Category: Business Daily

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.

Commercial banks are using the Central Bank Rate (CBR) as their benchmark in setting loan prices, despite earlier rejecting it and negotiating the creation of the Kenya Shilling Overnight Interbank Average (Kesonia) which they have now shelved.

Banks including KCB, Equity, Absa, NCBA and DTB have issued notices that they will be using CBR as their reference rate in the risk based pricing model which took effect on December 1.

Banks were expected to use Kesonia -which is based on the price at which banks borrow from each other referred to as interbank rate- as they are the ones who had pushed for its creation after they rejected the Central Bank of Kenya proposal to use the CBR as a benchmark for loan pricing.

‘All new local currency variable rate loan facilities processed from December 1, 2025 will be priced under the revised model which comprises a common reference rate plus a premium (K),” said Absa Bank Kenya in a public notice.

“The common reference rate applicable will be the Central Bank Rate as determined by the monetary policy committee of the Central Bank of Kenya while the premium is determined by customer specific risk profile among other factors.”

The bank said it was testing its core system before using Kesonia as its benchmark rate.

‘We are doing thorough testing on Kesonia including tests with our core banking and related systems that use Kesonia. We will avail Kesonia for use by our customers when we conclude the systems work,’ said Yusuf Omari, Absa’s chief finance officer.

Banks had the option of using Kesonia or CBR as their reference rate under the new risk-based pricing model. Co-operative Bank of Kenya and its subsidiary Kingdom Bank are the only ones who have notified the public of adopting Kesonia.

The Kenyan banks had rejected the use of CBR in April, arguing that it was equivalent to reintroducing interest rate capping because CBR is not market driven but set in a boardroom by the CBK’s monetary policy committee.

‘By choosing to use CBR, a bank allows itself time to learn and accommodate system upgrades required before Kesonia use,’ said Kenya Bankers Association chief executive Raimond Molenje.

‘The industry remains committed to ensuring that pricing of credit always reflects market conditions and economic fundamentals,’ he added.

Insiders in the industry said the banks were reluctant to use Kesonia as it was volatile indicating they would have to review lending rates regularly. Such reviews need to be authorized by the CBK and communicated to the customers before they take effect.

Banks had earlier insisted on the use of the interbank rate arguing it captured market dynamics unlike the CBR.

‘KBA does not support the CBK proposal in its entirety. By rejecting the interbank rate as a preferred unified base rate and proposing the CBR, the CBK will not operationalize the policy decision after setting the CBR,’ Mr Molenje had argued in a memo rejecting use of CBR.

CBK has been publishing Kesonia on its website as it prepares the market to use it as the benchmark rate. Kesonia is currently at 9.25 percent equaling the CBR which was set at 9.25 percent in MPC’s October meeting.

‘We continue to engage with CBK to ensure the transition is smooth and does not inconvenience customers while also observing all relevant laws governing the credit market,’ said Mr Molenje.

Banks are expected to transition loans issued before December 1 to the new loan pricing model by February 28, 2026.

Credit Bank is eying Sh4.5 billion fresh capital through a private placement, in the race to comply with the new capital rules that require commercial lenders to have at least Sh3 billion core capital by the end of this month.

The lender, which ended September with core capital of Sh1.23 billion, now needs at least Sh1.77 billion to comply with the new law.

The legislation raised the minimum core capital requirement from Sh1 billion and provides for a gradual increase to Sh10 billion by 2029.

The bank has called an extraordinary general meeting (EGM) on December 19 for shareholders to vote on the proposal to issue up to 45 million ordinary shares to existing and new investors at a price of Sh100 each.

Ahead of the EGM, the lender has received a boost after two key shareholders -ShoreCap III LP and Sansora Group of Companies- committed to the Central Bank of Kenya (CBK) that they are going to inject into Credit Bank Sh1 billion each by the end of this month.

Letters seen by this publication show Sansora Group of Companies CEO Leon Nyachae has written to CBK director of banking supervision making the commitment.

Equator Capital Partners (ECP), the investment manager for ShoreCap III, has also made a similar commitment in writing.

‘Our board of directors has recently considered the matter and resolved to invest an additional Sh1 billion in Credit Bank PLC by 31st December 2025,’ said Mr Nyachae in the letter.

Further, Sansora sought CBK approval to allow it and its associate companies to temporarily exceed the 25 percent limit for aggregate shareholding in Credit Bank for a period of 36 months as the lender continues to scout for new investors.

ECP chief investment officer Suleiman Kiggundu said in the letter to the CBK the conditions for the Sh1 billion injection will include an additional board seat and the listing of the bank’s share on the Nairobi Securities Exchange within three years.

‘We look forward to working closely with the CBK towards finalising the underlying processes to enable the follow-on investment to be funded by a target completion date of 15th December 2025,’ said Mr Kiggundu in the letter.

Credit Bank’s cash call reflects a similar move by other lenders such as African Banking Corporation (ABC) Bank, Paramount Bank and Sidian Bank, which have turned to a rights issue to secure fresh capital for immediate and long-term compliance. This is after a change in law compelling banks to build core capital gradually up to Sh10 billion by 2029.

The Sh2 billion to be raised from the two institutional investors will lift Credit Bank’s core capital to at least Sh3.23 billion, making it compliant with the Sh3 billion minimum capital required by the end of December. This will give the lender room to look for additional capital to comply with a higher bar come the end of next year.

At the EGM, Credit Bank is also seeking approval to issue a $1.5 million (Sh194.1 million) convertible note for supplementary capital. This will have a maturity of at least five years priced at six percent annually.

The minimum core capital in the banking sector was, through the Business Laws (Amendment) Act 2024, revised upward from Sh1 billion to Sh3 billion by the end of December, Sh5 billion by the close of 2026, Sh6 billion by the end of 2027, Sh8 billion in 2028 and Sh10 billion by the close of 2029.

When many of us think back to our early years in school, we remember the simplicity of learning. A wooden desk, a battered exercise book, and the determination of a teacher who insisted that neat handwriting was a non-negotiable life skill.

In many Kenyan classrooms, those early habits shaped the way we think, write, and express ourselves. Yet, along the way, foundational learning, the bedrock of every child’s education, has started to slip through the cracks.

But the uncomfortable truth is that a child’s future still hinges on whether they can read confidently, write clearly, and express their ideas with curiosity and imagination. No tablet can replace the discipline of forming a sentence.

No smartboard can substitute the mental work of sounding out syllables.

The basics remain the anchor. Teachers are sounding the alarm. Many report that learners in upper primary and even junior secondary are struggling with reading comprehension and handwriting. Some pupils can navigate digital devices with ease yet freeze when asked to summarise a paragraph.

Others can scroll but cannot spell. These are not isolated stories, they reflect a deeper national challenge. Foundational learning is weakening at the very moment the demands of the modern world are increasing.

Today’s classrooms are evolving quickly, and teachers are working hard to balance many new expectations. With expanded curricula, emerging competencies, and growing class sizes in some areas, it has become more challenging to dedicate consistent time to the slow, steady practice that strengthens early literacy and writing.

Across the country, teachers are doing their best to support learners within the realities of their environments, often adapting creatively to ensure every child gets the attention they need.

Yet foundational learning is not simply about academics. It shapes confidence. A child who can write a clear sentence begins to believe in their ability to communicate. A child who reads widely develops curiosity and imagination.

A child encouraged to draw, colour, and create builds problem-solving skills long before encountering formal definitions of critical thinking. These are the small, everyday acts of learning that determine whether a young person later thrives in science, business, entrepreneurship, or civic life.

This is where the quiet story of simple tools comes in. Ask any Kenyan adult about their earliest memories of school and you will hear about the value placed on a basic pen, pencil, or exercise book.

The simplicity of those tools taught discipline, responsibility, and the idea that learning was something you carried with you.

Today, the story has shifted. Many learners still lack or experience limited access to essential classroom materials, especially in communities where economic pressures make it difficult for families to provide everything children need for school.

In these contexts, teachers and community groups often step in with ingenuity and resourcefulness, ensuring learners continue to participate fully.

This is not a sentimental argument romanticising the past. It is a practical one. Foundational learning improves when children have what they need to practice. Countries that outperform globally in literacy and numeracy from Singapore to Rwanda consistently invest in early learning tools, teacher support, and classroom engagement.

Kenya has made remarkable progress in expanding school enrolment, but enrolment without foundational mastery is an illusion of success.

The good news is that change is entirely within reach. Across the country, teachers are leading the way, innovating, adapting, and finding creative methods to keep foundational learning alive. Some schools have introduced morning reading circles where learners read aloud together. Others use peer-learning stations where older pupils support younger ones.

Community libraries are emerging in neighbourhoods where books were once a rarity. These efforts prove that when we prioritise the basics, learning accelerates.

The private sector has also played a meaningful role by supporting classroom materials and creative expression programs. Initiatives such as school pen donations and creative writing workshops demonstrate that partnerships can strengthen learning ecosystems, particularly in underserved communities.

These efforts are not about products, they are about opportunity. A child who finally gets their own pen or book is a child who can participate actively, not passively.

But lasting transformation requires a national rethink. Foundational learning must be treated not as a nostalgic memory, but as a strategic investment. We cannot expect young people to excel in STEM fields if they struggle with written instructions.

We cannot build a knowledge economy if reading for pleasure declines. We cannot demand innovation while neglecting the tools that cultivate imagination.

Parents also have a role to play. Reading at home, encouraging handwriting practice, and nurturing curiosity can make a significant difference.

Foundational skills are not built in school alone, they are reinforced in homes, libraries, through play, and community spaces. When a child sees adults reading or writing, it normalises the culture of learning.

Ultimately, Kenya’s future depends on whether we choose to rebuild the strong base on which all other learning rests. Strong foundational skills produce confident, articulate, creative citizens capable of navigating the demands of a rapidly changing world. This is not an education agenda, it is a national development agenda.

If we want a generation that thinks critically, communicates clearly, and competes globally, we must return to the basics with renewed urgency. The tools may be simple, but their impact is profound. A pen, a book, a teacher, and a child eager to learn, that is still where Kenya’s future begins.

Listed utility firm Kenya Power earned Sh940.6 million from the government in the year ended June 2025 for work done on the national fibre-optic rollout under the State-backed Digital Super Highway project, new disclosures show.

The payout reflects partial payment for design, supply and installation of last-mile fibre infrastructure to government institutions under a contract awarded through the ICT Authority (ICTA). Kenya Power is deploying 100,000 kilometres of fibre, riding on its electricity network to connect 53,000 public offices, schools, hospitals and agencies countrywide.

The project is estimated to cost Sh10 billion in its first phase, making it one of the largest public ICT infrastructure rollouts in recent years.

‘The Government, through ICTA, contracted the Company to implement the Last-Mile Fibre Optic Connectivity to government institutions across the country under the Digital Super Highway (DSH) Project,’ wrote Kenya Power in its latest annual report.

‘The Company’s mandate includes the design, supply, and installation of fibre infrastructure nationwide. In line with the agreed project milestones and deliverables, the Company received a reimbursement of Sh940.6 million from ICTA as at June 30, 2025.’

This amount, the power utility says, represents a partial settlement of the contract sum invoiced for works partially completed in accordance with the project agreement.

Kenya Power’s nationwide pole network gives the government a cheaper way to extend broadband compared to trenching new routes or leasing space from private carriers.

The DSH rollout is part of the State’s push to ease public access to vital services such as digital learning and telemedicine, in addition to supporting the shift to electronic government records.

It is also poised to attract data-driven businesses to towns that have historically relied on costly satellite internet.

Using existing utility infrastructure to deliver broadband is seen as an easier route for the government to speed up coverage while reducing duplication of public spending.

For Kenya Power, the deal provides a new revenue stream outside electricity sales at a time the company is under pressure to improve cash generation.

The move marks one of the firm’s most visible diversification steps as it seeks to broaden its earnings beyond a tariff-regulated electricity business.

At its inception, the President William Ruto-led Kenya Kwanza administration spelt out a plan to lay down at least 100,000 kilometres of fibre optic across the country to improve network connectivity, amid network challenges in high security-risk areas.

Also read: Kenya Power to connect public schools with internet

The project, first announced by the president a month after he assumed office in 2022, falls under the infrastructure pillar of the country’s digital transformation agenda and is aimed at boosting internet connectivity across the country and making its access stable and reliable.

‘The Government is committed to invest in the digital superhighway and the creative economy, which will be enablers of transformation, productivity and overall competitiveness,’ the president said at the time.

‘Over the next five years, the Government will ensure universal broadband availability by hastening the roll-out of connectivity throughout the country. The laying out of an additional 100,000km of the national fibre-optic network is expected to deliver this target,’ he added.

In Kenya today, an unexpected illness can be more than a medical crisis; it can become a financial catastrophe. We have heard of mothers who postponed treatment because they couldn’t afford lump-sum payments.

We have seen families scramble to raise funds while conditions of their loved one’s get worse. There have been cases of people who walked out of hospital wards, not because they were healed, but because they couldn’t bear the soaring medical bills.

It is a sobering truth that in the 21st century, access to care still depends largely on income and place of work.

Health insurance, meant to cushion families from medical shocks, remains a privilege enjoyed by a few. According to the Insurance Regulatory Authority, Kenya’s insurance penetration is about 2.4 percent of the GDP, among the lowest in Africa. Most Kenyans remain uninsured and vulnerable to the financial strain of illness.

Even so, Kenya stands at a turning point. Technology, new payment models, and partnerships are beginning to redefine what access can mean. The challenge then is to move from good intentions to workable solutions that fit how Kenyans actually live and earn.

For most Kenyans, the traditional model of paying annual premiums upfront is almost unrealistic. Most Kenyans (about 80 percent) work in the informal sector. Their earnings are irregular.

Expecting such households to pay large lump sums at once shuts them out. At Jubilee Health Insurance, we have tested smaller, more flexible installment options in the form of monthly or quarterly plans under the Lipa Pole Pole model. It is almost similar to how people budget for airtime or transport. This is based on the observation that inclusion grows when cost meets reality.

Unfortunately, even when affordable, insurance remains poorly understood. Many see it as a product for salaried professionals, not for market traders or boda riders.

A 2024 survey found that while 53 percent of Kenyans have some form of medical cover, many remain uninsured. One in three people cited cost as the main barrier. But beneath that lies a deeper trust issue.

People must believe a the policy will work when needed. That belief comes, not from advertisements, but from seeing neighbours who have used their cover and recovered. Clear communication and transparent service remain as vital as pricing.

Distance and paperwork are also becoming barriers. A farmer in Kisii or a student in Lodwar do not have to visit an office to access care. Mobile enrollment, tele-consultations, and e-pharmacy services are now present-day necessities. Kenya’s strength in mobile innovation gives it an advantage, one that we in the insurance space must use wisely.

A good health cover should be judged, not by the size of its office network, but by how fast one can enroll or seek help using a smartphone. It is also important to reiterate that no single player can deliver universal access alone. Banks can offer the channels, insurers the products, and community groups the trust.

The government has a role too, setting incentives that encourage inclusion rather than bureaucracy. When a pharmacy, an insurer, and a digital payment platform integrate seamlessly, access expands at scale.

A well-insured society is inherently more productive. When people recover faster, they return to work sooner and spend less time in financial distress. For businesses, staff health cover translates into fewer sick days and stronger morale. The economic ripple effect is wide and measurable.

But challenges remain.

Uptake is low by global standards while mistrust lingers from past inefficiencies, and much of the informal economy remains beyond formal reach. But these are even more reasons to adapt.

Our goal at Jubilee Health Insurance is to make health cover fit people’s everyday lives. That means creating products that match real needs, allowing flexible ways to pay, and working with more partners so that quality healthcare is within everyone’s reach.

For insurers, the task now is to turn that belief into policy, product, and practice. When a hospital visit becomes about healing rather than hardship, Kenya will have bridged both a financial gap and a moral one too.

Kenyan MultiChoice subscribers could lose access to 12 Warner Bros. Discovery channels from next month as the DStv and GOtv operator’s distribution agreement with the global media giant expires at the end of December.

MultiChoice says its contract with Warner Bros. ends on December 31, and negotiations for renewal have yet to yield an agreement.

‘The distribution agreement between MultiChoice and Warner Bros. Discovery is scheduled to end on December 31, 2025. While discussions between the parties continue, no agreement has been reached at this stage,’ the Johannesburg-based company said in a notice to South African customers.

Kenyan MultiChoice subscribers could lose access to 12 Warner Bros. Discovery channels from next month as the DStv and GOtv operator’s distribution agreement with the global media giant expires at the end of December.

MultiChoice says its contract with Warner Bros. ends on December 31, and negotiations for renewal have yet to yield an agreement.

‘The distribution agreement between MultiChoice and Warner Bros. Discovery is scheduled to end on December 31, 2025. While discussions between the parties continue, no agreement has been reached at this stage,’ the Johannesburg-based company said in a notice to South African customers.

Danish shipping group Maersk, which controls more than 30 percent of cargo at the Mombasa Port, has introduced an operational cost imports (OCI) fee for cargo destined for the gateway to regional markets, sparking concerns among traders who projected higher business costs.

Kenya’s largest shipping line, which handles approximately 300,000 containers annually at the Mombasa port, this week announced it will introduce the OCI fee effective December 1, 2025, to cover additional operational expenses related to container inspections.

The fee will be billed alongside freight charges and follows similar charges OCI charges introduced for other regions, such as the Central African Republic, to address operational costs.

“As part of Maersk’s ongoing commitment to maintain high service standards and reliability across our global network, we wish to inform you of the introduction of an OCI fee for shipments destined for Kenya, effective December 1, 2025 until further notice. This surcharge is being implemented to offset the additional operational expenses associated with container inspections,” the shipping firm said in an advisory to clients.

In the tariff, the shipping line will charge $18 (Sh2328.56) for a 20-foot container and $33 (Sh4269.03) for a 40-foot container, while reefers will be charged $33 (Sh4269.03) and $43 (5562.44) for 20- and 40-foot containers, respectively.

Kephis began inspecting all cargo containers, both loaded and empty, in July 2025. The move, however, was met with an uproar, as traders in crop products reported massive disruptions to their businesses owing to the inspection rule, with some cargo consignments left behind at the Mombasa Port as impatient shipping lines set sail amid delays.

According to Kephis, all shipping lines and agents since July 1 this year are required to share the manifest for both imports and exports with the department in advance to facilitate efficient inspection and compliance.

To facilitate the inspection, shipping lines and agents were required to pay Sh500 and Sh2,000 for the container and vessel inspection fee, respectively.

Traders said that they are now worried Kenya will become one of the most expensive routes to import and export goods following the introduction of the new fees.

The Shippers Council of Eastern Africa (SCEA) CEO Agayo Ogambi said the fee will affect bulk importers due to increased cost and urged the government to rethink the funding model for government agencies.

“Traders have to increase operating fees, which will be passed on to consumers to recover the new charges imposed by Kephis. Our members have expressed deep concern regarding the potential implications of this cost on the competitiveness of Kenyan imports, the overall cost of doing business, and the stability of supply chain operations,” he said.

The official also questioned whether the surcharge was reviewed and approved in accordance with Kenya’s maritime regulatory requirements.

“Despite the costs, we want to know the methodology and justification for this levy and if it met the principles of transparency, fairness, and reasonableness expected under shipping regulation frameworks. Kenya should put measures in place to protect shippers, importers, logistics operators, and the wider economy from unilateral cost introductions by shipping lines without prior consultation,” said Mr Ogambi.

The value of foreign currency denominated assets under management in unit trusts doubled to Sh71.3 billion in the year to September 2025 from Sh34.9 billion a year earlier as investors hedged against potential economic shocks by diversifying their portfolios from shilling assets.

The sharp growth was also driven by the larger number of funds that have started offering dollar-linked unit trusts, which offer investors access to offshore bonds and equities assets.

By the end of September, the Capital Markets Authority (CMA) had approved 32 foreign currency funds, up from 25 a year earlier, cutting across the different unit trust options including money market funds, fixed income funds and Shariah funds.

The largest foreign currency fund in the period was the US dollar Sanlam fixed income fund with Sh27.14 billion in assets under management, followed by Standard Investment Bank’s Mansa X special dollar fund at Sh12.69 billion, NCBA dollar fixed income fund at Sh6.99 billion and CIC’s dollar money market fund at Sh4.26 billion.

‘Foreign currency denominated funds include dollar, euro and South African rand have continued to grow both in popularity and value in terms of assets under management,’ said the CMA in its quarterly collective investment schemes report for the period ending September 2025.

Although the shilling has stabilised at the 129 level against the dollar for the past 16 months, investors remain alive to the potential volatility in the exchange rate affecting the value of their assets, hence the need to diversify the currency exposure.

Before the current stable run, the local currency had depreciated from Sh109 to an all-time low of Sh161 to the dollar over a period of three years until February 2024.

This depreciation sparked an interest in hard currencies and a rush to dollar assets, both from those hedging against future forex losses and those looking for capital gains from their dollar assets.

Dollar-denominated unit trusts that invest offshore also offer investors an easy avenue to holding such assets without the hassle of opening trading accounts in foreign jurisdictions.

Overall, the CMA has reported a rising diversification away from the traditional money market, equities, balanced and fixed income funds by investors, highlighted by the growth in foreign currency and special funds in the last two years.

The assets under special funds climbed to Sh137.8 billion in September, up from Sh70.4 billion in December 2024, underpinning the overall jump in unit trust assets under management by Sh290.4 billion to a record high of Sh679.6 billion in the period.

In the nine-month period, assets under management in fixed income funds rose from Sh66.8 billion to Sh136.8 billion, while those in equity funds assets rose to Sh3.3 billion from Sh2.5 billion. Balanced fund assets meanwhile contracted from Sh2.22 billion to Sh1.7 billion.

The CMA attributed the sharp growth in assets under management and investor numbers to concerted marketing efforts through various digital channels by unit trust providers, whose numbers have also gone up as the regulator continues to licence more players in the industry.

By the end of September, there were 55 approved collective investment schemes -41 of which were active- offering 234 funds.