Category: Business Daily

A few years ago, sustainability was largely confined to policy statements and long-term aspirations. Today, it has moved into boardrooms, underwriting committees and investment decisions.

For Africa’s insurance industry, this shift has been accelerated by lived experience; droughts that disrupt livelihoods, floods that damage infrastructure, rising energy needs and growing pressure on public finances. In this context, sustainability is now a strategic necessity.

This urgency is unfolding against a rapidly changing global backdrop. The international development landscape is being reshaped by fiscal pressures, geopolitical realignments, and shifting priorities in major economies.

African insurers, regulators and policymakers increasingly recognise that waiting for global certainty is not an option and their response has been to lead. Climate risks are already embedded in our economies, and the cost of inaction is rising. As long-term risk managers and custodians of capital, insurers have a unique role to play in shaping how African economies adapt, grow, and invest.

In response to these challenges, the Nairobi Declaration on Sustainability Insurance (NDSI) was formally launched at the UNEP PSI (Principles for Sustainable Insurance) 4th Africa summit in April 2021 by UNEPFI alongside ICEA LION.

The NDSI is a declaration of commitment by the African insurance industry leaders to support the achievement of the UN Sustainable Development Goals as well as an endeavour to integrate ESG into their operations.

Today, the NDSI signatories cover 275 members from 38 countries across the continent. This leadership is becoming tangible. Through NDSI, African insurers are collectively demonstrating that sustainability is not merely an external obligation, but a core business consideration. Today, member institutions collectively manage approximately $342 billion in assets.

Of this, around 15 percent roughly $52 billion is already linked to ESG-aligned investments. These figures point to real progress and reveal the scale of opportunity: a substantial pool of domestic, long-term capital that can be channelled toward climate-resilient infrastructure, clean energy, inclusive finance and sustainable urban development.

As climate and development risks intensify, the question is no longer whether insurers should engage with sustainability, but how effectively they do so. This is where innovation becomes critical.

ICEA LION Group, as a founding member of NDSI, is at the forefront of this. Our participation in the development of the Geothermal Well Output Insurance Product reflects a practical response.

By helping de-risk early-stage geothermal projects, insurers can unlock private capital for clean energy, strengthen energy security, and reduce long-term exposure to fossil fuel volatility. By underwriting a portion of this risk, we are demonstrating that African insurers can play a direct role in enabling the energy transition as active market participants.

Across the continent, similar innovations are emerging: climate-risk covers for agriculture, parametric insurance for floods and droughts, and risk solutions for renewable energy and resilient infrastructure. These efforts reflect a broader realisation that sustainability, when embedded in product design and underwriting, can open new markets whilst strengthening resilience.

In an increasingly fragmented global environment, collaboration has become a strategic imperative. African insurers are working more closely with regulators, development finance institutions, reinsurers, and peers to build markets that are credible, transparent, and fit for purpose.

NDSI’s growth, from just eight founding signatories in 2021 to a continent-wide movement demonstrates the power of collective action in aligning ambition with execution.

This collaboration is important as global sustainability standards evolve. African markets must engage with these frameworks in ways that reflect local realities, ensuring they support inclusion, growth and resilience rather than creating unintended barriers. The adoption of IFRS S1 and S2 Standards will further support sustainability initiatives.

Looking ahead, the path forward will not be simple. Climate risks will continue to intensify. Capital constraints will persist. Global political uncertainty will remain a defining feature of our time. But African insurance leaders are showing that uncertainty does not have to result in loss or inertia.

By embedding sustainability into governance, underwriting and investment decisions, insurers are positioning themselves not only to absorb future shocks, but to shape more resilient development pathways.

The Africa Sustainable Insurance Summit provides a timely platform to reflect on progress, confront hard questions, and strengthen partnerships.

The first quarter of the calendar year is a critical time for many businesses to reassess their tax strategies. As budgets are finalised and growth plans reviewed, one question dominates: what will the Kenyan tax environment look like in 2026?

This question carries added significance considering the government’s ongoing revenue mobilisation agenda, the Medium-Term Revenue Strategy (MTRS), the increasing role of technology in tax administration, early campaigns for the 2027 General Elections, and global tax developments influencing domestic policy.

Income Tax remains the largest source of revenue, contributing over 40 percent of total collections, though recent shortfalls highlight vulnerabilities in corporate and PAYE collections. The MTRS signals a policy shift away from sector-specific incentives that have progressively eroded the tax base.

Moreover, we saw an attempt by the Finance Bill 2025 to delete a tax incentive of claiming 100 percent cumulative investment done outside Nairobi and Mombasa or within a SEZ; 15 percent tax incentive for real estate developers that construct at least 100 residential units annually; and 15 percent corporate tax incentive on local assemblers of motor vehicles. We expect such attempts to continue in 2026.

Individual income tax is likely to see a review of PAYE bands, potentially widening lower bands but aligning the top individual rate of 35 percent more closely with the corporate rate of 30 percent to stabilise collections from the largest tax head. Bankers are already pushing for this.

For micro and small businesses, KRA plans to exempt them from quarterly instalments and PRN requirements under the Turnover Tax (ToT) regime. With only 30,000 businesses registered and Sh391 million collected in FY 2023/24, uptake has been low.

The exemption will enable tax payments via mobile money, easing compliance and reducing administrative burden. This initiative supports KRA’s broader goal of expanding the taxpayer base from seven million to 11.5 million by June 2027 and raising MSME income tax collections from Sh17 billion to Sh500 billion annually.

Value Added Tax (VAT) reforms may include reviewing the registration threshold upwards from the current Sh5 million, rationalising exemptions and zero-rated supplies, reconsidering the VAT rate, perhaps introducing VAT on selected currently exempt services such as education and insurance, and refining input tax apportionment rules.

Export-oriented businesses could benefit from reduced input VAT from 16 percent to eight percent as intimated by government officials in the recently concluded UK-Kenya Business Forum.

Excise Duty reforms are expected to continue targeting products such as petroleum, tobacco, beverages, sugar, and alcohol content-based taxation.

Further, there are plans by the Kenya to remove excise duty and export levies on kraft paper to support industrial development and export competitiveness.

We hope that the government will also focus on reducing or abolishing excise duty on glass and ceramics considering its housing agenda as introduction of excise duty on such products has been counter productive.

Local manufacturers and dealers are complaining that what is available here does not meet the demand from their clients.

Other anticipated measures include carbon taxes, motor vehicle circulation taxes and surcharge taxes, alongside continued modernisation of the KRA systems, enhanced tax audits, and stronger enforcement.

Tax compliance in 2026 is no longer optional, it is an integral part of business strategy. Local and global tax reforms, digital enforcement, and judicial trends demand active engagement, accurate reporting, and forward-looking planning.

With the Finance Bill expected by April 2026 and enactment by 30 June 2026, taxpayers have an opportunity to participate in shaping policy while ensuring compliance. In this dynamic environment, readiness is the key to navigating Kenya’s evolving tax landscape.

Non-tax revenue has become a key pillar of Kenya’s public finances. For the year ended 3 June 2024, non-tax cash receipts reached Sh129.27 billion, a 57.6 percent increase from the prior year and well above projections.

This growth was driven by digitalisation of service fees through platforms like eCitizen, centralised payments, surpluses from semi-autonomous agencies, and dividends from state investments.

This demonstrates that better management of fees, agency surpluses, and investments can meaningfully supplement traditional tax collections.

Increase in NSSF contributions

From February 2026, the NSSF contributions enter the fourth phase of adjustment, raising the Tier I lower limit from Sh8,000 to Sh9,000 and Tier II upper limit from Sh72,000 to Sh108,000.

The contribution rate remains 6 percent for both employers and employees, however the portion of an employee’s salary that is subject to mandatory NSSF contributions will increase. In this case the maximum employee contribution will increase from Sh4,320 to Sh6,480 per month. Employers should review payroll to ensure accurate contributions and budgeting.

Tax administration reforms

The KRA continues to deepen technology-driven compliance, enhancing risk-based enforcement across sectors. Recent trends include:

The Electronic Rental Income Tax System (eRITS), launched in September 2025, which simplifies rental income registration, filing, and payment, while enabling cross-validation with land registries, utilities, and financial records.

Validation of income and expenses effective 1 January 2026 the KRA shall cross-check income and expenses claimed in corporate returns against eTIMS, withholding tax, and customs records. However, KRA has given taxpayers a one-time opportunity to declare non-eTIMS-supported income and expenses for the period 2025.

Further KRA plans to suspend filing of NIL returns until 31 March 2026 to allow the KRA to validate taxpayer compliance using integrated data sources, including eTIMS, e-invoicing, withholding tax, Customs, and NTSA records. Discrepancies between reported income and visible economic activity may trigger audits, reinforcing compliance risk.

Judicial trends to watch

Among the key court developments that will shape 2026 compliance include:

Carry-forward of tax losses: in the case of Patel v Commissioner for Legal Services and Board Co-ordination Services [2025] KETAT 420 (KLR) the Tax Appeals Tribunal confirmed that pre-1 July 2025 tax losses remain valid, with the new five-year limit applying to tax losses incurred by taxpayers from 1 July 2025. The position may change on appeal.

Valid objection to tax assessment must be filed on iTax portal: The High Court in the case of Commissioner of Investigation and Enforcement v Zhao [2025] KEHC 16297 (KLR) held the sixty (60) day timeline for issuing of an objection decision by the Commissioner starts when a taxpayer validly lodges its objection through the iTax system.

The practice has been to allow bulky objections delivered through email or by hand. Implementing this decision in 2026 may be a challenge if iTax capabilities are not enhanced.

Shifting the burden of proof to the KRA: A taxpayer has challenged Section 56(1) of the Tax Procedures Act, which presumes KRA assessments are correct, arguing this shifts an unfair evidential burden to taxpayers and undermines the right to a fair hearing guaranteed by the Constitution. We await to see the court’s decision as this will shape how tax disputes are resolved in Kenya.

Global tax trends

Kenya continues to align with global initiatives, including the Domestic Minimum Top-Up Tax for multinationals, and operationalising Advance Pricing Agreements from 1 January 2026 to pre-empt transfer pricing disputes. Kenya also may be affected by tariffs from its trading partners such as the US.

A legal dispute between commercial motor vehicle distributor Tata Africa Holdings and industrial machinery supplier Berlin Equipment has returned to the High Court for a fresh hearing after the Court of Appeal overturned conditions that had stalled the case for six years.

The appellate court reversed a High Court decision that required Berlin Equipment and Kwale International Sugar Company to deposit Sh22.3 million as security before defending themselves against Tata’s 2019 lawsuit.

The judges deemed the condition ‘oppressive’, ruling that the dispute should be decided on its merits rather than forcing the defendants to pay the contested amount upfront.

The conflict began in 2019, when Tata sued Berlin Equipment and Kwale International Sugar Company over an alleged unpaid debt of $5 million (Sh642 million at current exchange rates) for supplied machinery. The defendants denied owing Tata any money.

After the defendants failed to file a defence on time, the High Court issued a default judgment in June 2019.

However, following an application, the trial judge set aside that judgment, acknowledging that the defendants had raised triable issues in their defence and counterclaim.

The judge imposed a condition requiring them to deposit Sh22.3 million in a joint interest-earning account within 30 days, failing which the default judgment would be reinstated.

The condition was intended to ensure that the parties demonstrated a commitment to resolving the dispute promptly.

Berlin Equipment and Kwale International Sugar Company challenged the condition, leading to the appeal.

The Court of Appeal ruled that once a court identifies triable issues, any conditions for setting aside a default judgment must be fair and reasonable. The judges found that forcing the defendants to deposit the full claimed amount before liability was determined was unjust.

‘Requiring the appellants to deposit the entire decretal sum as a precondition to defending the suit had the practical effect of compelling them to secure the full claim before liability was determined,’ the judges stated.

They emphasised that efficiency in litigation should be achieved through proper case management, not by imposing disputed financial burdens.

The discretion to set aside default judgments, they noted, exists to prevent injustice, not to create additional barriers.

Consequently, the Court of Appeal lifted the deposit requirement unconditionally and directed that the case proceed before a different High Court judge for a full trial.

The parliamentary Finance and National Planning Committee says only Sh29.8 billion will be available for development expenditure in the 2025-26 financial year, underscoring the urgent need for divestiture of State-owned enterprises (SOEs) to ease pressure on public finances.

The committee chaired by Molo MP Kuria Kimani said out of projected ordinary revenue of Sh3.321 trillion, Sh1.097 trillion will go towards interest payments on the country’s ballooning debt, while Sh960 billion will be spent on the public wage bill.

Kenya’s public debt currently stands at Sh12 trillion, according to recent figures from the Parliamentary Budget Office, an independent think tank that advises MPs on fiscal and budget matters.

In a position paper supporting the proposed partial sale of government shares in Safaricom PLC to raise Sh204.3 billion for critical infrastructure development, the committee said of the revenue collected nationally, Sh415 billion will be allocated to the 47 counties, while Sh205.2 billion will go towards pension payments and Consolidated Fund Services (CFS).

Mr Kimani said civil servants’ pensions alone will consume Sh34.4 billion, while the Equalisation Fund has been allocated Sh10.6 billion.

‘The truth is that we have been living a lie all this time. There is no way we can build our country with Sh29.8 billion,’ Mr Kimani told a public participation forum held in Nairobi on Tuesday on the proposed sale of 15 percent of the government’s shares in Safaricom.

‘The 2025-26 fiscal framework offers a real-world example that shows the urgent need for divestiture to ease pressure on public finances,’ he added.

Mr Kimani further revealed that the government had a guaranteed debt stock of Sh83.236 billion in the 2024-25 financial year. This includes Sh46.156 billion owed by the Kenya Ports Authority, Sh27.39 billion by KenGen, and Sh9.69 billion by Kenya Airways.

The National Assembly’s joint committees on Finance and National Planning and Privatisation and Public Debt are currently conducting public participation forums in 30 counties on Sessional Paper No 3, which proposes the partial divestiture of government shares in Safaricom.

Through the sessional paper, the government seeks to generate approximately Sh204.3 billion ($1.57 billion) in gross proceeds by selling a 15 percent stake in Safaricom at a premium of 23.6 percent above the six-month volume-weighted average price as of December 2, 2025.

The government plans to sell six million shares to Vodacom at Sh34 per share. Currently, the government owns 35 percent of Safaricom, the Vodacom Group holds 40 percent, while public shareholders, including ordinary Kenyans, own the remaining 25 percent.

Parliament had 28 days from December 2025 to approve, reject, or amend the sessional paper, failing which it will automatically take effect on March 26.

The sale will be conducted through a negotiated transaction at Sh34 per share, above the recent market average.

As of January 30, Safaricom shares were trading at about Sh29.50 on the Nairobi Securities Exchange.

The sale is expected to raise about Sh204 billion in immediate cash. In addition, the government will receive an advance payment of Sh40 billion against future dividends from the remaining 20 per cent stake. The government will repay about Sh55 billion over six years using dividends from the unsold shares. After this period, it will continue to receive full dividends.

Vodacom has committed that the transaction will not result in acquisition-related job losses for at least three years.

Safaricom will retain a Kenyan chairperson and independent directors, while Vodacom has pledged continued support for the Safaricom Foundation.

About a decade ago, the term ‘CNA’, certified nursing assistant, was largely unfamiliar in Kenya, save for those who had working relatives in the US, Canada, Germany or the UK.

In healthcare, the career path was straightforward-parents often sent their children to train as nurses, doctors, clinical officers, pharmacists or lab technicians.

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Kenya Power is seeking to buy 100 megawatts (MW) of hydropower from Uganda under a power purchase agreement (PPA) to replace the current deal between the pair cementing Kenya as a net importer of electricity amid rising demand.

Joseph Siror, the managing director of Kenya Power, on Tuesday disclosed that the arrangement could offer Kenya with power priced at not more than $0.09 (Sh11.6 at current rates) per kilowatt-hour (kWh).

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The Employment and Labour Relations Court has faulted the Standard Chartered Bank Kenya for unfairly dismissing a branch manager accused of failing to act on a sexual harassment complaint lodged by a staff member.

In its judgment, the court found that the termination of Carolyne Mithano was biased, rushed, and procedurally flawed. While ruling on Ms Mithano’s case against her dismissal, the court determined that the bank unlawfully terminated her employment and that the disciplinary process was predetermined, citing an instance where one panelist had described her as “unfit” before the hearing.

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Kenyan digital creators earned Sh45.1 million in brand collaborations during the first year of TikTok’s commercial operations in the country, boosting the platform’s local creator economy as advertisers deepen their shift to short-form video.

Data released by the Chinese video-sharing platform show that more than 200 Kenyan creators collectively earned over $350,000 (Sh45.1 million) during the year ended January 2026 through partnerships facilitated under TikTok’s local commercial framework.

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The public procurement watchdog is pursuing 221 constituency offices, three counties, and a number of State agencies for failing to deduct a new levy when paying suppliers and contractors.

The offices are being pursued for breaching the law, which requires them to deduct 0.03 percent of payments to contractors and suppliers, as the Public Procurement Capacity Building Levy.

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For many organisations, HR has become synonymous with compliance. Policies. Approvals. Controls. Risk registers. Sign-offs. In highly regulated environments, this instinct is understandable. But somewhere along the way, compliance stopped being a foundation and quietly became the strategy. That shift is costing organisations more than they realise.

Compliance-first HR is reactive by design. It focuses on avoiding what might go wrong rather than enabling what could go right. Decisions are framed around risk mitigation instead of value creation.

New ideas are slowed down by approvals. Managers are trained to ask, ‘Is this allowed?’ rather than, ‘Is this effective?’ Over time, HR becomes the department of no. And when that happens, innovation moves elsewhere.

The irony is that compliance was never meant to replace strategy. It was meant to support it. Labour laws, governance frameworks, and internal controls exist to protect organisations and employees, not to paralyse them.

Yet in many workplaces, HR energy is disproportionately spent on ticking boxes while deeper people challenges go unaddressed. Poor leadership behaviour is tolerated because it is harder to confront than a policy breach.

Engagement issues are documented instead of solved. Performance problems are managed through forms rather than conversations.

This approach also weakens HR’s influence. When leaders only experience HR through audits, warnings, and process enforcement, they stop seeing HR as a strategic partner.

HR is invited late into conversations, often after damage has already been done, and expected to clean up rather than co-create. That is not a seat at the table. It is a safety net.

Compliance-first HR also struggles in moments that require speed and judgement. The modern workplace is shaped by hybrid work, multigenerational teams, rapid skill shifts, and constant change. These realities demand discretion, context, and human judgement.

Policies alone cannot guide leaders through burnout, conflict, ethical dilemmas, or cultural breakdowns. When HR hides behind rules instead of exercising influence, employees feel unseen and leaders feel unsupported.

None of this suggests that compliance is optional. In fact, strong compliance is non-negotiable. But it should be the baseline, not the headline.

The most effective HR functions treat compliance as hygiene and invest the rest of their energy in leadership capability, culture, workforce planning, and employee experience. They use policy as a guardrail, not a handbrake.

A shift away from compliance-first HR requires courage. It means HR professionals must move from being rule enforcers to trusted advisors. It requires stronger commercial understanding, better data storytelling, and the confidence to challenge leaders when behaviour contradicts values, even when it is uncomfortable.

It also means acknowledging that sometimes the resistance to change does not sit with leadership alone. At times, the rot is in HR too, when we choose safety over impact.

As organisations prepare for a new year of uncertainty and opportunity, HR must ask itself a hard question. Are we protecting the organisation from risk, or are we helping it grow? The future of work will not be shaped by those who simply follow the rules, but by those who know when to uphold them and when to evolve beyond them.

If HR wants to remain relevant, trusted, and influential, the shift must start now. Compliance should keep us safe. Strategy should take us forward.