Category: Business Daily

Investors in industrial and medical gas manufacturer BOC Kenya are set for a payout of Sh12.85 per share after the firm’s net profit grew 46.9 percent to Sh311.02 million in the financial year ended December 2025.

The dividend payout, totalling Sh250.9 million, represents a 48.5 percent increase from Sh8.65 per share, amounting to Sh168.89 million, paid on the previous year’s Sh211.65 million net profit. This marks the second consecutive year of increased payouts, following dividends of Sh6.05 per share in both 2022 and 2023.

The dividend – equivalent to 80.7 percent of net profit – positions BOC among the more generous payers on the Nairobi Securities Exchange. Over the six years to 2024, the firm distributed between 59.6 percent and 79.8 percent of its annual net income as dividends.

The company paid an interim dividend of Sh2.50 per share in October last year and has now proposed a final distribution of Sh10.35. This will be paid on or about July 21 to shareholders on the register at the close of business on May 31, 2026.

The firm is 65.38 percent owned by BOC Holdings (UK), followed by Kiuna Ngugi with a 17.91 percent stake.

Earnings growth

In the year ended December 2025, BOC’s revenue grew 18.5 percent to Sh1.43 billion from Sh1.2 billion, driven by increased demand for gas.

‘Revenue increased by 19 percent this year compared to the prior year, driven by strong growth in customer engineering projects and increased demand for medical and industrial gases,’ said the firm in a commentary accompanying the financial results.

The firm added that distribution, selling and administrative expenses declined following cost-control measures implemented by management, further boosting profits.

The board said the company continues to strengthen its leadership in medical gases while expanding its industrial gases footprint by engaging the manufacturing, services, agricultural and fabrication sectors.

‘This strategic approach underpins long-term resilience, broadens market presence, and supports sustainable growth,’ said the firm.

Thousands of taxpayers were granted penalty waivers on Sh4.76 billion owed to the Kenya Revenue Authority (KRA) in breach of amnesty rules, raising questions on the handling of the scheme.

The Auditor-General’s report on the KRA for the year to June 2025 shows that 4,677 taxpayers ben-efited from the scheme without having a repayment plan for the billions of shillings owed in principal taxes.

The audit shows the taxpayers, including individuals and businesses, were forgiven Sh290.48 million penalties and interest, marking a breach of the law since they had not settled the principal taxes.

The report notes that the KRA breached the Tax Procedures (Amendment) Act, 2024, which sets conditions for forgiveness of penalties and interest, including the requirement that one must have fully settled the principal tax or shared a repayment plan.

KRA staff have been previously accused of helping to fraudulently clear cargo and alter records to help people dodge tax payments, leading to revenue losses.

The tax amnesty scheme was aimed at boosting revenues amid pressure on the KRA to weed out tax evaders and raise collections through increased compliance.

‘Review of the tax amnesty uptake indicated that it was granted on penalties, interest and fines of Sh290.48 million to 4,677 taxpayers, despite the taxpayers owing the authority Sh4.75 billion in outstanding principal taxes, relating to tax periods up to 31 December, 2023,’ says the audit report.

‘This was contrary to the Tax Procedures (Amendment) Act, 2024, which requires that, to qualify for amnesty, a taxpayer must have either fully paid all principal taxes or have an approved payment plan under which the outstanding principal taxes would be fully settled by 30 June, 2025.’

Under the law, taxpayers qualify for amnesty after settling the principal tax or tabling an approved payment plan that guarantees full settlement of the principal before June 30, 2025.

The audit, however, indicates that these conditions were not met, yet the penalties were written off.

The programme was first introduced in 2023, granting tax amnesty on penalties and interest for periods up to the end of December 2022. It initially ran until June 2024 before being extended to June 30, 2025, allowing for the waiver of penalties and interest accrued on tax debts for periods up to the end of December 2023.

The KRA has in the past praised the programme for generating Sh29 billion while bringing 3.5 million taxpayers into compliance-a performance it termed as ‘a proof to our balanced approach of enforcement and facilitation.’

The audit findings raise questions on the credibility of the amnesty programme, which was designed to encourage tax compliance while helping the KRA collect principal taxes.

The audit further raises red flags over how the amnesty was implemented in the tax system. It found that there was use of direct record deletions instead of standard accounting procedures, where the trail must remain visible in the system.

The audit found that tax relief amounting to Sh1.29 billion was processed through direct deletion from taxpayers’ ledgers instead of processing them through credit entries.

‘Further, a tax amnesty of Sh1,288,365,274 was implemented by direct deletion from taxpayer ledgers rather than being offset through credit entries. ln the circumstances, management was in breach of the law,’ said the audit.

Under accounting rules of double entry, the tax amnesty should have been recorded as a credit against a taxpayer’s account, preserving an audit trail that shows the original liability, the relief granted and the resulting balance. Direct deletion removes the liability without leaving a clear record of the adjustment, making it difficult to track the application of the amnesty across individual accounts.

The tax amnesty programme was intended to unlock collections from non-compliant taxpayers as part of the country’s tax administration reforms aimed at expanding the revenue base and reducing reliance on debt.

The spotlight on the handling of the amnesty programme came in the period Auditor-General Nancy Gathungu disclosed that the KRA had issued tax compliance certificates (TCCs) to 3,054 taxpayers despite them having Sh3.12 billion tax arrears and without a payment plan in place.

The report indicates that the affected taxpayers had not objected to the tax assessments or entered into any structured payment plans-conditions that would have allowed them to legally qualify for the certificates.

Ms Gathungu’s findings come at a time when the government is under pressure to boost revenue collection amid rising fiscal constraints and public scrutiny over tax fairness.

State House has previously accused the tax collection agency’s staff of cutting government revenue by engaging in corruption, colluding with tax evaders and taking bribes.

President William Ruto also accused KRA staff of resisting and sabotaging attempts to digitise revenue collection in the past to prevent the government from sealing loopholes.

In terms of tax collected as a proportion of annual economic output, Kenya has been underperforming other nations like South Africa as it struggles to widen the tax net.

The KRA’s revenue collections were Sh2.257 trillion in the financial year ended June 2025 against the targeted Sh2.305 trillion, being a Sh48 billion shortfall.

In the current financial year ending June 2026, the KRA is banking on increased deployment of technology and other enforcement tools to raise Sh932 billion in the final three months in a bid to meet its Sh2.97 trillion annual revenue target.

The aggressive final-quarter push comes after the agency collected Sh2.038 trillion by the end of March, the first time it has crossed the Sh2 trillion mark within nine months.

Kenya has turned to the World Bank for rapid additional funding by June to cushion its economy from the shocks of the US-Israel war with Iran.

This means that Kenya now expects a bigger disbursement from the World Bank, much higher than the $750 million (Sh96 billion) loan that was factored into the 2025/26 budget at the beginning of the fiscal year in July 2025.

Kenya’s request for additional financing from the World Bank comes against the backdrop of the recent decline in foreign exchange reserves, which fell by $1.3 billion (Sh167.9 billion) between March 5 and April 9, 2026, to close at $13.3 billion (Sh1.7 trillion), translating to 5.7 months of import cover.

The Central Bank of Kenya (CBK) said that the additional World Bank cash is expected before the close of June 2026 and will be drawn from the multilateral lender’s rapid repose financing schemes. This will mark an additional financing request beyond the earlier targeted $750 million (Sh96.93 billion) Development Policy Operation (DPO) loan to Kenya, which, however, remains withheld due to delays in enacting reforms.

‘We have had very good discussions with the World Bank on the DPO and also getting additional financing, given the kind of shocks that we are facing. We hope that we can reach an agreement with the World Bank on the Rapid Results Operation so that we can get additional financing over and above the Development Policy Operation (DPO),’ CBK Governor, Kamau Thugge, told Business Daily on the sidelines of the just concluded Spring Meetings in Washington, DC.

The CBK did not indicate how much additional funds Kenya targets to receive from the World Bank, but termed it a ‘significant’ amount.

‘Our hope and expectations are that this money will come in this financial year. The amount of financing is yet to be determined, but it is about getting additional financing from already existing commitments which are yet to be disbursed,’ Dr Thugge said.

‘I would say it is a significant amount and could be quite close to the size of the DPO itself. Because this funding has already been approved by the board, there will not be any need for additional approval,’ the CBK boss added.

The multilateral lender uses the DPO to support countries in implementing policy and institutional reforms to achieve economic growth and reduce poverty. The DPOs offer financial assistance in exchange for specific policy changes designed to improve areas like public finance, market efficiency, and climate action.

Kenya has, however, not tapped the DPO loan after the World Bank expressed reservations over delayed reforms linked to the reinforcement of fiscal management, improving governance, and tackling conflicts of interest among public officials.

President William Ruto signed the Conflict of Interest Act on July 30, 2025, as part of Kenya’s attempt to address the impasse with the World Bank.

The Conflict of Interest Act, which came into effect on August 19, 2025, repealed the Public Officer Ethics Act and established a consolidated statutory framework to regulate and manage conflicts of interest within the public sector.

Dr Thugge said that whereas the CBK is comfortable with the present level of foreign exchange reserves at 5.8 months of import cover, there is a need to further strengthen the country’s buffers, given the uncertainty around the US/Israel – Iran War and how long it will last.

‘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. 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,’ Dr Thugge says.

Kenya is battling renewed inflationary pressure amid disruption in the importation of key items, including petroleum products. The ongoing Middle East war, which first started on February 28, has disrupted activities on the Strait of Hormuz, a global chokepoint serving as an artery for 20 percent of the world’s total oil supply and 30 percent of the world’s maritime trade.

Dividends are becoming a central pillar of wealth creation, beyond share price gains. As listed firms, particularly banks, ramp up shareholder payouts, Make Money explores how investors can position for steady dividend income.

AIB-AXYS Africa Senior Research Analyst Joseph Muriithi breaks down the mechanics behind dividend investing.

The entry of new fund managers has cut the dominance of Kenya’s old guard in the unit trust funds/collective investment schemes, as competition intensifies.

CIC, NCBA, Britam, Sanlam and ICEA unit trust funds have largely lost their market share, with their combined market share dipping to 49.5 percent as of December 2025 from 82.28 percent in December 2021.

New entrants, including Standard Investment, Etica, Ziidi Money Market Fund, and Nabo Africa Funds, have eaten into the market share of the top shots, now controlling a 5.9 percent stake.

Stiff competition in the collective investments space has seen the number of approved schemes rising to 59 in December 2025 from 29 previously.

The newer funds have also brought with them fresh asset classes like special funds which have grown in appeal among local investors.

‘Back in the day, we only had money market funds (MMFs). Now we can see that the second largest fund is a special fund and the top manager has benefitted from partnerships,’ said Etica Capital Portfolio Manager Kenneth Maina.

‘This also shows that investor knowledge has changed over time to where we are now seeing investors taking on riskier asset classes.’

CIC Unit Trust Scheme, which was the largest unit trust fund in 2021 with a market share of 41.79 percent has since fallen to third place with a smaller share of 13.5 percent as of December 2025 as per regulatory filings.

NCBA, Britam and ICEA have also marked a drop from 13.37 percent, 10.82 percent and 9.91 percent respectively to 6.9 percent, seven percent and three percent.

Sanlam Unit Trust Scheme is the only outlier among the old guard, growing its market share from 6.39 percent in December 2021 to 19.1 percent to become the largest collective investment scheme with assets under management of Sh144.3 billion.

Sanlam’s rise was aided by partnerships with other financial institutions including the Standard Chartered Bank, which has helped grow the fund manager’s client base and asset under management (AUM).

Standard Investment Trust Fund which offers the MansaX fund has meanwhile emerged as the second largest unit trust fund with an AUM of Sh125.3 billion as of December 2025.

The scheme pioneered special funds in the market beginning in 2019 hence its growth signifies the rising appeal for riskier asset classes among investing Kenyans.

New fund managers have taken up significant market shares in recent years with Etica, Ziidi Money Market Fund and Nabo Africa Funds having an AUM of more than Sh10 billion each.

The top three schemes, Sanlam, Standard Investment, and CIC, collectively control nearly half of the unit trust market or a 49.1 percent market share while the top five funds account for 63.1 percent of total AUM.

The top 10 schemes meanwhile control 80.1 percent of the market. The total assets under management held by fund managers as of December 31, 2025, was Sh756.2 billion.

The Capital Markets Authority (CMA) credits the 11 percent increase in AUM from Sh679.6 billion reported in September 2025 to the creation of additional funds and increased marketing.

‘The increase can also be attributed to intensified marketing efforts by the fund managers,’ CMA said.

Collective investment schemes pool funds from multiple investors, creating units which then earn a return for the investors.

The funds primarily invest in short-term instruments like Treasury bills, fixed bank deposits, and equities/stocks.

The Court of Appeal has maintained that there would be no automatic equal division of matrimonial property, dealing a blow to a woman who had sought half of a Sh179 million estate in a bitter divorce case.

In a judgment that reinforces the legal position on matrimonial property division, appellate judges upheld a High Court decision awarding the woman only 25 percent of the marital assets while her ex-husband retained 75 percent, based on their respective contributions to the marriage.

The three-judge bench emphasised that property division must reflect proven contributions – both financial and non-financial – rather than assumptions of equal entitlement.

“It is a fatal misconception for a man or woman to think that being married is a passport to 50 percent of matrimonial wealth,” the judges ruled. “Contributions must be demonstrated, not merely claimed.”

They stated: “It is not enough for a party to say they have contributed when they have nothing to show for such contribution, be it monetary or non-monetary, beyond their say so.’

The case involved a high-flying corporate executive and his wife, whose 14-year marriage spanned seven countries before collapsing in 2012. Court records show the couple lived in Kenya, Tanzania, the United Kingdom, China, Cambodia, Indonesia, and Ethiopia during their union.

At the centre of the dispute were prime properties, including a four-bedroom house in Karen, a three-bedroom semi-detached house in the UK, beach land in Shimoni, Kwale, cash in multiple bank accounts in Kenya, the UK, and Indonesia.

Also at stake were investments accumulated during the marriage, including two luxury vehicles.

According to the court record, the couple blamed each other for the breakdown of the marriage. The man, identified in court papers as Mr JAV, accused the woman, Ms NWM, of willingly refusing to find a job despite her high academic qualifications.

Instead, she spent most of her time indoors, getting inebriated day and night, and eventually became an alcoholic. This led to her being irritable with a bad and uncontrolled temper.

Ms NWM, on her part, accused the ex-husband of being cold, distant, and secretive, and wanting to kill her and their adopted child by poisoning.

Ms NWM had sought an equal share of the property, arguing her homemaking role and support for her husband’s international career constituted a substantial non-financial contribution.

Her ex-husband countered that he was the sole financial provider, presenting bank records showing earnings exceeding Sh179 million.

He accused her of withdrawing Sh42 million from joint accounts as their marriage crumbled.

The High Court in 2018 found the husband contributed 95 percent financially, while the wife’s monetary input was just five percent. However, it recognised her non-monetary contributions, including childcare and supervising the construction of their Karen home, awarding her 25 percent of the estate.

In her appeal, Ms NWM argued the trial judge undervalued non-financial contributions and failed to apply constitutional principles of spousal equality. She insisted that jointly registered property should be presumed equally owned.

The appellate court dismissed these arguments, ruling that equality in marriage does not automatically mean equal property shares. The judges noted that the husband had provided detailed financial records proving he funded nearly all acquisitions.

‘It is not enough for a party to say they have contributed when they have nothing to show for such a contribution,’ they added.

The court also held that the presumption of equal ownership in jointly registered property can be rebutted by evidence showing unequal contribution. In this case, the judges ruled that the husband had successfully displaced that presumption.

On the Sh42 million withdrawals, the court agreed with the High Court that the money should be treated as part of Ms NWM’s share since she could not account for its use.

The judges also rejected her bid for the Karen home, noting this would push her share to nearly 80 percent, far beyond what her contributions warranted.

The court concluded that the 25:75 division was fair and consistent with the evidence presented.

It also rejected claims that the trial court ignored the current legal framework, finding that it properly applied the law on matrimonial property.

Article 201 of the Constitution requires that public finances be utilised prudently, in a manner that is fair, transparent and cost-effective. But it is never quite so.

Very often, we receive updates from the Auditor General pointing to improper use of budgetary allocations in public projects, leading to either no or substandard outcomes. It is not unusual to hear, for instance, of infrastructure initiatives that were started but stalled midway through because of insufficient resources.

Sometimes, private contractors pull out and leave in frustration after spending hefty capital on public projects, only to realise that they cannot be compensated for various reasons. The private contractors who knowingly deploy substandard work and get paid for it, only for dire consequences to follow soon after, leaving the contracting authority in the mud.

Public initiatives are now subject to intense scrutiny. For private sector players seeking public contracts, it is increasingly important to rigorously review tender applications and awards to avoid unwelcome surprises at the end. The same applies to awarding institutions because the success or failure of any public contract is a shared outcome.

One of the key facets of contracts in public procurement is that in all instances, the contract extends beyond the signed agreement. The tender document, any addenda, and letter of award together form the full contractual framework.

In many cases, key performance obligations are embedded deep within these documents and overlooking them can lead to compliance failures or disputes over scope and delivery. Taking a holistic view helps ensure that both parties fully understand what is required.

Clarity in service definition is another area that cannot be overlooked. Services must be described in precise, measurable terms, with clear performance indicators and deliverables. Vague or generic descriptions not only hinder accountability but also complicate contract management and evaluation.

The question of data ownership, particularly after termination, also benefits from early clarity. In most cases, the procuring entity remains the data controller, unless the contract provides otherwise. Setting out rights and obligations around access, use and retention of data helps avoid disputes at the end of the contract.

Agreements and related records should be well-maintained to ensure they can be relied upon in the event of an audit or dispute.

Thousands of taxpayers were granted penalty waivers on Sh4.76 billion owed to the Kenya Revenue Authority (KRA) in breach of amnesty rules, raising questions on the handling of the scheme.

The Auditor-General’s report on the KRA for the year to June 2025 shows that 4,677 taxpayers ben-efited from the scheme without having a repayment plan for the billions of shillings owed in principal taxes.

The audit shows the taxpayers, including individuals and businesses, were forgiven Sh290.48 million penalties and interest, marking a breach of the law since they had not settled the principal taxes.

The report notes that the KRA breached the Tax Procedures (Amendment) Act, 2024, which sets conditions for forgiveness of penalties and interest, including the requirement that one must have fully settled the principal tax or shared a repayment plan.

KRA staff have been previously accused of helping to fraudulently clear cargo and alter records to help people dodge tax payments, leading to revenue losses.

The tax amnesty scheme was aimed at boosting revenues amid pressure on the KRA to weed out tax evaders and raise collections through increased compliance.

‘Review of the tax amnesty uptake indicated that it was granted on penalties, interest and fines of Sh290.48 million to 4,677 taxpayers, despite the taxpayers owing the authority Sh4.75 billion in outstanding principal taxes, relating to tax periods up to 31 December, 2023,’ says the audit report.

‘This was contrary to the Tax Procedures (Amendment) Act, 2024, which requires that, to qualify for amnesty, a taxpayer must have either fully paid all principal taxes or have an approved payment plan under which the outstanding principal taxes would be fully settled by 30 June, 2025.’

Under the law, taxpayers qualify for amnesty after settling the principal tax or tabling an approved payment plan that guarantees full settlement of the principal before June 30, 2025.

The audit, however, indicates that these conditions were not met, yet the penalties were written off.

The programme was first introduced in 2023, granting tax amnesty on penalties and interest for periods up to the end of December 2022. It initially ran until June 2024 before being extended to June 30, 2025, allowing for the waiver of penalties and interest accrued on tax debts for periods up to the end of December 2023.

The KRA has in the past praised the programme for generating Sh29 billion while bringing 3.5 million taxpayers into compliance-a performance it termed as ‘a proof to our balanced approach of enforcement and facilitation.’

The audit findings raise questions on the credibility of the amnesty programme, which was designed to encourage tax compliance while helping the KRA collect principal taxes.

The audit further raises red flags over how the amnesty was implemented in the tax system. It found that there was use of direct record deletions instead of standard accounting procedures, where the trail must remain visible in the system.

The audit found that tax relief amounting to Sh1.29 billion was processed through direct deletion from taxpayers’ ledgers instead of processing them through credit entries.

‘Further, a tax amnesty of Sh1,288,365,274 was implemented by direct deletion from taxpayer ledgers rather than being offset through credit entries. ln the circumstances, management was in breach of the law,’ said the audit.

Under accounting rules of double entry, the tax amnesty should have been recorded as a credit against a taxpayer’s account, preserving an audit trail that shows the original liability, the relief granted and the resulting balance. Direct deletion removes the liability without leaving a clear record of the adjustment, making it difficult to track the application of the amnesty across individual accounts.

The tax amnesty programme was intended to unlock collections from non-compliant taxpayers as part of the country’s tax administration reforms aimed at expanding the revenue base and reducing reliance on debt.

The spotlight on the handling of the amnesty programme came in the period Auditor-General Nancy Gathungu disclosed that the KRA had issued tax compliance certificates (TCCs) to 3,054 taxpayers despite them having Sh3.12 billion tax arrears and without a payment plan in place.

The report indicates that the affected taxpayers had not objected to the tax assessments or entered into any structured payment plans-conditions that would have allowed them to legally qualify for the certificates.

Ms Gathungu’s findings come at a time when the government is under pressure to boost revenue collection amid rising fiscal constraints and public scrutiny over tax fairness.

State House has previously accused the tax collection agency’s staff of cutting government revenue by engaging in corruption, colluding with tax evaders and taking bribes.

President William Ruto also accused KRA staff of resisting and sabotaging attempts to digitise revenue collection in the past to prevent the government from sealing loopholes.

In terms of tax collected as a proportion of annual economic output, Kenya has been underperforming other nations like South Africa as it struggles to widen the tax net.

The KRA’s revenue collections were Sh2.257 trillion in the financial year ended June 2025 against the targeted Sh2.305 trillion, being a Sh48 billion shortfall.

In the current financial year ending June 2026, the KRA is banking on increased deployment of technology and other enforcement tools to raise Sh932 billion in the final three months in a bid to meet its Sh2.97 trillion annual revenue target.

The aggressive final-quarter push comes after the agency collected Sh2.038 trillion by the end of March, the first time it has crossed the Sh2 trillion mark within nine months.

There is a kind of theft of public resources that does not appear in the reports of the Ethics and Anti-Corruption Commission. No safe is cracked.

The thief wears a pressed suit, sits on an armchair in a red-carpeted office, drives an SUV, and is protected by armed bodyguards. He steals through delay. This is the story of the Mombasa Gate Bridge – and Kenya’s taxpayers are the victims.

The facts are damning enough without embellishment. In 2019, Kenya and Japan signed a loan agreement for a bridge across the Likoni Channel – one of the most dangerous crossings on the East African coast.

The terms are the envy of any finance minister in Africa: interest at 0.1 percent, a 12-year grace period, a 30-year repayment window, and an outright grant element worth Sh6 billion.

The first tranche of the loan was disbursed. Advance payments flowed to consultants. A procurement competition was run to its conclusion. A winner emerged. And then – nothing. For nearly two years, the procurement entity has sat on the award while the Kenyan taxpayer has haemorrhaged an estimated Sh4 billion in commitment fees.

Four billion shillings for a bridge that has not broken a single centimetre of ground.

Procurement delay of this nature – deliberate, sustained, after a competition has produced a winner – is not administrative backlog. It is the machinery of corruption in its most sophisticated form.

Someone is using bureaucratic inertia as a weapon. The goal is to manufacture enough fiscal pain and political fatigue that the original arrangement collapses – and a new one, more favourable to different interests, takes its place.

Now, a new narrative is being floated within government circles: that the project is too expensive and the financing model should be rethought. That Kenya could instead mobilise domestic resources -pension funds and institutional investors – through an infrastructure fund model.

That a securitisation structure, possibly involving a Chinese contractor, could deliver the same project more cheaply. We are told that now that the Dongo Kundu bypass road is complete, the Likoni crossing is less urgent.

Each argument deserves to be called what it is: financially unsound, strategically reckless, or both. Pension fund money carries market return expectations – a far higher cost of capital than 0.1 percent.

Securitisation with a Chinese contractor embeds financing costs inside the construction price, making it opaque and almost always more expensive in aggregate.

Do we really want to hand back the Sh6 billion grant element on the Japanese loan? As for the bypass argument – have you driven on it on a Thursday or Friday when it clogs? The ambition was to build a link of higher quality to support and attract investment at the Ndongo Kundu SEZ.

Then there is the diplomatic cost, which appears to have entered no calculation at the National Treasury. Japan helped author the Mombasa master plan. Japan is funding the ongoing rehabilitation of Mombasa port.

Japan designed the Dongo Kundu Special Economic Zone as the flagship of Kenya’s entire SEZ programme – the first domino in a sequence intended to include Naivasha and Kisumu.

Cancel this credit, pivot to a Chinese deal, and we must look Tokyo in the eye and explain ourselves. We must be prepared for the consequences at the port, at Dongo Kundu, and in every future ODA conversation with an ally cultivated over decades – all to spare someone the inconvenience of a transparent procurement outcome they did not control.

The 12-year grace period on the Japanese loan was structured with a specific intention: that it expires at roughly the same time the bridge opens, so that toll revenues service the debt from day one.

Every month of delay closes that window. At some point – and the government must be honest about how close that point is – Kenya will begin repaying a loan on a bridge that does not exist. No minister will volunteer to explain it. But the taxpayer will feel it.

The government should award the contract immediately. Not merely because Japan deserves the gesture, though they do. Not merely because the diplomatic relationship demands it, though it does.

Award it because the people of the South Coast have waited long enough. Award it because the Likoni Channel has claimed lives that a bridge would have saved. Award it because the law requires that a completed procurement be concluded – and the law is not a suggestion.

Grand corruption does not always arrive with a smoking gun. Sometimes it comes as a memo recommending delay. Sometimes it wears the language of fiscal prudence and alternative financing mechanisms.

Sometimes it sits in a procurement committee and does absolutely nothing – and collects its reward precisely because nothing is what was required. I rest my case.

Kenya has announced a strategy shift in its mining sector from exporting raw minerals to processing them locally, in a bid to unlock jobs and generate higher earnings from exports. Secretary of Mines in the Ministry of Mining, Blue Economy and Maritime Affairs and chief executive to the Mineral Rights Board Thomas Mutwiwa explains the policy push, the delays around key value addition projects and how reforms are reshaping the sector.

Kenya has long exported raw minerals. Why the shift to value addition now?

For many years, we have looked at mining from a very traditional perspective, which is extract and export. But if you look at countries that have succeeded, they have moved beyond that. They process, they manufacture and they industrialise around their minerals. That is where the real value is.

In Kenya, we have the mineral potential, but that potential has not translated into significant GDP (gross domestic product) contribution. We deliberately want to move from just mining to value addition, so that we can create jobs, increase exports and earn more as a country.

What does this value addition look like in practical terms for Kenya?

It means putting in place facilities that can process minerals to internationally acceptable standards before export. Take gold as an example. Instead of exporting semi-processed gold, we will refine it locally to 99.99 percent purity. That is what fetches better prices in the international market.

We have started doing this for gemstones. Rather than exporting rough stones, we have started cutting and polishing them locally.

The same applies to industrial minerals like limestone, silica sand and others. We have built industries around limestone, and Kenya is now a net exporter of cement. We can also build more factories around silica sands which are used in glass manufacturing.

The Kakamega gold refinery is central to this plan, but it is behind the initial June 2025 schedule. What went wrong and where are you with this project?

The refinery is about 80 percent complete. Ideally, this is something that should have been done much earlier. But like many large projects, there have been challenges, mainly legal issues and litigation involving contractors.

We have addressed most of those issues, and we expect that within the next six months or so, the refinery should be up and running. Once operational, it will be a key facility in anchoring the gold value chain in this country and region.

How will the refinery change the gold sector?

The gold space in Kenya is enormous, especially along the greenstone belt stretching from Narok through Migori, Kakamega and into Turkana and Marsabit. A large population depends on this sector, particularly artisanal miners.

Right now, much of the gold leaves the country in raw or semi-processed form, and a lot of it is unaccounted for. With a refinery, we will create a structured system where gold from artisanal miners, small-scale miners and even large-scale operations is processed locally to international standards.

You have acknowledged that a lot of gold is smuggled out of the country. How does value addition address this?

Smuggling has been a big challenge because the value chain was not properly structured. What we are doing now is licensing every stage: from artisanal miners to dealers, leaching plants and elution plants.

The idea is to ensure that gold produced in Kenya moves through a formal system, right from extraction to processing to refining. Ultimately, we want most of the gold to be sold within the country and exported through a controlled channel.

Where do artisanal gold miners fit into this new model?

They are central to this project. We have already formed dozens of artisanal mining committees and licensed over 200 cooperatives. These miners produce a significant portion of the gold, but historically they have operated informally.

Now, we are bringing them into the formal system. We are also licensing facilities such as carbon-in-pulp and carbon-in-leach processors to handle their output. This ensures that even the tailings-the material previously considered waste-can be processed and contribute to overall production.

Apart from gold, what other value addition initiatives are underway?

The Voi Gemstone Centre is already operational. It is a common user facility serving the gemstone belt along the Mozambican geological formation. Artisanal miners can bring their stones there for value addition, including cutting, polishing and grading, before sale or export. We also have potential in industrial minerals. We already export clinker and cement products, but there is room to expand further.

You mentioned the need for more gold refineries. What is the plan ?

Kakamega is a starting point, but it will not be enough as production increases. There is room for at least one or two additional refineries, possibly in Nairobi or Machakos, to serve as aggregation and processing centres. However, those decisions will be made by higher authorities.

Critics say Kenya’s problem is not just processing but lack of credible data on mineral deposits. How are you addressing that?

That is a valid point. One of the reasons we have not realised our potential is limited investment in exploration. Without proper data, it is difficult to attract serious investors.

We recently conducted an airborne geophysical survey [between 2019 and 2022] and identified about 970 mineral anomalies. We are currently doing ground trothing. Once we have quantifiable data, we can convert these into bankable resources and move into production.

You have also tightened licensing rules after lifting the moratorium. Aren’t these reforms discouraging small players?

The intention is not to lock out genuine investors, but to ensure that only serious players enter the sector. In the past, we had what we call ‘briefcase miners’. Now, applicants must demonstrate financial capability, submit feasibility studies and provide clear work programmes. This ensures that licences go to those who can actually invest and deliver results.

How are communities benefiting from the resources mined from their areas?

The Mining Act 2016 introduced a structured system for sharing benefits. Royalties are distributed with 70 percent going to the national government, 20 percent to counties and 10 percent to communities. In addition, there is a requirement that at least 1 percent of gross sales go into community development agreements. These funds support local projects.

What revenues is the sector generating to the exchequer?

Over the past four years, we have collected about Sh15.6 billion in royalties. In between that period, there have been fluctuations and one of the reasons is the exit of Base Titanium which actually had an impact on revenues. But we are working to close that gap.