic bottles rather than converting to recyclable materials, which leaves a lesser impact on the community and the environment.

Are you keeping a diet over the holidays?

I try not to overdo eating or drinking. But I have a regular diet. Thankfully, I’m from the Italian school, which is a Mediterranean diet. So, that keeps me fit. For me, holidays don’t mean overindulging in food and drinks, but it’s actually a time to relax your body, your mind, and everything.

What are you looking forward to doing most this period?

I’m looking to spend more time with family.

Summarise your year with a song, a food, a bird, an animal.

It’s Chris Brown’s ‘Holy Blindfold.’ The idea is that when you are blindfolded and you close your eyes, you have to trust in instinct.

What has been this year’s most unexpected gift?

Kindness.

From yourself or strangers?

No, from people that I would never have expected. Kindness and recognition. I must say it’s like that.

How are you stepping into the new year?

I’m entering 2026 with a blast. I’ll be much more rested and energetic moving forward. Whatever I do this year, I’ll double it next year.

What have you finally stopped chasing in 2025?

I’m chasing everything at the moment. Let me be honest [chuckles]. I’m still young, so all the doors on my side are still open, and I know I can make it, so I’ll see it through.

Well, rather, what have you stopped trying to control?

What people think about me.

What success metric no longer defines you?

A major recognition internationally.

What have you forgiven yourself for this year?

Not being able to be there for some people who expected me to be there. I’ve come to learn that I can’t be everywhere at the same time.

What are you thanking yourself for?

I’m thanking myself for being a better version of myself than the person I was two to three years ago.

And how does that person look like now?

That person is funny enough, he’s still a kid who is learning and gets interested in the simple things in life.

Give us your top tip for 2026.

Across Kenya’s business and technology, there are creative and social founders scaling global firms, engineers turning ideas into billion-shilling value chains and community leaders redefining modern African leadership.

They are measured less by titles and more by the systems they are fixing, the jobs they are creating, and the futures they are building.

That reality was visible during this year’s Top 40 Under 40 Men awards, in which nearly 1,000 men were nominated, reflecting the growing depth of Kenya’s young leadership pipeline.

The peak demand for electricity hit a new high of 2,418.77 Megawatts (MW) in November-the fifth such feat this year alone, turning the spotlight on the country’s ability to meet the fast-rising demand or risk rationing of supplies.

KenGen Managing Director Peter Njenga disclosed that the peak was recorded last month, upstaging the previous high of 2,411.98MW recorded in October.

The fast-rising demand looks set to pile pressure on the country’s ability to generate sufficient power locally to match the rise in consumption amid a deepening reliance on hydropower from Ethiopia and Uganda to boost supplies.

Kenya Power is racing to ensure enough electricity supplies as industries and homes consume more amid a surge in the number of connections.

‘National power consumption reached record highs in November as peak demand climbed to 2,418.77MW and energy dispatch hit 44,555.80 Megawatt-hours, underscoring increased industrial activity,’ Mr Njenga said yesterday at the firm’s Annual General Meeting.

The peak demand has jumped by 102.77MW since the start of this year, from the 2,316MW recorded in February. Peak demand refers to the time of the day or night when electricity consumption is highest.

It mainly occurs when industries are operating at peak, and many people are using appliances and devices simultaneously.

The surge in electricity demand exerts pressure on the local production of electricity from geothermal and hydro, which has nearly stagnated, forcing Kenya Power to tap more imports from Ethiopia, Uganda, and Tanzania amid power rationing.

Kenya Power has been forced to ration some parts of the country from as early as 1700hours to avert a scenario where the grid can collapse due to a mismatch in demand and supply.

Geothermal and dams are the mainstay of the national grid, but production from these sources grew marginally in the year ended June 2025.

Hydropower generation from local sources grew three percent to 3,504Gigawatt-hours (GWh) in the period from 3,396GWh a year ago, while geothermal grew at less than one percent to 5,718GWh from 5,707GWh in the same period.

Electricity imports surged fastest to 1,534GWh from 1,199GWh, reflecting a rise of 28 percent in the same period.

In recent months, both the Kenya Power and Lighting Company Plc (KPLC) and President William Ruto have acknowledged that, without additional capacity, load shedding will be necessary to balance the system.

Parliament last month, however, voted to lift a ban on new power purchase agreements, raising hope of new generation projects.

‘The lifting of the moratorium marks a decisive reopening of Kenya’s power generation pipeline and reflects the government’s urgency to address supply deficits and growing demand. Its practical impact, however, will hinge on how quickly the new conditions, particularly the shift to competitive procurement, are implemented,’ Aleem Tharani and Edwin Baru, Partners, and Beatrice Ngunyi, Associate, at law firm Bowmans Kenya, said in a commentary.

Kenya Power buys hydropower from Ethiopia under a 25-year deal. The firm also has power exchange deals with Uganda and Tanzania, where the net importer pays at the end of a defined period.

Kenya inked a deal to import electricity from Ethiopia from November 2022, with the power priced at $0.065 (Sh10.2) per kilowatt, but Kenya is keen to exercise a clause in the contract that allows for tariff renegotiation from 2027 at the earliest.

Kenya has been the main importer in the two deals with Uganda and Tanzania, highlighting the country’s local generation woes.

Women cyclists choose to ride their bikes for various reasons-fitness, both mental and physical, hobby, networking, community building, or simply as an easy escape from life’s stresses.

However, for some, it is an act of defiance, a protest against societal restrictions that often try to dictate that women must never cycle.

These two women have not only dispelled this myth but have done so glamorously, earning medals and accolades at a level where few believed in them.

More importantly, they are winning the most significant medals of their lives-staying fit and restoring order and balance in their lives.

Julia Alice lets her bike lean gently against a wall, takes off her helmet as she settles down after her around-the-estate ride.

There’s an ease to how she handles it, like an appendage or a part of her she can detach easily but can’t truly live without.

At 37, the mother of two is among a small but growing number of Kenyan women cyclists pushing boundaries in a sport that is still largely male-dominated, underfunded, and misunderstood.

Alice’s journey began miles away from the well-paved roads of Kahawa West, where we meet her and her daily training circuit. She was born in Nyandarua, the fifth of several children, and lost her father when she was still in primary school.

Her mother fell ill soon after, leaving her and her siblings to navigate childhood amid economic struggle.

‘When my mother got sick, I was still in school. No one was around to care for her, so my sisters took her in, and I had to leave home to live with one of them.’

That move took her to Samburu, a place that would quietly spark a lifelong love for cycling.

In Samburu, bicycles were as they are now, not toys. They are essential lifelines. She watched schoolboys glide past on their bikes as dust rose behind them.

‘I wasn’t good at it at first. Back in our village in Nyandarua, there weren’t many bicycles. But when I saw how the kids in Samburu used them, I wanted to learn.’

Her elder brother taught her to balance and pedal. She believes the lessons on those uneven, dusty roads made her the cyclist she is today.

Soon she was riding 6km to school every day, barefoot, using her sister’s child’s bike. ‘It wasn’t much about racing; it was survival, mobility, and curiosity.’

Even then, she was the girl who joined every game, every sport and every race.

Adult-hood slowed down that pace. She completed high school in 2010, joined KCA University for CPA classes, then got married and had her first child.

‘By the time my daughter was two years old, I had stopped studying,’ she says. ‘I started focusing on my family.’

Like many young Kenyan mothers, her dreams had to negotiate with household realities.

Then in 2019, she saw a friend post a sleek modern racing bike. Light, fast and nothing like the heavy ‘Black Mamba’ bikes she grew up seeing. Her curiosity came alive again.

‘He told me the team was looking for riders and added me to their WhatsApp group,’ she remembers. ‘That’s how I found RDX Cycling Club.’

Entry into the sport wasn’t cheap. She bought a 19kg bike for Sh30,000 – a mobile app loan she took, a risk, and a quiet gamble.

‘But I told myself, God has a plan. You start small then purpose to grow.’ She trained daily and saw he weight drop from 78kg to 58kg.

Her commitment impressed fellow cyclists so much that within 11 days, they helped her buy a professional bike worth over Sh80,000.

That same year she entered the Tour du Burundi. Her first international race.

A gruelling five-day stage event. She finished in the top ten – a remarkable debut by any standards.

When the races slowed down during the pandemic, Alice did not. She trained whenever she could.

‘There were many group rides. I’d leave my kids with their father or my sister, join the group on weekends, and ride to places like Machakos or Mai Mahiu.’

Those were chaotic years, she admits, balancing family love and personal ambition and passion especially, but they brought structure and confidence.

Since then, Julia has compiled a résumé most Kenyan cyclists – male or female – would envy: Kenya Cycling Federation races in Nairobi, Naivasha, Machakos, the African Championships in Egypt where she won three silver medals in paracycling, the Safari Classic Ride, Ride Karura Challenge, Tour de Machakos, and the Jubilee Live Free Ride in 2025, where she placed in both able-bodied and paracycling categories.

Her two children now cycle competitively. ‘I want them to start early,’ she says.

‘When you begin young, you learn to understand the bike like a friend.’ Their father supports their routine. At home, cycling is part sport, part family language.

Kenyan endurance sports have always been tough for women – the cost, the safety concerns, the time demands. ‘You can have the talent,’ Julia says, ‘but if you don’t have support, you can’t go far.’

Her journey to becoming a professional cyclist has seen her navigate motherhood, financial pressure, loss, and ambition.

‘You can’t think only about medals. You think about what you are leaving behind. The example you’re setting.’

For three weeks every month, Valentine Onchari, 32, kits up, saddles her bicycle and heads out to work-she pushes into traffic for a 25-kilometre ride to the office. She does the same in the evening. 50km a day. Five days a week.

‘It sounds crazy, but cycling is the one thing that gives me order in a very busy life,’ says the project consultant at Japan International Cooperation Agency.

Her love for cycling also began in high school. At Aga Khan High School in Mombasa, she took up swimming and cycling almost simultaneously.

‘I was that sporty child. If you needed someone for a race, a swim or a ride, I was there. And I was lucky because my family and the school supported every bit of it.’

She entered her first triathlon as a teenager. She still remembers with great fondness her first cycling outreach, ‘I must have been around 15 or 16. The details are blurry, but I remember the feeling-just wanting to finish, wanting to prove to myself that I could do it.’

Adulthood rearranged things. She stopped swimming first, then gradually cycled less and less.

‘Life happened. School, work, marriage, children-you know how it goes.’ Nearly a decade passed without structured riding.

In early 2024, something tugged her back. ‘It wasn’t planned,’ she adds. ‘Something in me just said: go back. So, I listened.’

The return was anything but glamorous. ‘My old bike was basically dead. I had no gear. Nothing. And cycling is not a cheap sport.’

She bought what she calls ‘a proper bike’ and slowly rebuilt her kit. ‘Just the bike alone is a big cost. Then there’s the helmet, lights, bike computer, shoes, kits-before you know it, you’re deep into your savings.’

Her body wasn’t ready either. Years away from the road demanded repayment.

Valentine had full-time work, graduate school, a marriage and two children – no time for long training rides.

So, she built cycling into her commute. ‘Cycling forces you to plan your day. You can’t wake up late. You can’t procrastinate. With it, my time management got better.’

Her family adjusted to her new routine. ‘If it’s a weekend race or long ride, they know Mum is out there. And they support me. That is everything.’

Like Julia, she faces the unique dangers of being a woman on Nairobi’s roads.

‘I wish I could say the danger is only about traffic, but being a woman on a bike-that’s a different story. You get comments, stares, people thinking you don’t belong on the road.’

She has turned back home on days when her instincts warned her. ‘Safety comes first.’

Months into her return, she joined a team-the Gravel Riders Club-and entered a race – just to finish, she told herself. She finished fourth.

‘Some people have been training consistently for years. I had been back for one year. So yeah, it meant a lot.’

In 2025, she joined a six-member team for the Jubilee Live Free Grand Nairobi Race.

‘Team races are different. You start together. You work together. You draft, you pace, you adjust as a group.’ They won the team category. ‘It was beautiful. Truly. I felt proud of us.’

Cycling has changed her body, her mind, her lifestyle. ‘Physically, I’m the strongest I’ve ever been. Mentally, it clears my head. It’s free therapy.’

She watches what she eats. Hydrates better. Sleeps intentionally. ‘My body tells me what works and what doesn’t.’

Her message to women – especially mothers juggling many roles?

‘Start where you are. Don’t wait for the perfect moment or perfect bike. And don’t feel guilty. Women are taught to apologise for taking time for themselves. Don’t. Cycling makes me a better mother, a better worker, a better person. You deserve something that fills you.’

The Supreme Court has overturned a decision that allowed the Kenya Revenue Authority (KRA) to tax e-commerce card payments, saying the taxman exceeded legal authority by subjecting credit/debit card transactions to withholding tax.

This unanimous decision ends a 13-year legal battle and shields banks from billions of shillings in tax exposure, effectively forcing KRA to rethink how it approaches taxation in a rapidly digitising payments ecosystem.

In a precedent-setting verdict, the apex court set aside the Court of Appeal’s 2020 finding that ABSA Bank Kenya’s payments to global card companies-Visa, Mastercard, and American Express-amounted to royalties, and that interchange fees paid to local issuing banks qualified as management or professional fees.

Both classifications had attracted withholding tax demands since 2011.

Chief Justice Martha Koome-led bench affirmed KRA violated constitutional Article 210’s requirement that taxes must be imposed strictly under legislation.

“A tax cannot be imposed in a vacuum. Taxpayers deserve specific clarity on their obligations,” the court emphasised, criticising KRA’s reliance on conjecture rather than statutory definitions.

Article 210(1) of the Constitution provides that ‘no tax or licensing fee may be imposed, waived or varied except as provided by legislation’.

The dispute originated from KRA’s 2011 audit of ABSA (then Barclays Bank Kenya), demanding withholding tax on two streams: network fees paid to the global card firms and interchange fees shared with issuing banks.

While the High Court quashed these assessments in May 2015, the appellate court reinstated them through the November 2020 verdict, prompting ABSA’s Supreme Court appeal, which was certified as constitutionally significant.

Central to the case was whether card transactions fit the Income Tax Act’s definitions of “royalty” or “management/professional fees.”

The court rejected KRA’s expansive interpretation, insisting legal definitions should not be stretched to fit modern payment systems.

“The taxing authority cannot exercise powers based on generalized opinion,” the judges ruled, noting explicit contracts showed Mastercard and American Express did not charge royalties, while Visa’s agreement was silent.

“Justice is not served by disregarding clear contractual terms,” they added.

Since the gist of the dispute was whether card payment processes fall within the definitions of ‘royalty’ or ‘management and professional fees’ under Sections 2 and 35 of the Income Tax Act, the Supreme Court said the definitions must be applied as written, without stretching them to fit modern commercial arrangements.

On interchange fees-small percentages retained by issuing banks per successful transaction-the court dismissed KRA’s characterisation as payment for services.

Instead, it ruled these constitute revenue components within merchant service fees, not compensation for managerial/technical services.

“This composite financial process cannot be forced into tax categories Parliament never envisioned,” the judgment stated, underscoring legislative intent’s primacy in tax matters.

The verdict shields banks from billions in potential liabilities while compelling KRA to recalibrate its approach to digital payment taxation.

Banking sector players had warned that KRA’s interpretation would have increased transaction costs, ultimately passed to consumers.

Kenya Bankers Association, which participated in the court case as an interested party, argued that sustaining the tax would have disincentivised cashless payments-counter to Kenya’s financial inclusion goals.

The Association held that KRA’s approach to card-related payments threatened Kenya’s cash-lite ambitions.

Industries heavily reliant on card payments-including tourism, retail, hospitality, and transport-stood to bear the brunt of such cost increases.

The Supreme Court appeared alive to those concerns, noting the importance of certainty and predictability in taxation, especially in sectors that support the national digital payments agenda.

“Certainty of law remains fundamental to rule of law, including tax law,” the court observed, signaling judicial reluctance to uphold creative tax interpretations lacking legislative grounding.

The court ordered parties to bear their own costs, closing a marathon litigation that began when Kenya’s digital payments ecosystem was nascent.

Today, with mobile money processing billions daily and card transactions rebounding post-covid19 pandemic, the verdict provides much-needed clarity for financial sector players.

“We are of the opinion that this litigation is not one suitable for visiting any of the parties with costs, given the fact that, each of them has participated in a protracted dispute that has resulted in a final clarification of the law, which should go a long way in serving the Country’s revenue collection, financial and banking system, and the tax paying public,” said the judges.

Treasury Cabinet Secretary John Mbadi says the government is reviewing its shareholding in several State-owned enterprises but has yet to decide whether to follow the National Social Security Fund (NSSF) in offloading its stake in East African Portland Cement (EAPC).

Mr Mbadi said the Treasury is assessing its investments in commercial State corporations to determine which ones are ‘mature enough’ for privatisation.

However, he said no conclusion has been reached on Portland Cement.

‘No, we haven’t,’ he told the Business Daily on Friday when asked whether the Treasury intends to sell its stake in EAPC.

‘We are reviewing all our stakes in the state-owned enterprises that we feel are mature for offloading. If Portland is mature enough to warrant that, then we will, but I cannot comment on that yet.’

NSSF and Treasury own 27 percent and 25.3 percent of Portland Cement, respectively. EAPC’s biggest shareholder, Kalahari Cement, is buying the pension fund’s stake in the company for Sh1.6 billion.

The purchase will give Kalahari’s owner, the Tanzanian tycoon Edhah Munif, effective control of EAPC, with an eventual stake of 68.7 percent.

Mr Munif currently holds a 41.7 percent stake in EAPC through Kalahari Cement (29.2 percent) and his wholly owned Bamburi Cement (12.5 percent).

Already, President William Ruto has passed the Government Owned Enterprises (GOE) Act, which guides the privatisation of State corporations, including the Kenya Pipeline Company (KPC).

Under the plan, the State seeks to encourage private investment and lessen the fiscal pressure from loss-making and non-performing government entities. It is targeting billions of shillings to reduce reliance on debt and address budget deficits.

‘We are reviewing a number of them, including KenGen,’ Mr Mbadi said, referencing the electricity generator, whose 70 percent stake the government owns.

‘Leave alone for revenue raising; we feel we want to reduce our stake in commercially viable enterprises because of the advantages that come with privatisation, like improved efficiency and better governance structure.’

So far, Mr Mbadi’s ministry has signed a deal to offload a 15 percent stake in Safaricom to South Africa’s Vodacom Group for Sh204.3 billion or Sh34 per share.

The sale is expected to be completed in the first quarter of 2026 and will see the government’s stake in the telco drop from the current 35 percent to 20 percent.

Treasury is leveraging future dividend entitlement on the residual stake to get more cash in the transaction.

The exchequer sold the right to receive future dividends of Sh55.7 billion to Vodacom at a price of Sh40.2 billion, thus surrendering Sh15.5 billion in future dividends from Safaricom.

Concurrently, Vodacom is also buying a five percent stake in Safaricom that is held by its parent firm, UK-based Vodafone Group, at the same price of Sh34 per share.

Once the two transactions are concluded, Vodacom will raise its ownership in the telco to 55 percent, giving it control after spending a total of Sh272.4 billion on the share purchases.

Mbadi has said the proceeds of the share sale will provide the seed capital for the proposed Infrastructure and Sovereign Wealth Funds, which will support projects in energy, roads, water and irrigation, and airports.

This includes the construction of 50 dams and an upgrade of the Jomo Kenyatta International Airport (JKIA) in Nairobi after the government last year cancelled a deal with India’s Adani Group over its founder’s indictment in the United States.

MPs have also approved KPC’s privatisation, which will see the government retain not less than 35 percent shares while releasing not more than 65 percent of its ownership.

Treasury expects to raise approximately Sh100 billion from the initial public offering at the Nairobi Securities Exchange (NSE). The listing’s deadline is March 31, 2026.

Kenyan banks are accelerating their investment in artificial intelligence (AI) and machine learning, with deployment now concentrated in credit decisioning, fraud detection, cybersecurity, and customer-service automation.

These functions are becoming the first testing ground for AI as lenders pursue faster processing, tighter risk controls, and leaner operations.

One in two financial institutions, including commercial banks, microfinance lenders, and digital credit providers, have already integrated AI tools into at least one business process, according to a March 2025 survey by the Central Bank of Kenya (CBK).

Credit modelling has become the main use case for AI across major lenders so far, as banks strive to increase speed while maintaining prudent risk controls.

‘We have, over the years, adopted AI. it is currently deployed in some critical business areas driving credit decisioning,’ Dennis Volemi, the Group Director of Technology for KCB, told the Business Daily.

KCB is Kenya’s largest lender by assets. As per the CBK survey, credit has been the leading AI application across the sector, with banks using models to analyse payment histories, assess micro-borrower patterns, and automate routine lending decisions like determining whether to approve loan applications and on what terms.

At Absa, Chief Data Officer for Africa Hartnell Ndungi said AI supports credit analytics, customer lifecycle modelling, and risk monitoring, enabling more granular scoring and early detection of distressed accounts.

AI has also become a key tool in protecting banks from increasingly complex fraud schemes and cyber threats.

KCB says its fraud-monitoring systems already rely on AI to flag suspicious activity in real time, while Absa uses machine-learning models in risk-monitoring workflows.

Machine learning (ML) is a subfield of AI that uses algorithms to enable computers to learn from data, identify patterns, and make predictions or decisions with minimal human intervention.

CBK’s report shows that banks are using anomaly-detection models to identify unusual network activity, automate threat triage, and speed up incident response.

‘The top three applications of AI and ML by institutions that had adopted AI were credit risk assessment at 65 percent, cybersecurity at 54 percent, and customer service at 43 percent.

This was followed by e-KYC at 41 percent and fraud risk management at 40 percent,’ CBK said.

At the same time, conversational artificial intelligence, a type of AI that allows computers to understand and engage in human-like conversations using natural language, seems to be among the most mature AI applications in Kenyan banking.

This includes technologies such as chatbots or virtual agents that users can talk to.

Banks are also deploying chatbots and voice-enabled interfaces to ease pressure on call centres and to serve the rising volume of digital customers.

Absa’s bank-wide conversational AI system ‘Abby’ enables customers to perform tasks such as checking balances and transferring funds through WhatsApp.

Equity Bank has a similar chatbot called ‘Eva’, available on WhatsApp, Facebook Messenger, and Telegram.

‘We have deployed systems that allow natural-language querying of data, retrieval of information from policy and operational documents, and voice-enabled interfaces that support hands-free interaction and voice of customer analytics,’ Absa’s Mr Ndungi said.

Another growing frontier for Kenyan lenders is the application of AI to document processing and data structuring.

Absa said its in-house platform, the Citrus AI Suite, includes systems for document intelligence, voice transcription and classification, enabling the bank to extract insights from previously unstructured data such as customer conversations, scanned documents and emails.

These capabilities support credit, risk, and service functions that traditionally relied on manual review.

These widely adopted use cases in Kenya mirror global banking trends, with credit risk assessment, cybersecurity threat monitoring, and customer engagement tools leading uptake.

Yet despite growing momentum, banks cite industry-wide constraints like skills shortages and high implementation costs as the top challenges that continue to limit full-scale adoption.

‘There is high talent scarcity, making highly skilled AI and machine learning operations professionals difficult to recruit and retain,’ said Mr Ndungi.

Legacy systems remain another bottleneck, as integrating advanced models into older core-banking platforms adds cost and complexity and often slows the move from pilot to production.

Per the CBK survey, for instance, 44 percent of AI adopters admit they cannot adequately explain how their models work, compounded by the fact that many institutions rely on third-party vendors.

To address these gaps, banks say they are investing in workforce capability. KCB said it is rolling out group-wide AI literacy programmes, while Absa is embedding AI into staff-facing tools to democratise analytics and operational insights.

Industry players say the business case for AI is strengthening; faster credit decisions, lower fraud losses, more accurate risk insights, and leaner operations, and that the next frontier will be overcoming skills gaps and compliance challenges to scale the systems responsibly.

‘Early deployments are showing measurable impact across selected business areas,’ said Mr Ndungi.

Commercial banks have urged a further cut in the indicative lending rate of the Central Bank of Kenya (CBK), to help boost the pace of lending to the private sector and reduce loan defaults.

Through the Kenya Bankers Association (KBA), the lenders want the CBK Monetary Policy Committee (MPC) meeting set for Monday to cut the Central Bank Rate (CBR) from the current 9.25 percent.

The MPC has cut the CBR in eight successive meetings, with the latest chop coming on October 7, when the rate was lowered to 9.25 percent from 9.50 percent.

KBA says there is scope for a further cut in the benchmark rate to boost private sector lending and further stimulate economic growth in an environment where inflation has remained within the targeted range of between 2.5 percent and 7.5 percent, and the foreign exchange rate is largely stable.

‘We view that there is scope for a further cut in the CBR to bolster private sector credit growth and stimulate economic growth. This move is expected to augment previous cuts in the CBR, signal reductions in funding costs for banks, and encourage further lending rate reductions for enhanced credit growth,’ said KBA in a pre-MPC research note.

Kenya’s headline inflation was 4.5 percent in November compared with 4.6 percent in October, while the shilling has remained largely stable, exchanging at under 130 to the dollar.

The CBR had hit a 12-year high of 13 percent in February last year, where it lasted up to August of the same year, before CBK started cutting it as inflation eased and the Kenyan shilling stabilised against the dollar.

KBA hopes a further cut in CBR would make loans more affordable and attract more private sector borrowers.

The pace of private sector credit stood at 5.5 percent in September, compared to 3.3 percent in August and negative 2.9 percent in January 2025.

KBA’s push comes at a time when the banking industry is transitioning from the risk-based loan pricing model to the Kenya Shilling Overnight Interbank Average (Kesonia)-a benchmark rate that reflects the average interest rate at which banks lend and borrow unsecured overnight funds in local currency.

The new model uses the interbank rate as the common reference rate for determining lending rates to all customers.

Banks are allowed to load a premium (K) on the reference rate, now referred to Kesonia.

The total lending rate is now calculated as Kesonia + Premium (‘K’), where the premium reflects the borrower’s risk profile, bank costs, and shareholder returns.

CBK Governor Kamau Thugge said in September the switch to Kesonia means banks must end ‘excuses’ and cut rates even as lenders decry a sustained higher non-performing loans (NPLs) ratio.

According to KBA, the monetary policy transmission has been strengthened with Kesonia becoming more stable and aligned with the CBR.

However, banks still have concerns around asset quality, despite the NPL ratio easing to 17.1 percent in September from 17.6 percent in June 2025.

‘Concerns of elevated non-performing loans in the market continue to discourage stronger lending as banks remain cautious in lending to avert increasing loan loss provisions,’ said KBA.