Category: Business Daily

Directline Assurance Company has been penalised Sh85 million for abusing buyer power by delaying payments to two garages it had contracted to repair damaged vehicles.

The Competition Authority of Kenya (CAK) imposed the fine on the insurer after finding it guilty of two violations of the Competition Act, each attracting a penalty of Sh42.5 million.

According to the ruling delivered by the competition watchdog on Wednesday, the insurer abused its buyer power and exercised a skewed bargaining position that favoured its interests over the welfare of its suppliers.

The decision followed a complaint filed by two garages contracted to repair damaged vehicles for Directline’s customers. The garages said the insurer had refused to pay their pending bills despite repeated attempts to have the amounts settled for services already delivered.

CAK Director-General David Kemei said the penalisation, which matches the gravity of the violations established, should remind ‘businesses that abuse their influential positions to disenfranchise their suppliers.’

‘The penalties levied are commensurate with the gravity of the offence, as well as the conduct of the accused party during the investigation. Supply contracts between parties to a commercial relationship should be equitable and the product of candid engagements,’ said Mr Kemei.

‘Abuse of buyer power, which cripples suppliers, defeats the country’s aspiration of promoting inclusive economic development. SMEs are liquidity-constrained enterprises.

Therefore, failure to honour payments for work done can destroy a business and render thousands jobless.’

The complaining companies Kilele Motors Limited and Midland Autocare Limited alleged that Directline owed them Sh5 million and Sh7.6 million respectively, which the insurer delayed payments without justifiable cause and in breach of their agreement.

Directline told the regulator that its delays had resulted from temporary inaccessibility of its bank accounts after the courts froze them last year amid a shareholder dispute.

However, after sustained pressure from the regulator, the insurer paid only Sh2.9 million to Midland and Sh3.7 million to Kilele, leaving an outstanding balance of Sh6 million. Despite repeated reminders, the insurer failed to update the authority on any challenges it was facing, ignoring a cumulative 19 formal reminders from the regulator.

‘Based on the foregoing, and in line with the authority’s mandate of sanctioning abuse of buyer power in the economy, the insurance firm has been penalised Sh42.5 million for each count and ordered to honour the outstanding invoices,’ said the regulator.

The authority has also ordered Directline to amend its supply contracts to include provisions for interest payments on late invoices and to desist from practices that violate the Competition Act.

This is not the first time the competition watchdog has intervened in the motor insurance industry to facilitate payment of garages and vehicle assessors.

In 2022, it compelled 18 major insurers to pay 20 vehicle repairers and assessors Sh38 million owed for services rendered, although it did not impose sanctions on the companies at the time.

The State is planning to offload a 15 percent stake in Safaricom to South Africa’s Vodacom Group in a deal that will raise Sh244.5 billion for the exchequer to ease dependence on debt to fund its budget deficit, the Business Daily has learnt.

The amount comprises Sh204.3 billion for the six billion shares to be sold at a price of Sh34 each and an advance dividend of Sh40.2 billion.

The Sh204.3 billion is substantially higher than the Sh169.4 billion that the staThe advance dividend to the National Treasury amounts to a hefty payout of Sh6.69 per share. Safaricom is expected to declare an interim dividend early next year as it continues with cash distributions to shareholders.

Sources familiar with the plan said that the sale of Safaricom shares is part of a wider plan by the government to dilute its shareholding in several enterprises to raise funds for short-term budget support.

Last month, Vodacom Group informed its shareholders that it would bid for extra Safaricom shares once the government resolved to dispose of a stake, with its group Chief Executive Officer, Shameel Joosub, saying that he expected the Kenyan government to reach out with an offer.

‘In terms of increasing stakes, you know, we look at it in any market where our partners want to sell, we would consider it, and of course, we’d expect that they would talk to us, you know, as we’ve been partners for a very long time,’ Mr Joosub said on November 10.

He made the remarks when he was asked if Vodacom was intent on raising its ownership in Safaricom.

The South African company, together with its parent Vodafone Group of the UK, holds a 40 percent stake in Safaricom, which is valued at Sh451.9 billion at the telco’s closing share price of Sh28.20 as of Wednesday.

The government’s current 35 percent holding is valued at Sh395.4 billion. After the sale deal with Vodacom, the government would retain a 20 percent interest valued at Sh226 billion at the current price.

The amount set to be raised from the latest sale of Safaricom shares will surpass the Treasury’s targeted amount of Sh150 billion from the privatisation of public enterprises in the current fiscal year.

Other shareholders in the telco hold a 25 percent stake equivalent to 10 billion shares, which was offloaded by the Treasury in a March 2008 initial public offer that raised Sh51.75 billion after being oversubscribed by 532 percent.

The Treasury is also planning to offload a 65 percent stake in Kenya Pipeline Company (KPC) through an IPO by March 2026 to raise about Sh100 billion. This government decision to dilute its holdings in various enterprises follows the recent signing into law of the Privatisation Act, 2025, that came into effect on October 21, 2025.

Section 74 of the Act provides that the national government may sell or dispose of part or all its shares in a government-linked corporation with the approval of the Cabinet after a recommendation from the National Treasury.

Such a sale would, however, require ratification by the National Assembly. In the case of KPC, the Assembly gave its nod for the sale of the 65 percent stake on October 1.

The share sales in firms like Safaricom and KPC, if successful, would ease the Treasury’s headache of funding a Sh901 billion budget deficit for the 2025/2026 fiscal year, which is set to be financed through domestic borrowing of Sh613.5 billion and external borrowing of Sh287.4 billion.

The deficit is likely to be revised upwards in the next supplementary budgets due to lagging ordinary revenue collection that was Sh90 billion below the target of Sh663.5 billion in the first three months of the fiscal year (July to September).

The disposal of a significant stake in Safaricom would ordinarily see a scramble for the shares by investors, given the company’s record of profitability and steady dividend payment over the years.

However, analysts have said that the government’s deal with Vodacom is likely to be a negotiated transaction that will be implemented off-market. The purchase price of Sh34 per share is, however, a signal that the telco is still trading at a significant discount despite its major stock price gain over the past 12 months to close at Sh28.2.

The stock previously hit record highs of Sh44.6 in 2021 after Safaricom won its licence to enter Ethiopia.

Safaricom remains the region’s most profitable firm, riding on the back of data and M-Pesa, which has seen the operator consistently pay dividends.

The company reported a 52.1 percent rise in its net profit to Sh42.7 billion for the half year to September 2025, helped by a smaller loss in Ethiopia and M-Pesa’s double-digit growth.

Safaricom launched in Ethiopia in 2022 as the government opened up the tightly controlled economy to foreign competition and is hoping its presence in Africa’s second-most populous country will power future growth.

Its net profit grew from Sh28.1 billion the previous year, and it expects to declare an interim dividend in February 2026. The firm paid a dividend of Sh1.20 per share in the full year ended March 2025, representing a windfall of Sh19.2 billion and Sh16.8 billion for Vodacom and the exchequer, respectively.

Since Safaricom’s listing in 2008, the Treasury has drawn about Sh550 billion in dividends from the company, making it one of the most lucrative sources of investment income for the public purse.

The company has also paid the government a cumulative Sh1.57 trillion in duties, taxes, and fees since its inception, with the latest being a Sh90.51 billion remittance in the half year to September 2025.

Safaricom, Kenya’s leading mobile carrier with close to two-thirds of the country’s subscribers, is valued at Sh1.13 trillion on the Nairobi Securities Exchange.

Kenya Power paid out Sh1.42 billion ($11million) to a US energy firm, Ormat Technology, in October as part of overdue obligations for electricity purchases from the latter’s geothermal plants in Olkaria, Naivasha.

The payout reduced the balance of Sh4.69billion ($36.3million) that Kenya Power owed to Ormat as of September 30, 2025, new disclosures showed, adding to the Sh1.96billion($15.2 million) it had earlier paid in April and May.

‘The company has historically been able to collect on substantially all of its receivable balances.

As of September 30, 2025, the amount overdue from Kenya Power was $36.3 million, of which $11.0 million was paid in October of 2025,’ Ormat revealed in a regulatory filing.

‘The company believes it will be able to collect all past due amounts from Kenya Power. This belief is supported by the fact that, in addition to KPLC’s obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of Kenya Power non-payment (such as non-payments that are caused by government actions and/or political events’ it added.

The US firm operates within the Naivasha-based Olkaria III complex through its wholly-owned subsidiary, OrPower 4, Inc., where it has an output capacity of 150 megawatts(MW)of geothermal power.

The company sells the electricity produced by its power plants in Olkaria to KPLC under a 20-year power purchase agreement that ends between 2033 and 2036.

Besides Kenya, Ormat has international operations in Turkey, Guadeloupe, Guatemala, Honduras, and Indonesia.

The payouts to Ormat come in the wake of improved fortunes of Kenya Power, which posted a profit after tax of Sh24.47billion for the financial year 2024/25, driven by lower costs of sales, higher electricity unit sales, and system efficiencies.

The company’s profitability was buoyed by an increase in electricity sales, which rose by 887 gigawatt-hours(GWh), to 11,403 GWh, an 8percent increase in sales, while total unit purchases grew by 787 GWh.

Kenya Power’s revenues, however, took the biggest hit from industries with sales from this consumer class dropping by 9.5 percent in the year ended June 2025, as reduced electricity tariffs across the board took a toll on the firm.

Company disclosures show that revenues from industries fell to Sh106.49 billion in the review period from Sh117.69 billion a year earlier, while those from homes dropped 1.3 percent to Sh68.19 billion. Among the categories of power users, only street lighting and electric mobility recorded growth in revenues.

Kenya Power’s total sales dropped five percent to Sh219.28 billion in the review period, when its net profit dipped 18.66 percent to Sh24.47 billion.

The revenue fall came in a year when base electricity tariffs fell by up to Sh1.40 per kilowatt-hour (kWh) in the third year of cuts that started in July 2023.

The reduced price per unit of electricity negated the growth in the number of units that Kenya Power sold, with sales rising to 11,403 GWh in the year to June 2025 from 10,516 GWh a year earlier.

The drop in revenues is the first for Kenya Power in at least a decade, highlighting the impact of the lower tariffs that were meant to ease pressure on consumers.

‘It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change,’ said Charles Darwin, who first studied theology at Cambridge.

How did a female Kenyan, 30 something year-old entrepreneur see possibility in an unremarkable space, creating a nifty small business success in green Tigoni? How do corporate Goliaths use a ‘something from something’ tactic?

Is it possible to apply a ‘something from nothing’ approach to gain an elusive competitive advantage? Are we looking in the wrong places to identify the illusive secret sauce? 50 shades of green

Less than an hour’s drive outside frantic Nairobi, sits the serene rolling tea fields of slighter cooler Tigoni. In 1903 the first tea seedlings were part of an experimental planting. In 1910, the first commercial tea farm, Kiambethu, in Tigoni took root, with commercial cultivation of tea beginning on a larger scale in Kenya in 1924.

Today the tea value chain contributes two percent to Kenya’s overall gross domestic product (GDP), roughly 40 percent of agricultural GDP, employing 6.5 million people directly and indirectly.

‘It’s not what you look at that matters, it’s what you see,’ advised Henry David Thoreau. In a space behind Tigoni’s only active petrol station, where once a struggling local restaurant, and then a fruit and vegetable shop did not survive, sits a case study in creativity.

Nifty smart thinking

In an example of imaginative ‘out of the box’ thinking, a few small rooms in a nondescript building, that no one really noticed, almost magically became Nifty Café and Wine Bar in October 2021. By opening up the back wall, and buildin’Know exactly what you stand for is important, know what experience you want your customer to walk away with. Consistency is key, in quality, in service. Small businesses don’t get the luxury of off seasons, we need to insist on great standards and that’s what will help us grow. You need to keep learning, keep listening and keep adjusting. The market changes, people change and you must be willing to evolve,’ advises Nifty owner, Kenya born and raised Sakina Seif.

Something from something

Unlike petite Nifty, a rich well endowed balance sheet company, can play to its strengths, just overwhelming small competitors. This is a playing chicken, ‘don’t mess with me’ approach. But is there a way that the tiny almost unnoticed competitor can get a jump on the market leader?

If a corporate giant has an endowment of valuable resources, the approach is to exploit those resources to overwhelm, outspend any competitor.

This would be the method of a dominant rival; use their significant supremacy in, for instance, liquidity, market share, technology, or know-how just to overpower the competition.

‘If you are relatively better endowed, your imperative is to invest in expensive advantages that your competitors can’t match. For example, when upstart Reebok challenged Nike in athletic shoe sales, Nike invented a new scale-sensitive cost category – athlete endorsement (e.g. Air Jordon, Dream Team), and cranked up the investments in this category to heights never even contemplated before until Reebok said ‘no mas.’ The rest is history: Reebok flatlined and Nike solidified its dominance. The general rule, then, is when you have a resource advantage over competition, look to invest in the most expensive sources of competitive advantage,’ explains Roger Martin.

But by definition, most companies, NGOs and development partners are trying to get by with the little [often dwindling] resources they have. How can they possibly compete?

Something from nothing

Something from zero sounds crazy, bordering on impossible, but there may be something one is failing to notice. Nifty’s success is a prime example.

If you are feeling lost and broke, at a ‘major resource disadvantage’ the focus has to be on looking out for sources of advantage that are cheap and doable for you, but tricky for the overconfident competition to follow.

Stress is on noticing what others may have missed. Turning what you have taken for granted as a cool spring in the desert, quenching a thirst for a competitive advantage.

‘If you lag your competitors dramatically in resources, don’t cry yourself to sleep at night and give up. You have a tough and tricky strategy task – but not an impossible one. Your central task is to think through how you can gain an advantage on the cheap. Start by refusing to focus on and obsess about how and on what your competitors are spending their massive resources. Instead ask, despite all that spending, what are customers missing? By the way, that means customers of all sorts because many modern markets are two sided. Then spend all your strategic thinking energy on finding inexpensive ways to achieve uniqueness in meeting those unmet customer needs,’ advises Martin.

Look under your nose and create

Search along two pathways. The first is assets under your nose that you aren’t utilsing. The second is cheap but valuable abilities that you can create – like competing on time, responding to people just about right away, or being more tech savvy, or conscientious, paying attention to detail.

Or, focusing on being creative, imaginative, innovative – not following the path of stale worn out thinking. Focus on a genuine attribute – insight, not fluff.

Whatever you do, don’t compete on hype. That space is over subscribed. Not surprising to see companies simply copying each other, so that the more they compete, the more they look the same. Remember purchasers buy feelings and emotions. We buy based on how we want to feel. What kind of car do you own? What kind of purse do you carry? Why do people pay ten times the price for an Apple iPhone versus a cheap Android clone? You might not know even why you buy? Research by the Nielsen shows that roughly 90 percent of purchasing decisions are made almost subconsciously.

Other inexpensive, almost no cost resource one has is mindset. In particular, the ability to manage the ever increasing pace of change. An ability to see new realities and quickly adapt. Today, on all sorts of dimensions change becomes ‘everything, everywhere, all at once’.

When KFC’s announcement in 2021 caused a social media storm with its revelation that it was importing frozen cut potatoes from Egypt, Humphrey Mburu saw an opportunity to take his enterprise into the next phase of growth.

At the time, Mr Mburu was already supplying fresh potatoes to Nairobi eateries through his company, Sereni Fries Ltd. He knew the demand for convenience-ready fries existed, but the KFC saga exposed something bigger.

‘That moment confirmed what we had always suspected,’ he recalls. ‘There was a huge untapped market. Kenya.’

It was also a reality check moment for him when KFC approached Mr Mburu to supply them after encountering logistical challenges importing frozen fries.

‘Luckily, we had equipment, so we began exploring frozen fries at our Mlolongo facility. But we didn’t meet KFC standards initially,’ says the entrepreneur who was a banker at Fina Bank before venturing into potato processing.

This only pushed him to improve and in 2024 set up a new line for frozen fries. ‘The industry has grown in leaps. Very few people still import frozen fries,’ he observes.

Journey to industrial processor

Mr Mburu’s journey into the business began long before the online uproar. In 2012 he had his light bulb moment.

‘I was talking to a friend who operated a fast-food restaurant in town. He was lamenting about the value-chain challenges they faced as an industry, especially around handling French fries. As he talked, I realised that if I could take away their headache and offer a solution in potato handling, there was a business opportunity,’ he recalls.

At the time, most restaurants bought raw potatoes and processed them at the back of their outlets, a labour-intensive process that created significant waste-management challenges. The big idea, therefore, was to create efficiency for restaurants by delivering fresh-cut potatoes.

With a Sh175,000 loan, he set up Sereni Fries as a sole proprietorship and later quit his job in May 2013.

‘We started in Mlolongo, Machakos in a small room where my first employee and I worked at night. I would then deliver potatoes to all three of our clients in my Toyota Probox.’

Those early days were ‘messy but instructive’, he says. Through mistakes and miscalculations, especially on potato varieties, Mr Mburu learned the demands and standards of the industry.

The greatest lesson from that season, he says, was to always be willing to learn and never fear making mistakes.

A key strength of his business model has been audacity. Mr Mburu cracked the code of asking for business very early. Before their first year ended, he had secured a major client.

‘I knew someone who worked at the Hilton Hotel. He introduced me to the executive chef, a Frenchman, who immediately saw the brilliance of our idea. He asked for a sample; we delivered it the same day, and he approved it and placed our biggest order then-30 kilogrammes, which we delivered immediately.’

About a year later, the business had grown significantly. ‘We were pushing about 200 kilos a day. That made us realise we needed more people, more space, and more water to manage growth.’

They relocated to a bigger space in Mlolongo. Mr Mburu’s brother joined as an investor after buying into the vision. In the same year, Sereni Fries onboarded Big Square, Naivas Supermarkets, and their biggest client to date-Chicken Inn, operated by Simbisa Brands Kenya.

A major turning point came through a trip organised by the Dutch Embassy for Kenyan industry players to the Netherlands. ‘We explored the entire value chain and learned how to market better. It made us realise the impact this business could have back home. That trip confirmed that I was in the right industry.’

Their growth led them to an even larger facility, and in 2016 they moved to their current 9,000-square-metre operations plant in Mlolongo. Around this time, they made an important discovery: ‘We quickly noted that for every 100 kilos you process, you need one person. Understanding scaling and capacity from an informed standpoint changed everything.’

By 2019, the business seemed to have plateaued.

Then came 2021. A market ready to be claimed revealed itself. Besides KFC, other restaurants also started making inquiries about frozen fries.

Mr Mburu says,’That’s when we made the decision to move into frozen fries properly.’

Funding has been necessary at every phase of expansion. How has Sereni Fries achieved this? ‘We have grown in two ways: reinvesting our profits and through loans from a local bank that has believed in us since 2015.’

The core of their business-the potato-must be the right variety and quality. ‘Kenya is saturated with a variety called Shangi, which is not suitable for the products we make. After returning from the Netherlands, we began working with seed companies to introduce better varieties.’

Today, Sereni Fries works directly with farmers growing their preferred varieties, eliminating middlemen and ensuring quality. ‘We have a network of about 3,000 farmers from all potato-growing regions, both smallholder and large-scale. Our top varieties now are Markies and Challenger. ‘

Sereni Fries operates nine fresh-cut potato outlets countrywide, employing 65 people, and one frozen-fries line in Naivasha, employing 73 people.

‘With frozen fries, it’s easier to operate from one central location because the product does not need to get to clients as quickly as fresh-cut. We supply the entire country from Naivasha.’

Their production has grown nearly 800-fold. ‘We started with 30 kilos a day; now we do 9,125 tonnes annually. We plan to scale even further. Outside Kenya, only Egypt and South Africa do this kind of business. The potential in the Sub-Saharan region is huge. We are eyeing Uganda, Tanzania, Rwanda, and beyond.’

Industry knowledge has also propelled their growth. ‘We now know things we didn’t know when starting out. Knowledge increases efficiency, reduces wastage, and grows margins.’

What is Mr Mburu’s long-term vision?

‘My idea for Sereni Fries is to lead a potato revolution in the region-both in production and marketing. We want to steer it. The market is untapped, and if we are deliberate, it can become a key economic driver.’ He notes that Kenya will host the World Potato Congress in 2026. ‘If you ever needed a sign, this is it.’

As 2025 wraps up, Make Money takes a look at the wins of the year. We break down the top-performing asset classes and sectors and analyse the macroeconomic forces, policy shifts, and global trends that propelled their success.

We are joined by IC Group economist Churchill Ogutu.

Make Money, a podcast series, hosted by Kepha Muiruri, from Business Daily Africa unravels ways to be financially savvy. Get practical tips and advice on how to increase your income, build wealth, and achieve financial freedom in Kenya. Whether you’re just starting out or a seasoned investor, we’ve got something for everyone.

The value of building constructions in Nairobi dwarfed all 44 counties combined, underlining the concentration of real estate development in the capital city.

New Kenya National Bureau of Statistics (KNBS) data values work done on construction of buildings in Nairobi last year at Sh384.9 billion, which was 40.6 percent of all the constructions across the country.

Overall, work on setting up of buildings across the country was valued at Sh947.6 billion, inching closer to a trillion shillings after rising from Sh925 billion in 2023, and by a third over five years.

The KNBS data says during the year, the 44 counties had work valued at Sh361.7 billion on building constructions, translating to 38.2 percent of all constructions in the country.

Nairobi led with the highest value, followed by neighbouring Kiambu County, which implemented works valued at Sh120 billion, and Mombasa with works valued at Sh80.9 billion.

Nakuru County had building construction works valued at Sh35.4 billion, Machakos (Sh34.9 billion), and Kisumu (Sh23.9 billion).

The report provides context on construction across the country, at a time when the government continues to roll out projects under the affordable housing programme (AHP).

During the state of the nation address last month, President William Ruto said the government had launched the construction of 230,000 houses across the country.

‘The programme has created over 428,000 jobs, including architects, engineers, fundis, plumbers, electricians, carpenters, masons, transporters, and thousands of MSMEs in fittings and interior works. At peak next year, it will employ up to 1 million Kenyans,’ President Ruto said.

At least 13 counties had works valued more than Sh10 billion on the construction of buildings happening in 2024, including Machakos (Sh34.9 billion), Kisumu (Sh23.8 billion), Kajiado (Sh18.9 billion), Embu (Sh17 billion), Marsabit (Sh16 billion), and Murang’a (Sh15.9 billion).

Kirinyaga, Nyandarua, West Pokot, Tana River, and Lamu had the lowest value of construction works happening during the year, each valued below Sh1 billion.

The KNBS statistics show that 84,743 Kenyans were employed in construction of buildings last year, which was a slight drop from some 85,685 who were employed in 2023.

The industry, however, spent Sh236.2 billion paying the workers, which was a marginal increase from a wage bill of Sh235.1 billion the previous year.

Overall, output of the construction of buildings sub-sector was estimated at Sh849 billion, marking a 33.7 percent growth since 2020.

The statistics agency had earlier this year reported that the private sector completed construction of residential and commercial buildings valued at Sh149 billion in Nairobi last year, but the new report provides a wider picture of the total value of buildings that were completed, those that closed the year under construction, and those constructed by the government.

‘The total value of completed buildings in Nairobi City County declined by 2.3 percent to Sh149.9 billion in 2024. The number of reported completed private buildings declined from 22,093 in 2023 to 21,807 in 2024,’ KNBS said in the 2025 Economic Survey.

In the latest report on the value of building plans approved for construction in the capital, Nairobi City County data shows that buildings valued at Sh129.4 billion were approved over nine months to September 2025.

Wealthy families, celebrity athletes, investment delegations and ultra-private business executives are now driving the highest occupancy rates in Kenya’s presidential suites, setting a new standard for Kenya’s hospitality market.

Once dominated by heads of state and diplomatic entourages, the Sh1 million plus per night suites are increasingly being booked by a new class of high-spending travellers prioritising privacy, exclusivity and spaces that can double as both sanctuary and boardroom.

Mohammed Hersi, former Kenya Tourism Federation chairman, says presidential suites have evolved into some of the most strategic assets in Kenya’s luxury hospitality industry, driven by rising security expectations, changing traveller behavior, and a growing appetite for ultra-private experiences.

‘Wealthy families, celebrity athletes, investment delegations, and ultra-private business executives are driving the highest occupancy rates. The growth is unmistakable,’ Mr Hersi tells the Business Daily.

The new standard

Any hotel classified as five-star in Kenya, Mr Hersi says, now qualifies-or in some cases, is required-to have a presidential suite, a shift from earlier years when such suites were primarily reserved for hosting heads of state.

Over time, he says, the requirement has expanded to include all five-star establishments, reflecting the rising expectations of luxury travellers and the increasingly competitive nature of the hospitality sector.

‘The modern presidential suite goes far beyond size and aesthetics,’ says the hotelier, noting that since Covid-19 five years ago, guests are increasingly willing to pay $1,000 or more per night for the full experience.

According to the Kenya National Bureau of Statistics’ (KNBS) Quarterly Gross Domestic Product Report, Kenya’s hospitality sector recorded 4.1 percent growth in the first quarter of 2025, a sharp slowdown from the 38.1 percent surge during the same period last year, signalling a return to normal growth after the post-pandemic rebound of 2024.

‘We’re seeing a shift in expectations. High-end travellers are no longer satisfied with just luxury finishes; they want a space they can fully control, and many are willing to pay top dollar for that,’ says Mr Hersi.

What level of space control is satisfactory to these high-spending travellers?

‘They are highly engineered spaces built to international security standards, with separate entry and exit points, adjoining rooms for security, and pantries where meals can be inspected or prepared,’ explains Mr Hersi.

Despite the slower tourism growth pace, KNBs notes that international tourist arrivals rose 3.5 percent in the first four months of the year, reaching 751,692 visitors, while Kenya was named Africa’s fourth-best tourism destination and the top recipient of tourism FDI (foreign direct investment) in 2024 by UN Tourism, cementing its global reputation.

The requirement of presidential suite in all five star hotels underpins the competitive landscape of Nairobi’s luxury hospitality sector, where global and local brands want to attract top-tier clients and international events.

‘Nairobi hotels have them because they’re big with MICE (Meeting, Incentives, Conferences and Exhibitions). You can host 10 to 15 presidents at one go,’ Mr Hersi says.

What is luxury?

Javier Sanchez, the General Manager of Glee Nairobi, says that luxury today is defined by personalisation, privacy, and creating spaces where international clients feel completely at ease.

Mr Sanchez notes that focus is now on meeting the nuanced needs of privacy-driven international guests.

‘They come here to escape, to enjoy quiet and privacy. The true mark of luxury is the ability to be unseen, unheard, and entirely themselves. Our international clientele is no longer after extravagance; they want sanctuaries: spaces where every detail is tailored just for them,’ he explains.

Glee’s suite is divided into three distinct units, each with its own bedroom, living room, kitchen, and bathroom. Guests share a heated pool, dining area, and office space, all carefully insulated from the rest of the hotel.

‘What sets us apart is the way we personalise every experience for our guests. We charge $15,000, (Sh1.9 million) per night for the entire suite and $5,000 (Sh646,750) per night if you take the individual unit. A private chef prepares meals inside the suite so guests remain completely unseen by others in the hotel. We also gather details in advance; what temperature you want in your room, the type of linen on your bed, your preferred beverages, every element is tailor-made to suit the client,’ Mr Sanchez says.

‘It’s a sanctuary’

Acharya Javvaji, the General Manager of Muthu Sovereign Suites and Spa in Limuru, says their presidential suite attracts families on vacation as well as dignitaries seeking privacy and exclusive comfort.

‘We’ve seen a consistent rise in bookings for the presidential suite, especially among families looking for an intimate retreat and high-profile guests who require top-level discretion. Its exclusivity and tranquillity make it one of our most sought-after spaces. What guests love most is the experience. It’s not just a room, it’s a sanctuary. From private dining to the steam room and panoramic views, we designed it to feel like a home away from home for our most discerning visitors,’ he says.

Refined elegance

Anthony Chege, Nairobi Serena Hotel General Manager notes that the property has long been the address of choice for presidents and power brokers. Its two presidential suites, Chale and Lamu, stand as a cultural tribute to East African identity.

‘Our presidential suites are inspired by the coastal architectural traditions of Lamu and Zanzibar. They embrace a Pan-African approach with handcrafted details, warm textures and refined elegance,’ says Mr Chege.

Additionally, he notes that the demand for the suites has grown, attracting a diverse clientele, reflecting a broader shift in Kenya’s luxury hospitality market. Each client, Mr Chege observes, comes with different expectations, but all are seeking privacy, exclusivity, and highly personalised experiences.

‘We have seen increased bookings from statesmen, dignitaries, international celebrities, and high-profile corporate leaders, as well as local guests seeking elevated experiences for Valentine’s Day, anniversaries, and honeymoons. Booking one of the rooms comes with a price tag of Sh1million per night,’ he says.

Seamless integration

Over the years, Villa Rosa Kempinski and the Fairview Hotel have long maintained presidential-level accommodation designed to offer privacy, controlled access and the capacity to host official or sensitive meetings.

Kempinski’s suite, for instance, is known for its restricted floors and formal reception areas suitable for state guests. The Fairview, while more understated, caters to diplomatic travellers who prefer quiet, compound-style security and residential layouts.

Other Nairobi properties including Serena, Sankara and the Sarova Stanley also operate their own top-tier suites, reflecting sustained demand from government delegations, multinational executives and visiting dignitaries.

Safari Park Sales and Marketing Manager Mercy Wanjala says the value of the presidential suite lies in its seamless integration with high-level business and diplomatic needs. She notes that the hotel is occupied just 1-2 nights per month, translating to an annual rate of 7-10 percent.

She notes that bookings cluster around major conferences, national holidays, and key tourism seasons, with peak demand aligned to large summits, government and diplomatic events, cultural or sports occasions, and festive periods such as Christmas and New Year.

‘Corporate clients lead in frequency of bookings, followed closely by diplomatic delegations, international religious leaders, and government representatives. Heads of state and celebrities are accommodated selectively, while local high-net-worth clients occasionally reserve the suite for private events. All VIP bookings are managed under strict privacy and security protocols,’ says Ms Wanjala.

Bespoke services

She adds that most reservations for conferences, diplomatic visits, and corporate travel are made weeks or even months in advance to allow coordination of security and bespoke services.

However, last-minute bookings also occur, often for celebrity appearances, urgent corporate visits, or overflow from other events.

‘The standard nightly rate for Safari Park Hotel’s Presidential Suite is $2,500 plus government taxes, with custom pricing available for longer stays or bookings that include meeting rooms and catering. Pricing remains consistent regardless of season, event, or guest profile, though certain diplomatic or corporate contracts may involve confidential negotiated rates,’ she said.

Government spending on day-to-day expenses such as office supplies, transportation, fuel, travel and repairs in the first quarter of the current financial year ending June 2026, rose for the first time in three years, signaling easing of deep cuts in operational costs.

The National Treasury has disclosed in the latest quarterly budgetary report that operations and maintenance (O and M) expenditure for the July to September 2025 period climbed 41.34 percent to Sh320.90 billion.

The jump from Sh227.05 billion in the same quarter of the previous year marked the first early-year expansion in the cost of running public offices and maintaining State assets since President William Ruto took office, pledging deep austerity on non-essential supplies.

The spending further breached Treasury’s Sh267.08 billion quarterly O and M target by Sh53.82 billion, suggesting State ministries, departments and agencies have started catching up on deferred operational needs after two years of compressed budgets.

O and M spending covers a wide range of day-to-day costs, including office supplies, domestic and foreign travel, vehicle maintenance, fuel and lubrication costs, hospitality, repairs to public buildings and assets, telecommunications bills and other utilities such as electricity and water.

The rebound bucks the trend in the preceding two financial years. In the first quarter of last financial year ended June 2025, O and M spending dropped to Sh227.05 billion from Sh241.25 billion in the comparable quarter of financial year 2023/24 and Sh260.67 billion in 2022/23.

The rebound signals an easing of the deep cuts the administration imposed after the withdrawal of the Finance Bill 2024, which created a Sh344.3 billion hole in the national budget.

Hard-pressed citizens battling high cost of living amidst stagnant earnings resisted increased taxation, forcing the government into expenditure cuts of Sh170 billion and increased borrowing to make up for revenue shortfalls.

Operational expenses became a soft target, with sweeping reductions enforced across ministries, departments and agencies as the government raced to stabilise public finances during a period of youth-led nationwide anti-tax demonstrations.

‘What we ended up with was more like a 50-50 [situation] where we had to take more debt and reduce expenditure by almost Sh170 billion. This is a space where most government institutions had never been because. they did not get what they wanted,’ Treasury Principal Secretary Chris Kiptoo said on May 14 during an interview on NTV.

The early-financial year numbers indicate that after two years of austerity and restrained spending on non-essential operational needs, public offices have swung back into more active spending to cover their day-to-day functioning at a pace that could test the government’s commitment to tightening its purse strings.

The cuts that followed the collapse of the tax bill at the start of last fiscal year included removal of budgets for refurbishments and partitioning of government offices, purchase of new vehicles except for security agencies, halving of renovation expenditure and reduction of budgets for travel and hospitality.

Others were suspension of purchase of new cars, whose cost can top Sh30 million per unit, for the first six months, halving government advisers and ensuring enforcement of retirement of public servants aged 60.

Dr Ruto had also scrapped budgets for offices of first and second ladies as well as confidential budgets for State House and all public offices as part of expenditure cuts following the collapse of a plan for new and higher taxes.

The anti-government protests-induced austerity was in addition to earlier announced removal of non-essential expenditures such as printing, advertising, travel, communication supplies and services, training, hospitality, furniture, refurbishment and vehicle purchase as well as research and feasibility studies for public offices.

At the recent Kenya Revenue Authority (KRA) Summit, I had the privilege of joining fellow panellists to discuss how strategic data exchange is transforming public finance.

The conversation reaffirmed a lesson I have learned throughout my years in tax administration, that the future of effective revenue management depends on how well institutions connect, share information responsibly, and use data to build trust, protect revenue, and strengthen governance.

Across the world, governments are reimagining governance through data. When used strategically, data helps institutions anticipate risks, enhance transparency, and promote fairness.

For tax administrations, it has become the most powerful weapon against evasion, illicit trade, and financial crime. The shift toward data-driven governance is transforming how countries safeguard revenue.

When agencies share information securely and in real time, they create a single, accurate view of economic activity, closing compliance gaps and deterring fraud. But when institutions operate in silos, inefficiencies thrive and opportunities for manipulation multiply.

Kenya is firmly part of this transformation. Through deliberate investment in digital infrastructure and inter-agency collaboration, the KRA is demonstrating how data sharing can protect national revenue while upholding citizens’ rights.

Every data-sharing arrangement is guided by Kenya’s Data Protection Act and subjected to a rigorous risk-benefit analysis.

This ensures that the sensitivity of the data, potential vulnerabilities, and the intended public good are carefully weighed. Strong governance structures reinforce these safeguards while each agreement defines roles, responsibilities, and oversight mechanisms, supported by audit trails and reporting obligations.

These are not bureaucratic formalities but rather, strategic instruments for preserving institutional integrity and public confidence.

Kenya’s Medium-Term Revenue Strategy places inter-agency data sharing at the heart of modern revenue administration, and KRA’s results speak for themselves.

Integration with government agencies such as the Registrar of Persons and the Business Registration Service have enabled real-time verification of taxpayer identities and early detection of shell companies.

Linkages with the National Transport and Safety Authority and eCitizen platforms have enabled automated checks across business registrations, vehicle ownership, and declared income; providing a unified compliance picture that deters evasion.

In the excise sector, KRA’s collaboration with relevant law enforcement agencies has transformed monitoring of excisable goods, with digital tax stamps allowing real-time tracking of alcohol and tobacco products, reducing illicit trade and under-declaration.

Likewise, collaboration in the betting and gaming sector has enhanced oversight of betting transactions and verification of declared revenues. These integrations have improved compliance, sealed revenue leaks, and strengthened anti-money laundering controls.

KRA’s next frontier is to convert shared data into predictive intelligence through analytics and artificial intelligence to detect anomalies such as unexplained wealth, sudden income spikes, or mismatched value-added tax claims before they evolve into non-compliance.

Achieving this will require interoperability and common data standards to ensure that government systems communicate efficiently. Such seamless integration will significantly reduce friction for compliant taxpayers while raising the cost of evasion for bad actors.

Strategic data sharing is, therefore, a governance philosophy, reflecting Kenya’s broader commitment to transparency, accountability, and equity in public finance.

For the KRA, the goal is not surveillance but service; to use data responsibly to build a fairer, more efficient tax system where compliance is easy, evasion is difficult, and trust is strengthened.