Category: Business Daily

The banking industry is lobbying the government to cut pay-as-you-earn (Paye) tax rates by five percentage points across all income bands, arguing that the move would restore workers’ purchasing power, support economic growth and strengthen tax revenues.

In a proposal submitted to the Treasury, the Kenya Bankers Association (KBA) said the uniform reduction should be accompanied by a cap on the top Paye rate at 30 percent, in line with the National Tax Policy approved in 2023, which states that personal income tax rates should not exceed the corporate tax rate.

This comes a day after Treasury Cabinet Secretary John Mbadi revealed a plan to zero-rate Paye for workers earning up to Sh30,000 a month, saying it would provide timely relief as households grapple with rising living costs.

Bankers, however, argued that limiting relief to low-income earners would not go far enough to address the growing tax burden faced by workers and employers across the board.

The lobby group pointed to the ongoing phased increase in National Social Security Fund (NSSF) contributions, which will see employers and employees contribute up to six percent of pay by February 2026.

It said the cumulative effect of higher statutory deductions risks squeezing disposable incomes, particularly for workers and firms without occupational pension schemes.

‘Without complementary tax relief measures through Paye for all workers, the burden on both employees and employers will continue to rise,’ the bankers said.

Earnings of up to Sh10,000 a month are subject to 10 percent income tax, while the next Sh8,333 per month, or Sh100,000 annually, is subject to 25 percent Paye. Workers earning up to Sh467,000 a month pay 30 percent; those earning up to 767,000 pay 32.5 percent and the rest pay 35 percent.

Under the proposal, the five percent cut would apply to all existing Paye bands, with the highest rate capped at 30 percent.

The industry said this approach would increase disposable income, boost household consumption and stimulate growth in productive sectors such as manufacturing and agriculture.

Banks also argued that easing the tax burden on labour would broaden the tax base and deliver more resilient government revenues over time, through higher collections from value-added tax, excise duty and corporate income tax, rather than continued heavy reliance on taxing wages.

Bankers further argued that the tax cut could help reinvigorate economic activity ahead of the next general election, a period that has historically been marked by business slowdowns, weaker investment and softer revenue performance.

Pension fund returns declined to 24.8 percent in the year to December 2025 from 28.8 percent in 2024 as lower returns from fixed income assets weighed down improved yields from equities and offshore investments.

Analysis by pension funds administrator Zamara shows that the average return from fixed income assets stood at 19.7 percent in the year, down from 25.2 percent in 2024, with equities returns rising to 63.4 percent from 51.6 percent, and offshore assets at 14.5 percent compared to a negative 0.2 percent in 2024.

The returns comfortably beat the average annual inflation of 4.07 percent in 2025, marking the second year in a row that pension savings were protected from erosion in real terms. In 2024, inflation averaged 4.52 percent.

Zamara sampled 406 schemes with Sh1.51 trillion in assets under management (excluding property) when analysing the returns from the sector.

‘This performance drop was attributed to lower performance by the fixed income asset class,’ said Zamara in its analysis.

In the fixed income segment, interest rates on government securities came down last year in line with the Central Bank of Kenya (CBK) cutting its benchmark rate from 11.25 percent to nine percent between January and December.

Treasury bonds issued last year -the majority of them being reopenings from past auctions-paid investors annual interest of between 11.67 percent and 14.63 percent.

In 2024, the returns from bonds peaked at 18.46 percent, which was available on an 8.5-year infrastructure bond sold in February 2024.

As interest rates fell, however, bond prices in the secondary market at the Nairobi Securities Exchange (NSE) rose, handing the pension funds some capital gains on their holdings.

Bond yields and prices at the secondary market feature an inverse relationship where a rise in one signals a decline in the other.

Treasury bill interest rates fell to a range of 7.7 percent to 9.23 percent in December 2025, from 9.8 percent to 11.4 percent at the beginning of the year.

For funds invested in fixed deposits in banks, interest rates declined progressively through the year, settling at 7.28 percent in November from 10.05 percent in January.

In the equities market, the funds enjoyed capital gains on their portfolios as the bourse added Sh1 trillion or 51.8 percent to investor wealth to reach Sh2.94 trillion.

Due to their long investment horizon and lower risk appetite, pension funds usually invest in long-term bonds, which ensure security of investment while generating returns of more than 10 percent in most years.

In the equities market, they mainly invest in large blue-chip stocks that offer long-term price stability and regular dividend distribution. Such forms also have ample liquidity that allows for large ticket purchases for the funds.

In 2025, the NSE’s top four firms by market capitalisation-Safaricom, Equity Group, KCB Group, EABL and Co-operative Bank of Kenya-recorded price gains of between 34 and 65 percent.

Bonds and listed shares account for 62.6 percent of the pension sector’s Sh2.53 trillion total assets in June 2025, as per the latest data from the Retirement Benefits Authority, with guaranteed funds the other major holding at 19.6 percent.

In the year to June 2025, the total assets grew by 27.9 percent or Sh552 billion, partly boosted by higher contributions to the State-controlled National Social Security Fund.

From February 17 to March 3, the Chinese will mark the most significant celebration in their culture, the Chinese New Year. During this time, manufacturers will shut down operations, affecting the supply of commonly sourced goods from the market. The production slowdown is expected to persist for up to a month after the holidays.

Factories, avoiding inefficient low-capacity operations, typically resume full production only once bulk orders arrive. The slow return of workers, many of whom travel to their villages, causes additional delays.

With more than 20 percent of its imports coming from China, Kenya is often highly vulnerable to Chinese holiday-related supply chain slowdowns. For this reason, it is always prudent for Kenyan businesses that import goods from China, to build up inventory buffers for January-March, so as to avoid operational disruptions and stock-outs.

Shutdown and reopening dates vary for different manufacturers. Importers need to confirm the specific dates with their suppliers and ensure goods leave the factory at least 10 days before the official holiday.

Pre-booking container space at least two to four weeks before the shutdown, can also help businesses to avoid paying higher rates for last-minute shipping. Factor in two to three weeks of extra lead time for shipments, as backlogs are common when factories reopen.

Most importers from Kenya do not raise their orders directly with the manufacturers in China.

Instead, they raise orders through retailers who display goods from various factories as samples in their shops. Ordinarily, most of these suppliers, who act as intermediaries between the importers and the manufacturers, will ask for a deposit from the importer in Kenya, which they will use to raise an order with the manufacturer, then ask for the balance once the order is ready.

However, during the Chinese New Year, suppliers will ask importers to make the full payment upfront, as contractual obligations forbid them from carrying outstanding credit balances into the New Year.

For an importer based in Kenya, raising the full payment upfront on short notice can be an uphill task. Partnering up with reputable companies that provide cargo financing, can be a solution for this challenge.

Look for logistics companies that can agree to pay your supplier in China, use your cargo as the collateral, then allow you to collect your goods from their warehouse, once you are ready to pay what you owe them.

Absa Bank Kenya’s high-performance talent development pipeline has seen it earn recognition as a top employer in the country from year to year.

The lender was certified as a top employer in 2025 for the fifth consecutive year by the Top Employers Institute, an Amsterdam-based global authority on human resource strategies.

According to the Top Employers Institute, the certification is awarded to organisations based on the participation and results of the HR Best Practices Survey, which covers six domains on 20 topics, including people, strategy, work, environment, talent acquisition, learning, diversity and inclusion, and well-being.

‘In 2025, Top Employers Institute certified more than 2,400 organisations in 125 countries/regions. These certified Top Employers positively impact the lives of over 14 million employees globally,’ the Top Employers Institute said.

The bank says it has built a people ecosystem that deliberately moves beyond traditional and linear career models as it seeks to differentiate itself as a top employer in an ever-changing financial sector.

Absa Bank Kenya has also built specialist capability academies to equip employees, particularly early and mid-career talent, with in-demand skills which span leadership, digital fluency, risk, data and customer experience.

The bank earned maximum points in the development scorecard, which tracks employee performance, learning and career growth.

Equally, Absa scored high on other top-employer metrics, including attracting, engaging, steering, shaping and uniting talent.

Absa Bank Kenya managed a score of 94.42 percent putting it only second to Mauritius among the bank’s subsidiaries to beat comparable markets, including South Africa, Zambia, Ghana and Botswana.

The scores link to the bank’s strategy, including building a competitive advantage through culture, distributed leadership organised around clients, becoming a home for the continent’s leading talent, supporting and enabling colleagues and creating a digitally empowered business.

African banks are increasingly competing on productivity, trust and talent, as pressure mounts on returns, costs and digital capabilities.

Recent findings by McKinsey on African banks revealed that declining return on equity (ROE) and rising competition have forced lenders to unlock productivity through better deployment of people and capabilities.

The findings are corroborated by reporting by the Africa Report, which has pointed to a growing war for digital and risk talent across the sector.

Besides the Top Employer certification, Absa Bank Kenya was named the top bank in Kenya and received Global Finance’s award for Best Bank for Sustainability transition.

Global recognitions

Beyond this milestone, Absa has earned additional global and local recognition through key partnerships and awards.

For instance, through its collaboration with the International Labour Organisation (ILO), Absa was featured in the ILO Global Disability Network newsletter, showcasing its inclusion initiatives on a global platform.

The bank was also recognised by the International Finance Corporation (IFC) for championing gender-inclusive sourcing, named among the Best Workplaces in Health and Safety Preparedness at the Occupational Safety and Health Awards 2025.

Absa was also honoured at the PRSK Awards of Excellence for Internal Communication Campaign of the Year for the Absa ‘Let’s Move Challenge’, centred on colleague wellness and engagement.

The lender’s accolades as a top employer have also emerged from a strategic and data-led employee value proposition (EVP), which is based on understanding what employees value at different moments in their careers.

One of the human resources functions at the bank is sophisticated analytics and employee insights to diagnose experience gaps, identify capability risks and design targeted interventions.

Absa says that this enables precision in talent decisions rather than creating one-size-fits-all solutions.

The bank seen a high number of employees choosing to return to the company after leaving, an aspect it terms as ‘the boomerang employee effect’.

According to the bank, the phenomenon reflects sustained cultural credibility, meaningful work and a leadership environment where employees actively seek to rejoin after external exposure.

Employee well-being and inclusion also form part of Absa’s human capital differentiation.

Under its integrated wellness framework, the bank adopts a holistic approach that addresses mental, physical and financial well-being, where the lender recognises that a sustained employee performance requires psychological safety, energy and financial confidence.

Gender equity

Absa has also championed for women in the workplace and has ranked among the top organisations worldwide for gender equity.

Gender equity, according to the bank, transcends equal pay to cover leadership representation, career acceleration opportunities and inclusive policy design.

The bank was ranked 66th globally in the most recent Forbes World’s Top Companies for 2025.

Absa is also reading itself for the future of work by training leaders on how best to manage hybrid and remote teams, ensuring productivity, trust and engagement in a flexible work environment.

‘Absa’s human capital strategy is widely regarded as a benchmark in the financial services industry. Its distinction lies not in isolated HR initiatives, but in a coherent, data-led people system that integrates performance, purpose, wellbeing, and inclusion at scale,’ Absa said.

‘This approach has earned Absa consistent Top Employer recognition, while delivering people outcomes that outperform industry benchmarks, particularly in leadership effectiveness, diversity and inclusion, and employee engagement. At its core, Absa treats human capital as a strategic growth lever. This philosophy is visible in how the bank designs careers, listens to employees, develops future-fit skills, and aligns people strategy.’

Absa run a model dubbed ‘Kaya’, a word drawn from the Mijikenda Community to signify 10 or smaller teams.

The Kaya is a culture vehicle which aims to foster cross-functional teams dedicated to enhancing collaboration, connection and cohesion across the organisation.

Absa Bank Kenya says that it continues to strengthen how it listens to its people, introducing more robust benchmarking and analytics that provide deeper insight into trust and engagement across the organisation.

Chief Executive Officer Abdi Mohamed says the strategy has enabled more focused interventions, including supporting improvements across the employee lifecycle and reinforcing a culture of openness and accountability.

‘Aligning with our group strategy, we continue to strive to be customer-obsessed, equipping our employees to deliver excellence for our customers. Over the years, we have been deliberate about strengthening our employee value proposition, focusing on the quality of work people do, how they are led, how they learn and grow, and how we support their wellbeing,’ he said.

Chief People Officer at Absa Bank Kenya, Mumbi Kahindo, highlights a revolution of the workplace, which has resulted in the redefinition of relations between employees and their employers.

‘The way people think about work is fundamentally changing, and this shift is redefining the relationship between employers and employees. Being recognised for the fifth consecutive year gives us a clear line of sight into how our culture and people practices have evolved over time. It’s a true testament to our collective effort, teamwork, hard work, and resilience,’ she said.

Absa Bank Kenya had over 2,000 employees at the end of last year who helped it oversee its banking operations, which span 38 counties with 89 branches and 189 ATMS.

The employees enable the lender to be one of Kenya’s largest financial institutions, providing personal, business and institutional banking, bancassurance, FX, wealth and investment and advisory solutions.

Customers with existing loans will not pay origination/processing fees in the transition to the new risk-based credit pricing model (RBPCM) starting in March.

Lenders have notified customers with facilities existing before December 1, 2025, that the loans will not attract fees and charges applicable to new facilities, including origination, processing, negotiation and commitment fees.

All loans existing before December 1, 2025, are currently being transitioned to the new pricing model ahead of the February 28 deadline, after which all facilities will fall under the same costing criteria.

Commercial banks have notified customers of the changes as they require clients with existing loans to sign off on new terms.

Kenya Bankers Association (KBA), the banking industry lobby, says fees and charges are excluded from existing loans, having been previously paid at the disbursement of the facilities.

‘What this means is that these fees and charges apply when you are taking a new loan or seeking a top-up. The fees are usually one-off, and hence they will not be costs to existing customers as we transition to the new pricing model,’ said Raimond Molenje, KBA Chief Executive.

‘The notices are to assure customers that they would not be subjected to fees that were already paid for an existing facility.’

Banks, including DTB, Co-operative, Equity, Kingdom, the National Bank of Kenya (NBK) and SBM, have served notices to customers ahead of the February 28 deadline, which marks the full transition into the new risk-based pricing framework.

Customer loans attract at least 10 distinctive charges that are over and above the interest rate, which add to the total cost of credit.

According to the total cost of credit website, bank charges include negotiation or appraisal fees, annual maintenance fees, a mobile banking notification charge and miscellaneous charges.

Specific types of loans, such as mortgages and motor vehicle loans, attract external charges, including credit life insurance, legal fees, stamp duty, valuation fees, property insurance fees, and brokerage fees.

‘The total cost of credit equals the Central Bank rate + K (premium) plus fees and charges, where fees and charges include origination, processing, negotiation and commitment fees as applicable to new facilities issued from December 1, 2025,’ KCB and Credit Bank told customers in separate notices last week.

‘Existing customers will not be subjected to the fees and charges component of the revised RBCPM, which applies only to new facilities.’

Banks have been transitioning to the new risk-based pricing model since last December, and are basing fresh costs on a new industry benchmark anchored on either the Kenya Shilling Overnight Interbank Average (Kesonia), formerly the interbank rate or the Central Bank Rate (CBR).

The total cost of credit is arrived at by adding a premium labelled K, fees and charges to the chosen benchmark rate. Most banks have adopted the CBR as their new primary benchmark, including KCB, DTB, Equity, Credit Bank, NBK and SBM.

Only a handful of lenders have adopted Kesonia, including Co-op and Kingdom, while the remainder of banks are borrowing from both benchmarks.

The new risk-based pricing model envisions creating transparency in the costing of loans while also closely mimicking the direction of interest rates in the market as signalled by the Central Bank of Kenya (CBK) through monetary policy.

Pricing framework

Average commercial bank loan rates fell gradually through 2025 to December, ahead of the transition to the new pricing framework, with the mean rate falling to 14.82 percent from 16.9 percent a year prior.

Absa Bank Kenya, Citibank NA Kenya and the Middle East Bank made the largest cuts in borrowing costs in 2025, as most banks extended relief to borrowers.

Thirty-four out of 38 banks reduced their loan costs in the review period, while four small commercial banks bucked the trend, raising interest cost on loans, among them: UBA Kenya, Kingdom Bank, Consolidated Bank of Kenya and DIB Bank Kenya.

All banks are required to disclose lending costs to clients on their website and on CBK’s total cost of credit website to facilitate transparency.

Banks are yet to update new loan costs and have attributed the delayed updates to the ongoing transition in pricing criteria.

‘We paused updating the website to be able to factor in the new risk-based credit pricing model and are working with a consultant to be able to make the necessary changes,’ said MrMolenje.

Occupancy levels in Nairobi’s prime offices are projected to climb further in 2026, building on momentum from last year and driven by the limited supply of such units.

The prime category refers to Grade A offices, which are in key business locations, feature high-quality contemporary designs, and are equipped with cutting-edge facilities and amenities.

Real estate management firm Knight Frank said the expected rise in occupancy is likely to trigger a slight increase in rents in key locations such as Westlands and Upper Hill.

Over the years, these areas have been primarily targeted by developers for new projects to complement the Nairobi Central Business District, where accessibility and the supply of Grade A offices have been limited.

‘In 2026, prime office occupancy is expected to continue rising due to limited availability of high-quality stock, placing mild upward pressure on rents in key nodes such as Westlands and Upper Hill, although the broader market is likely to remain competitive and tenant-friendly,’ the firm said.

An increase in prime office occupancy would build on momentum from 2025, when occupancy rates in Nairobi climbed from 77.71 percent in June to 81.58 percent by December, marking a 4.98 percent increase.

‘This absorption was largely fuelled by strong tenant uptake in the high-quality developments completed in late 2024, such as Purple Tower and The Mandrake, underscoring a persistent ‘flight to quality’ Knight Frank said.

‘Rents for prime space remained stable at $1.20 (Sh154.82) per square foot per month, indicating a market finding equilibrium between improved demand and available stock,’ it added.

A Nairobi restaurant has lost a bid to overturn a tax assessment after the High Court ruled that the law cannot assist a taxpayer, who files nil returns while failing to maintain statutory records to explain cash flows through its bank accounts.

The court dismissed an appeal by Avery Lounge Limited against the Commissioner of Domestic Taxes and upheld the Kenya Revenue Authority’s (KRA) use of bank deposits to reconstruct income.

The decision sets a precedent for businesses that declare zero income while actively operating, yet fail to produce proper accounting records when challenged.

“A court cannot aid a taxpayer who, having failed to keep statutory records, seeks to rely on generalities and summaries to defeat a specific, evidence-based assessment,” the judge ruled.

Avery Lounge operates a restaurant and lounge along Nairobi’s Eastern Bypass. Incorporated in June 2019, its primary business involves hospitality services-a sector the court noted is “known for high volumes of cash and electronic transactions.”

Despite registering for income tax, value-added tax and pay-as-you-earn, the company either filed nil returns or failed to submit any returns for years, earning classification as a ‘nil-filer’ or ‘non-filer.’

This stance contradicted reality following investigations. During a November 2021 inspection, KRA officers found Avery fully operational, serving customers and presumably generating revenue. The visit confirmed suspicions raised by KRA’s compliance systems: the business was trading while declaring no income.

KRA expanded its investigation, obtaining third-party records from banks and suppliers, which revealed substantial deposits flowing through the restaurant’s accounts.

With no credible books of account provided, the Commissioner issued default assessments on May 5, 2023, covering 2018 to 2021, using bank deposit analysis-a method treating gross deposits as taxable turnover unless proven otherwise.

Avery objected, arguing that not all deposits constituted income, citing loans and director advances, and accused KRA of disregarding business expenses.

The tax authority demanded supporting documents, including ledgers, invoices, audited accounts, loan agreements and M-Pesa statements.

However, Avery furnished only partial bank statements and a summary, leading KRA to reject its objection. The Tax Appeals Tribunal upheld the assessment in a June 2024 ruling, prompting Avery’s High Court appeal.

Central to the appeal was the burden of proof. The court affirmed that Section 56 of the Tax Procedures Act places this burden on taxpayers to disprove KRA’s assessments.

While credible evidence can shift this burden, Avery failed to meet the threshold. The company relied solely on bank statements and self-prepared summaries, which the court deemed insufficient.

“Primary evidence consists of source documents-invoices, receipts, loan agreements, and transaction ledgers-that classify each entry at the time it occurs,” the judge clarified. “A bank statement records fund movements, not their nature.”

Without documentation distinguishing deposits as sales, loans or refunds, Avery’s claims remained unsubstantiated.

The court also validated KRA’s use of Section 29 of the Tax Procedures Act, which permits assessments based on the “best of judgment” when taxpayers fail to maintain records.

“Assessing a nil-filer based on bank deposits is a reasonable exercise of administrative power,” the court ruled.

“To hold that the Commissioner cannot tax gross deposits in such a scenario would be to incentivise the destruction of records and the filing of nil returns,” it added.

The judgment emphasised that this power does not authorise arbitrary estimates but allows KRA to act on available evidence when taxpayers neglect record-keeping.

Bank deposit analysis, the court noted, is a legitimate tool-particularly against nil-filers visibly operating businesses-since it presumes unexplained deposits are income unless rebutted. Avery failed to isolate and prove non-income deposits.

Regarding expenses, the court upheld Section 15 of the Income Tax Act, permitting deductions only for costs “wholly and exclusively” tied to income generation, with taxpayers bearing the proof burden. Avery’s lack of documentation undermined its expense claims.

Finally, the court dismissed Avery’s argument that its rights to fair administrative action and hearing were violated, noting the company received notices, contested assessments, participated in tribunal proceedings, and was repeatedly asked for documents.

Dissatisfaction with the outcome, the judge concluded, does not equate to procedural unfairness.

The court potentially backed KRA’s authority to combat tax evasion through rigorous scrutiny of nil-filers, underscoring taxpayers’ obligation to maintain accurate records or face assessments based on available financial evidence.

Italy is best known for its reds, yet it is its whites that are opening doors in emerging markets.

Varieties such as Pinot Grigio and Greco di Tufo from Campania are gaining ground in Kenya, where consumers are shifting from the familiar labels towards wines that pair easily with local cuisine and social dining.

This growing interest was evident at a recent Italian wine roadshow in Nairobi, organised by Gambero Rosso, which brought together 160 wines from 44 producers across 11 famed wine-growing regions.

The showcase brought a wide range of importers, distributors and wine professionals who were keen to explore opportunities in what many now regard as an essential African market for wine culture and commerce.

What’s behind the Italian rise?

Speaking at the event, Italian Ambassador to Kenya, Vincenzo Del Monaco described wine as a powerful connector between cultures and economies, which extends its relevance beyond the bottle.

‘Wine is a gateway to deeper engagement and a medium for intercultural exchanges and strengthening bonds. It embodies culture, territory and national identity.

“This showcase highlights the quality and diversity of Italian wines while reinforcing the strong economic and diplomatic ties between Italy and Kenya, a priority partner for Italy across business, science, culture and investment,’ he said.

Italy’s interest in Kenya sits within a broader trade relationship, with the country exporting about pound 400 million worth of goods to Kenya annually.

The ambassador adds that this has helped niche sectors such as wine to gain traction through diplomacy, cultural exchange and targeted trade promotion.

Kenya’s wine imports are still reigned by traditional suppliers, even though Italian producers are expanding their footprint.

According to international trade data for 2023, Kenya imported wine valued at about $22.5 million globally, with South Africa accounting for 48 percent of that value. France followed with a 17 percent share, while Italy ranked third at 11 percent, ahead of other suppliers like Spain, Argentina and Chile.

The numbers point to South Africa’s continued dominance that has often been backed by their long-established distribution networks, competitive pricing and strong presence in retail and hospitality.

The numbers also reveal a market transition where Italy’s rising share shows a consumer base that is becoming more informed, more travelled and more willing to explore wines beyond the familiar origins.

Victoria Munywoki, a wine consultant said the expansion of the roadshow reflects the changes in consumer behaviour and demand.

‘This event has grown alongside Kenya’s wine scene, with recorded growth of 33 percent in 2024 and 44 percent in 2025 of Italian wine imports, driven primarily by a more informed and curious consumer base shaped by travel and cultural exposure,’ she said.

She added that Kenyan consumers are seeking wines that reflect their lifestyle choices rather than status, a trend that favours Italian styles known for their balance, food compatibility and regional identity.

This growing consumer curiosity is also supported by the growth of premium restaurants and social venues in Nairobi and other urban centres.

Several Italian restaurants and wine bars like Mediterraneo Ristorante, La Terrazza and Lucca have become ambassadors for Italian wine, by familiarising diners with regional styles such as Prosecco, Chianti and Pinot Grigio.

According to VinPodium co-founder Mark Artivor, Kenya is now evolving beyond an entry-level wine market into a regional influencer with growing relevance for East and Central Africa.

‘We are seeing a steady expansion of Italian wine varieties beyond restaurants and lounges and into the retail and grocery spaces, blending the huge Italian wine heritage with local cuisine and Kenyan consumption patterns,’ he said.

That expansion into retail has placed Italian wines in more direct competition with South African producers, whose dominance has been on the volume-driven categories that appeal to mass markets.

South African wines continue to benefit from proximity, pricing and rooted distributor relationships, allowing them to maintain leadership even as the premium consumption grows.

Consequently, France, holds in the higher-end segments. Although their overall market share is smaller than South Africa’s, French wines command prestige, particularly in the sparkling and fine wine categories.

In 2023, France contributed to about $1.88 million of the country’s sparkling wine imports, compared with Italy’s $342,000 and South Africa’s at about $303,000. Italy’s strategy, producers say, lies in offering breadth and versatility, particularly wines that align with food and informal dining.

Among the Italian distributors testing the Kenyan market is Modestino Argenziano of the Luciano Ercolino brand, who said Kenya’s evolving wine culture and openness to experimentation made it a natural choice for expansion.

‘I believe in the Kenyan market because consumers are becoming more open to trying new wines, especially European wines. There is a new generation that is curious, informed and interested in understanding wine and how it fits into everyday life,’ he said.

Mr Argenziano adds that Kenyan consumers differ from European drinkers, particularly in their wine-drinking habits.

‘What I have learnt is that, unlike in Europe, wine consumption here follows different cultural patterns. People are still discovering how wine fits into meals and social occasions, and that creates space for education and engagement,’ he said.

He points out that Italian wines have shown strong compatibility with the Kenyan cuisine following local food-pairing trials conducted in Nairobi, helping consumers to better understand how wine complements food.

According to industry projections, Kenya’s wine market including all imported wine categories is expected to generate revenues of about $89.8 million in 2025, with further growth anticipated through the decade.

‘Kenyan food works very well with Italian wine in many cases. We have already done some food-matching tests here in Nairobi and the results have been very positive. People are beginning to understand what wine and food pairing really means,’ he said.

On specific pairings, Mr Argenziano said lighter Italian styles work well with seafood, while structured reds suit richer meat dishes.

‘Our Piano Legrade pairs very well with grilled fish such as salmon, while our Taurasi Raya Magra matches beautifully with roasted lamb,’ he said.

At the roadshow, Luciano Ercolino showcased a premium portfolio that included Piano di Avellino, Legrade and Greco di Tufo white wines, alongside Taurasi red wine, which Mr Argenziano described as the producer’s flagship offerings.

‘This is our top premium selection for this tasting. The white wines have strong ageing potential, while the Taurasi red wines are matured for at least three to four years in wood casks, which gives them depth and structure,’ he said.

From an online post, a commentator asked an intriguing question: ‘If the African Union (AU) cannot create a single currency, a unified military, or a common passport, then what exactly is this union about?’.

The comment section went wild, with some people saying that AU no longer serves the interest of the African people, but rather the interests of the West and individual nations with greedy interests in Africa’s resources. Some even said jokingly that it should be renamed ‘Western Union’.

On a serious note, however, how has France managed to maintain an economic grip on over 14 African states through its CFA Franc system, yet the continent is unable to create its own single currency regime?

Why does Africa seem to be comfortable with global powers establishing their military bases throughout its territories yet doesn’t seem interested in establishing its own unified military? Why does the idea of an open borders scare our leaders, driving them to hide under sovereignty?

These questions interrogate AU’s relevance in the ensuing geopolitics. No doubt, the AU is still relevant as it still speaks on behalf of Africa on global platforms as a symbol of the continent’s unity. But the unease surrounding it is justified because symbolism is no longer enough.

In a continent grappling with persistent conflict, economic fragmentation, and democratic reversals, institutions are judged not by their presence, but by their impact.

From the chat, and several other discussion groups on social media, most Africans are unhappy with the performance of the African Union so far. To many, the organisation is out of touch with reality and they are now calling for an immediate reset.

To them, AU is a club of cabals, whose main achievements have been safeguarding fellow felons.

One commentator said, ‘AU’s main job is to congratulate dictators who kill their citizens to retain power through rigged elections.’

Another said, ‘AU is a bunch of atrophied rulers dancing on the graves of their citizens, looting resources from their people to stash in foreign countries.’ These views may sound harsh, but are a good measure of how people perceive the organisation across the continent.

The African Union, which was established in July 2002 to succeed the Organisation of African Unity, was born out of an ambitious vision of uniting the continent toward self-reliance by driving economic integration, enhancing peace and security, prompting good governance and, representing the continent on the global stage – following the end of colonialism.

Over time, however, the gap between this vision and the reality on the ground has widened. AU appears helpless to address growing conflicts across the continent – from unrelenting coups to shambolic elections to external aggressions.

This chronic weakness has slowly eroded public confidence in the organisation and as such, AU is being seen as a forum for speeches rather than solutions – just as one commentator puts it, ‘AU has turned into a farce talk shop that cannot back (sic) or bite.’

The general feeling on the ground is that AU is stagnant and has nothing much to show for the 60+ years of its existence (from the times of OAU). It’s also viewed as toothless and subservient to the whims of its ‘masters’.

Some commentators even called for its dissolution and the formation of a new body that would serve the interests of the continent and its people.

This sounds like a no-confidence vote. To regain favour and remain a force for continental good, AU must undertake critical reforms, enhance accountability, and show political courage as a matter of urgency. Without these, it may endure in form while fading in substance.

The question is not whether Africa needs the AU, but whether the AU is willing and ready to become the institution Africa needs – one that is bold enough to initiate a daring move towards a common market, a single currency, a unified military, and a common passport regime.

Kenya’s private sector activity grew at the slowest pace in four months in January, weighed down by higher prices of raw materials as well as elevated import taxes, new findings of a monthly survey indicate.

The Stanbic Kenya Purchasing Managers Index (PMI) -a gauge for monthly private sector activity such as output, new orders, and employment- slowed to 51.9 last month, down from 53.7 in December last year.

A reading above 50 signals expansion activity, while a reading below denotes a contraction.

‘For the fifth month in a row, the headline PMI was above the 50.0 mark, signalling an upturn in business conditions. However, the improvement was less pronounced compared to those seen at the end of last year, shown by the index falling from 53.7 in December to 51.9 in January,’ Stanbic said.

‘Kenyan firms reported a solid increase in operating expenses in January. Prices for raw materials were often quoted as rising, whilst higher tax charges, import fees, and technology costs were also noted.’

Despite the slowdown, the report shows that employment growth within the private sector was sustained during the month, marking the 12th successive month of jobs growth and the longest phase of expansion established by the survey since 2019.

According to the monthly release, firms mentioned hiring casual workers due to an increase in workloads, amid signs that a slowdown in new business growth had tempered these efforts.

An increase in output across private businesses was observed for the fifth straight month, albeit the rate of growth decelerated further from last November’s multi-year high.

The survey noted that the output gains were linked to stronger customer referrals, marketing, and improved credit access.

Companies also registered an upturn in their new orders as 2026 commenced, stretching the run of growth that kicked off last September.

Like output, however, the rate of increase softened to the weakest in four months.

‘New orders were often supported by stronger client outreach, improved referrals, firms’ competitiveness and shifts to digitisation, according to respondents,’ noted Stanbic.

The PMI report, based on feedback from about 400 panelists drawn from agriculture, manufacturing, construction, wholesale and retail, and services, shows that enhanced competition in January made firms restrain price increases, with headline inflation easing to 4.4 percent, down from 4.5 percent in December.

‘Higher input prices, purchase costs, staff costs, and output were likely due to higher taxes and rising technology costs. That said, increased competition made firms restrain price increases, as corroborated by headline inflation in January easing to 4.4 percent year-on-year,’ Christopher Legilisho, chief economist for South African-based Standard Bank, the parent firm of Stanbic Bank, said in the January PMI report.

Kenya’s headline inflation has remained below five percent since mid-2025, supported by a stable shilling and easing imported inflation, particularly for fuel and manufactured goods.

The majority of firms surveyed in the PMI do not expect to expand businesses in the next 12 months, with only 22 percent of surveyed firms expressing positive expectations, as the remainder stayed neutral.

The strongest optimism was seen in the manufacturing and construction segments.