Category: Business Daily

Security guards at malls, office blocks and even government buildings routinely demand personal details such as names, national ID numbers and phone contacts before allowing entry. But under Kenyan law, refusing to share personal data does not automatically give a building the right to deny access, according to data protection lawyers.

‘Denial of entry is not automatic or arbitrary,’ says Mary Audi, a senior associate advocate at Muri Mwaniki Thige and Kageni Advocates.

‘A building may only deny entry where the data requested is lawful, necessary and proportionate. Refusal alone does not justify exclusion.’

Her colleague, Fridah Muriithi, an associate advocate at the firm, says the starting point is the Constitution.

‘Article 31 of the Constitution guarantees the right to privacy, including the right not to have information relating to one’s private affairs unnecessarily required or revealed,’ she says.

The legal threshold, however, differs depending on whether the premises are privately or publicly owned.

Private buildings such as malls, office towers and residential complexes may impose reasonable access conditions as an exercise of property rights. Government buildings, on the other hand, are subject to stricter constitutional scrutiny and must justify any limitation on access.

‘Any restriction imposed by a State agency must be lawful, reasonable and consistent with constitutional rights,’ Ms Audi says.

The primary law governing personal data collection in such situations is the Data Protection Act, 2019 (DPA), read together with Article 31 of the Constitution. The Act regulates how personal data is collected, processed, stored and shared and applies to any entity that processes personal data, including building owners and security managers.

‘The Data Protection Act requires that data processing be lawful, fair and transparent,’ Ms Muriithi says.

‘A building collecting visitor information qualifies as a data controller or data processor and must comply with the Act.’

Not all personal data is treated equally under the law. According to the advocates, buildings may lawfully request basic identification details, but only where justified by a legitimate purpose such as security.

‘Information such as a visitor’s name, national ID or passport number, vehicle registration details, and time of entry and exit may be lawful if genuinely necessary for security,’ Ms Audi says.

However, the law draws a clear line when it comes to sensitive personal data.

‘Biometric data such as fingerprints or facial recognition, as well as health information or religious and political affiliation, requires explicit consent and a much higher standard of protection,’ Ms Muriithi says.

‘Routine or blanket collection of such data is unlawful.’

Crucially, refusing to provide personal data does not, on its own, give a building the right to lock someone out.

‘Denial of entry must be reasonable, proportionate and justifiable,’ Ms Audi says. ‘Blanket policies that demand non-essential data as a condition of entry are unlikely to meet the legal test.’

Consent, once given, is also not permanent. Under the Data Protection Act, individuals have the right to withdraw consent at any time.

‘Once consent is withdrawn, processing must stop unless there is another lawful basis for retaining the data,’ Ms Muriithi says.

Buildings that collect visitor data carry significant legal obligations. The Act requires data controllers to implement appropriate technical and organisational measures to safeguard personal data against unauthorised access, loss or misuse.

Depending on the scale and nature of processing, they may also be required to register with the Office of the Data Protection Commissioner (ODPC) and appoint a Data Protection Officer.

Failure to comply can attract serious penalties. The Data Protection Act empowers the ODPC to impose administrative fines of up to Sh5 million or 1 per cent of an entity’s annual turnover, or both.

‘In addition to regulatory penalties, individuals who suffer damage, including financial loss, distress or reputational harm, are entitled to compensation,’ Ms Muriithi says.

Certain violations may also attract criminal sanctions.

Buildings often justify data collection on security grounds, but the advocates caution that security is not a blank cheque.

‘Personal data may only be collected for security purposes where there is a legitimate and lawful security interest, such as crime prevention or public safety,’ Ms Audi says.

She adds: ‘The data must still be relevant, proportionate and limited to what is strictly necessary.’

While no Kenyan court has directly ruled on denial of entry solely due to refusal to share personal data, regulators have issued guidance.

The ODPC has warned that demanding excessive information, such as phone numbers, home addresses or occupations, as a condition of entry violates the Data Protection Act.

Individuals who believe they have been unlawfully denied entry have several avenues for redress. They may lodge a complaint with the ODPC, petition the High Court for violation of the constitutional right to privacy, or seek judicial review where a government agency is involved.

For members of the public, the advocates advise caution: Visitors should ask why their data is required, provide only the minimum information necessary and request to see a building’s privacy notice. Upon exiting, they may formally request deletion of their entry records once the security purpose has been fulfilled.

‘Privacy is not a courtesy extended by buildings,’ Ms Audi says. ‘It is a constitutional right, and any limitation must meet strict legal standards.’

Flower farm Star Bright Holdings is set to receive a pound 11 million (Sh1.6 billion) loan from the International Finance Corporation to fund additional investments in its farms in Kenya and Ethiopia.

The Mauritius-based company has 10 flower farms in the two countries – seven in Kenya and three in Ethiopia. The multinational will plant flowers on an additional 50 acres in Nakuru County as part of the expansion.

The loan from IFC will help the multinational fund a total new capital expenditure of pound 15.4 million (Sh2.3 billion).

The company will set up greenhouses, expand packing houses, establish a propagation facility and install hail nets.

The loan will also support the group, which specialises in production of summer flowers under the Marginpar brand, set up water recycling at the packhouses and installation of energy efficient lighting in the Nakuru farm.

‘The proposed investment is a senior loan of about Sh1.6 billion (pound 11 million) to Star Bright for its capital expenditure in its Kenya and Ethiopia farms and people and culture and IT developments,’ said IFC in its disclosures.

PE funds

Star Bright operates Kariki Kudenga Farm and MR Farm in Molo, Kariki Naivasha Farm, Kariki Juja Farm in Kiambu, Bondet Farm in Nanyuki, and KS Farm and ST Farm in Nakuru. Three of the farms (MR, KS and ST) were acquired from Carzan Flowers in 2018.

Star Bright is majority owned by private equity funds, AgriVie and Norfund, with 42 percent and 25 percent, respectively.

Other shareholders are co-Founder Richard Fernandes (19 percent) and Rob Koning (6 percent) with balance held by minority shareholders. The company has production output of approximately 200 million flower stems a year that are exported to European and Asian markets.

Cut flower exports from Kenyan farms grew last year with 66,688.3 tonnes sold in the six months to June 2025 from 52,542.1 tonnes a year earlier. The value of the flowers sold rose 19.5 percent to Sh47.1 billion in the half year to June 2025 from Sh39.4 billion.

Most of Kenya’s flowers are sold to the Netherlands -about 70 percent, followed by the United Kingdom with other significant markets being Germany, Italy and France.

Star Bright also operates three flower farms in Ethiopia while also sourcing from partner farms in Tanzania and Zimbabwe.

Kenya’s flower industry has been under pressure with some players shifting to Ethiopia citing high operating costs in the country including labour, power tariffs, freight costs and tax levies.

Last year, the government extended a two percent Standards Levy, originally meant for manufacturers, to include flower exporters, a move that industry players said would inflate costs and weaken Kenya’s position in the global market. Kenya is the largest exporter of cut flowers in Africa followed by Ethiopia.

Prime Bank has fended off a Sh87.6 million claim from the Kenya Revenue Authority (KRA) after the Tax Appeals Tribunal overturned the taxman’s claim on the lender’s income streams.

The claim followed the taxman’s audit of the bank’s books four years ago.

The ruling provides crucial clarity on the taxation of banks, particularly concerning excise duty and withholding tax on various income streams.

In its decision, the tribunal barred the imposition of excise duty on credit card interest, late payment interest and over-limit charges, ruling that these constitute interest income rather than taxable fees.

Additionally, it dismissed KRA’s attempt to tax cheque and bill discounting income, affirming that such earnings fall outside the scope of excise duty under the Excise Duty Act.

The tribunal also invalidated withholding tax assessments on payments made to non-resident service providers, operational expenses and procurement-related costs.

It found that KRA’s Commissioner of Legal Services and Board Coordination had acted unlawfully in levying these taxes, declaring the assessment internally inconsistent, legally flawed and unsupported by statute.

The dispute stemmed from a comprehensive audit conducted by KRA covering Prime Bank’s tax obligations between 2019 and 2022, including corporate income tax, withholding tax, PAYE, VAT, excise duty and reverse VAT.

In September 2024, KRA issued an additional assessment demanding Sh100 million in principal taxes. While Prime Bank settled Sh18.1 million, it contested the remaining balance, leading to the appeal.

A key issue in the case was withholding tax on interest paid to financial institutions. The tribunal ruled that such interest is explicitly exempt under Section 35(3)(b) of the Income Tax Act.

Despite KRA acknowledging this exemption during objections, it failed to adjust its final computations, prompting the tribunal to declare the decision unsustainable.

Furthermore, the tribunal criticised KRA for failing to credit withholding tax payments already made by Prime Bank.

The bank provided evidence of several payments, including Sh10.5 million in 2020 and Sh80,258 in 2021, both acknowledged by KRA yet not taken into account in the assessment. The tribunal deemed this an impermissible case of double taxation.

Regarding operational expenses, the tribunal found that withholding tax had been unlawfully applied to payments unrelated to statutory provisions.

These included purchases of goods, ATM relocation costs, repairs, maintenance and general procurement. Citing Sections 10 and 35 of the Income Tax Act, the tribunal emphasised that taxable payments are exhaustively defined, and any ambiguity must favour the taxpayer.

Prime Bank also successfully challenged withholding tax on payments to service providers in South Africa and the United Arab Emirates for management and software-related services.

The tribunal ruled that the applicable double taxation agreements (DTAs) did not provide for taxing such fees and that, absent a permanent establishment in Kenya, the income could not be subject to local taxation.

For the 2019 tax year, the tribunal ruled that KRA lacked legal authority to recover unwithheld tax before November 7, 2019, when Section 39A of the Tax Procedures Act took effect.

Consequently, any withholding tax demands for that period were declared invalid.

On excise duty, the tribunal reinforced that interest income-regardless of its structure-does not attract excise duty. It dismissed KRA’s classification of cheque and bill discounting income, card interest, late payment charges and over-limit fees as taxable ‘other fees’.

Additionally, excise duty on international card interchange fees was overturned, with the tribunal ruling that these services were consumed outside Kenya and thus qualified as tax-exempt exports.

The ruling represents a landmark decision for Kenya’s banking sector, reinforcing legal protections against arbitrary tax assessments and affirming the primacy of statutory provisions and international tax agreements.

Kenya Power has increased its interim dividend by 50 percent to Sh0.3 per share for the half year to December 2025 as the company continued to enhance payouts to shareholders amid profit growth.

The company, which had paid an interim dividend of Sh0.2 per share a year earlier, saw its net profit rise to Sh10.4 billion from Sh9.9 billion.

The new dividend will be paid on March 27 to shareholders who will be on the register on February 23.

The interim dividend declared last year was the first that the Nairobi Securities Exchange-listed company had declared in nine years.

Kenya Power’s return to profitability and dividend payments has seen its share price at the NSE rally to Monday’s Sh15.2 from lows of below Sh2 in August 2024.

The company attributed its stronger performance in its half-year results to improved electricity sales, which grew by 6.9 percent from Sh107.42 billion to Sh114.87 billion, driven by higher electricity demand and improved distribution efficiency.

‘The continued growth in electricity sales, supported by rising demand, improving distribution efficiency, combined with lower finance costs, lay out a solid foundation for improved profitability, enhanced service delivery, and financial sustainability into the future,’ said the utility firm in its financial statement.

‘Looking ahead, we will safeguard supply adequacy as demand grows and accelerate our loss reduction programme. We are also advancing our grid modernisation and digitisation projects to improve service reliability and efficiency, enhance customer experience, and support sustainable growth.”

Operating expenses rose by Sh1.43 billion, from Sh23.74 billion to Sh25.16 billion, on account of higher provisions for expected credit losses following growth in customer debt levels, increased depreciation arising from the capitalisation of completed network projects, and staff-related cost movements.

Finance costs, which dropped significantly in the previous period, reduced further by Sh492 million, reflecting lower interest expenses following scheduled loan repayments and reduced debt levels, said the power distributor.

The utility firm said that its financial health strengthened after it successfully lowered its total debt.

Total borrowings reduced by six percent to Sh84.23 billion as at December 31, 2025, as Kenya Power continued to benefit from a strong shilling.

Kenya Power loans are denominated in foreign currency mainly the dollar and euro, highlighting why the company was one of the biggest gainers in the wake of the shilling’s rally from the start of last year. About 90 percent of Kenya Power’s loans are in foreign currency.

The firm had been leaning on the moratorium window to attain sustainability in annual debt service, improving both its net cash position and working capital alongside its financial ratios. It now plans to retire all hard currency commercial debt in its books by June this year.

The Court of Appeal has blocked attempts to introduce new evidence from Parliament and add fresh parties to a prolonged legal battle over a lucrative 4,000-acre parcel within the Maasai Mara National Reserve.

The contested land, known as Cis-Mara/Talek/155, is owned by businessman Livingstone Kunini Ntutu, who is a brother of Narok Governor Patrick Ntutu.

In two separate rulings, a three-judge bench dismissed applications by private individual Antony Kilerai and the Maasai Mara Disabled Self-Help Group, who sought to join the appeal and submit new materials.

The judges cited strict appellate rules and concerns over disrupting ongoing proceedings.

The dispute, spanning over 25 years, involves multiple court cases challenging ownership of the tract, which lies within the Maasai Mara ecosystem-a tourism hub generating billions annually.

In March 2025, the Environment and Land Court upheld businessman Ntutu’s ownership rights, including tourism fee collection, a decision now appealed by Narok County Government over the title’s validity.

Mr Kilerai and the self-help group aimed to present evidence allegedly proving Mr Ntutu’s title was fraudulent or nonexistent.

Mr Kilerai’s submissions included correspondence from the Lands Cabinet Secretary, Hansard records from Parliament’s Lands Committee, and other documents.

However, the court dismissed both applications. For Kilerai, it ruled that joining an appeal requires demonstrating direct legal interest-a threshold his public-interest argument failed to meet, especially with the county already litigating on residents’ behalf. The judges also barred new evidence, stressing appellate courts avoid reopening untested issues from lower courts.

For now, Narok County’s appeal remains the sole challenge to Mr Ntutu’s title, with interim orders permitting his continued fee collection (under accounting) pending the outcome.

Kilerai’s reliance on Parliamentary records was particularly criticised. The bench warned that interested parties cannot introduce new issues for determination, as this would unfairly expand the appeal’s scope.

It further blocked sourcing evidence via Parliament amid active litigation, calling it a collateral attack on judicial authority.

‘Additional evidence on appeal is exceptional, not routine,’ the court stated, rejecting the materials outright.

The self-help group’s application was dismissed procedurally, as the unregistered association lacked legal standing.

Despite claims of representing vulnerable locals dependent on Mara revenues, the judges maintained the case was a private land dispute requiring strict adherence to legal capacity rules.

The bench also rejected conflict-of-interest allegations against Narok County, noting Governor Ntutu’s non-involvement-the litigation predates his tenure by decades-and the county’s independent legal representation ensured impartiality.

The rulings confine the appeal to its original parties and existing record, reinforcing that appellate courts do not retry facts or entertain new disputes.

Mr Ntutu asserts he lawfully acquired the land in 1997 after Talek’s adjudication, extinguishing prior county claims.

The county, however, insists the land was never properly surveyed or adjudicated and remains part of the Mara reserve. The appeal will ultimately resolve these competing claims.

Two national schools are on the spot for charging parents and guardians up to Sh300,000 school fees in the 2024 academic year, defying a directive by the Education ministry which had capped the fees at Sh67,244.

An audit by the Office of Auditor General Nancy Gathungu revealed that Starehe Boys Centre charged between Sh140,000 and Sh300,000 despite a circular setting its school fees at Sh67,244 per year, while its sister school, Starehe Girls Centre, charged Sh150,000, which was about triple the set Sh53,554. Reports by the Auditor-General Office are often delayed and only get to published long after extended periods.

The two institutions defied a 2022 ministry circular that prohibited schools from raising school fees, exposing the extent to which schools are ignoring State controls and overburdening parents, amid complaints of haphazard increases in fees and other charges by school managements.

In an audit for the year to June 2024, which was tabled in Parliament late last year, the Starehe Girls Centre was accused of nearly tripling school fees, while denying parents representation in its key decision-making organ, the Board of Management (BOM).

Ms Gathungu flagged the irregular increase in school fees at the institution, noting that each student was overcharged Sh96,446 in just one year.

‘There was a departure from the school fees charged for a Category A – Boarding Schools Fees Structure of Sh53,554 issued by the Ministry of Education…as the school charged Sh150,000, leading to an unapproved charge of Sh96,446 per student,’ Ms Gathungu said.

The public auditor reckons that a school needs to get approval from the Education Cabinet Secretary (CS) before introducing additional charges, a legal requirement Starehe Girls breached.

The revelations come at a time when parents across the country have been raising complaints over schools raising fees and introducing unapproved charges, even as the government appears unable to rein in the defiance by school heads.

The Starehe Boys Centre is also accused of charging students school fees of between Sh140,000 and Sh300,000 without the approval of the Education CS.

The school’s management says it agreed with parents to pay the amounts based on their ability, but the public auditor maintains that the school cannot increase the fees beyond Sh67,244 without approval from the CS.

‘The school management entered into agreement with parents to pay school fees at different rates ranging from Sh140,000 to Sh300,000 based on the parent’s ability in contravention of section 3.2 of the Ministry of Education Circular Number MOE-HQS/311313 on fees charged for Category A. Boarding school of Sh67,244 which required the school management to obtain a written authority from the CS,’ Ms Gathungu said.

The school collected Sh92.6 million in fees from parents during the year.

Despite the illegal increase of school fees, the public auditor faults the institutions for lacking proper management systems, exposing them to understaffing and blocking parents from decision-making organs.

Starehe Boys, for instance, faced a shortage of 28 teachers during the year under review, and the institution had been without a substantive principal since October 2019.

‘There was no indication of any effort made by the BOM to ensure that the vacant positions are filled,’ Ms Gathungu said.

Starehe Girls is also accused of lacking a Parents and Teachers Association (PTA), operating without mechanisms for parents to oversee its BOM and to ensure student and staff welfare.

The lack of a PTA is worsened by the failure to have a representation of parents, students, and sponsors at the school’s 10-member BOM, another breach of the law.

‘Specifically, the Board did not include six persons elected to represent parents in the school, three members representing sponsors, one member representing special needs, one person representing special interest groups, and a representative of the students’ council as an ex officio member,’ the Auditor-General says.

The Starehe Girls Centre is one of the biggest secondary schools in the country, commanding an asset base estimated at Sh3.4 billion at the time of audit, a workforce of 71, and a student population of 746 during the year.

Fees arrears for the school during the year hit Sh31.3 million, up from Sh18.35 million the previous year.

The High Court has allowed listed mortgage lender Housing Finance to proceed with the sale of charged properties in Tigoni after dismissing a borrower’s claim that a Sh76 million loan had been repaid twice and fully settled.

The court rejected Echuka Country Estate Limited’s lawsuit against the lender, ruling that the developer remained in default despite alleging double recovery.

In its decision, the court dismissed Echuka’s argument that the bank, listed on the Nairobi Securities Exchange, had recovered more than Sh174 million-far exceeding the original Sh76 million facility-through auctions, private sales, and cash payments.

The borrower claimed that the bank had recouped Sh93.8 million through the public auction of 17 units and a further Sh80 million through the sale of six units by private treaty and other cash payments, totalling Sh174 million.

However, the court found most of these alleged payments lacked supporting evidence.

‘The plaintiff has failed to prove the payment of Sh174 million,’ the court stated, acknowledging only Sh93.8 million recovered from a public auction of 17 units as verified.

The judge ruled that without proof of full repayment or double recovery, the bank’s statutory power of sale remained valid and could not be blocked merely because the borrower disputed the loan balance.

The dispute stemmed from a 2013 construction loan meant to finance a residential development in Tigoni, Limuru.

Secured by charges on three parcels of land, the project-marketed as ‘Echuka Country Estates’-faced financial difficulties, rendering the facility non-performing by 2016.

A subsequent restructuring agreement recognised an outstanding balance of Sh104 million with an annual interest rate of 17 percent. Echuka is committed to subdividing the land into 42 plots to facilitate individual sales.

However, Echuka later accused the bank and its lawyers of delaying the subdivision, stalling sales, and unfairly inflating interest rates.

The company insisted the lender had recovered over Sh174 million-enough to extinguish the debt-through auctions, private sales, and direct payments.

The bank disputed this claim, citing a pivotal 2020 settlement deed that halted an earlier auction.

Under this agreement, adopted as a court order, Echuka admitted an outstanding debt of Sh180.9 million. The bank offered to accept Sh123.8 million if Echuka adhered to a strict repayment schedule-a condition the borrower failed to meet.

When Echuka defaulted again and sought court protection against another sale attempt, the court upheld the 2020 settlement’s validity.

The judge emphasised that consent orders carry contractual weight and can only be overturned due to fraud or mistake-neither of which Echuka proved.

‘Having benefited from suspending the auction by admitting the debt, it would be unconscionable to now claim the amount was lower,’ the court ruled.

Regarding alleged overpayments, the court found Echuka’s Sh80 million claim unsupported.

While the bank confirmed receiving Sh93.8 million from auctioning 17 units in April 2021, Echuka could not provide documentation for additional payments.

During cross-examination, Echuka’s witness admitted to a lack of proof. ‘In a commercial dispute of this magnitude, the court cannot rely on mere assertions,’ the judges noted.

The court also rejected Echuka’s bid to cancel Sh59 million in accrued interest, stating that the restructuring agreement clearly placed subdivision responsibilities on the borrower.

‘A court cannot rewrite contracts,’ the judge affirmed, ruling the 17 per cent interest rate lawful and fair.

Echuka’s challenge to the bank’s sale rights under the Land Act also failed. The court clarified that disputes over exact amounts owed do not prevent sales once default is confirmed. Claims of potential undervaluation were deemed speculative.

‘He who seeks equity must come with clean hands,’ the court concluded, criticizing Echuka’s repeated litigation tactics to delay repayment without settling uncontested debts.

The case was dismissed with costs awarded to Housing Finance, freeing the bank to proceed with selling the remaining charged properties.

Chinese-owned electric vehicle (EV) dealer Rideence Africa is investing Sh320 million in an assembly line in Mombasa as it seeks to reduce vehicle prices by as much as 25 percent through tax incentives offered to firms engaged in local production.

The firm has partnered with Associated Vehicle Assemblers (AVA) to assemble electric hatchbacks from completely knocked-down (CKD) kits sourced from the Chinese automaker Beijing Henrey and 16-seater vans by the commercial vehicle company Jiangsu Joylong.

The investment covers the cost of importing assembly kits, plant fees payable to AVA, taxes, freight, and expanding labour capacity to raise production output. Some 132 hatchbacks and 20 vans are scheduled to be assembled by the end of February.

Rideence leases Beijing Henrey’s tiny Xiaohu FEV model cars to taxi drivers in Nairobi, who pay a deposit of between Sh50,000 and Sh100,000 and a daily lease fee of between Sh2,400 and Sh3,100 for six days a week.

The cars have a driving range of between 200 and 285 kilometres. Customers also currently buy the cars outright at Sh2.5 million and Sh2.8 million for the two varieties, respectively. The company says it has deployed more than 180 EVs since entering the Kenyan market in November 2023.

EV assemblers in Kenya are exempt from the 35 percent import duty levied on fully-built units shipped into the country.

The government has also lowered excise duty on EVs from 20 percent to 10 percent and exempted them from value-added tax to boost their uptake in the new-vehicle market.

These tax benefits are expected to help Rideence to lower the prices of its vehicles in the Kenyan market.

“We will be assembling between five and 10 vehicles a day at the Mombasa facility,” a company spokesperson told the Business Daily.

“We have been paying a lot of taxes while importing fully built units. With a local plant, we will benefit from incentives while also sourcing components such as tyres, upholstery and leaf springs from local manufacturers.”

For the Joylong vans, which now retail at about Sh7 million, excluding VAT, Rideence expects prices to drop by as much as 25 percent, but said final pricing would be announced after costs are fully factored in.

Beyond EVs, the government also exempts assemblers of all vehicles from the import duty of 35 percent levied on fully built vehicles.

Assemblers also pay a lower import declaration fee of 2.5 percent for their completely knocked down parts headed to assembly plants, compared to the standard 3.5 percent. The two percent Railway Development Levy is also reduced to 1.5 percent for assemblers.

Rideence has invested more than Sh1.4 billion in Kenya since 2023, according to Managing Director Minnan Yu. The firm expects the partnership with AVA to lift local content to more than 25 percent by 2026, with a longer-term target of between 40 and 60 percent.

The firm currently operates more than 16 charging stations in Kisii, Narok, Nakuru, Machakos, Nairobi, Kiambu and Kajiado.

‘It is good that there is already an established supply chain for van components, because electric models share a lot of parts with their ICE (internal combustion engine) counterparts,’ the spokesperson added.

It plans to increase the number to 100 nationwide by the end of 2026 to support its growing fleet. Most additional stations are expected to cater to electric vans.

AVA, owned by Simba Corp, is one of the top assemblers in the country and produces vehicles for several rival dealers.

Much of the assembly in Kenya has, however, been concentrated in commercial units such as pick-ups, trucks and buses.

Meanwhile, a large percentage of Kenya’s EV production has been in two-wheelers and buses. Rideence joins fellow Chinese EV carmaker Dongfeng, which in December 2025 announced a deal with AVA towards local assembly in the first quarter of 2026. In November 2025, Tad Motors, owned by the Ethiopian-born Dutch businessman Tadesse Tessema, launched sales for its first five locally assembled electric cars made from Chinese-sourced parts.

As Kenya edges closer to its first commercial oil production, one legacy question refuses to fade: what exactly did the Early Oil Pilot Scheme deliver, and was it worth it?

The debate has resurfaced with renewed intensity as the country races toward a December 2026 production target.

Many Kenyans still ask why the Early Oil Pilot Scheme (EOPS), undertaken between 2018 and 2019, did not translate into cheaper fuel or immediate financial returns. These questions are fair. I, too, have interrogated them closely.

To answer them honestly, we must be clear from the outset. EOPS was never designed to be a commercial oil production project. It was a technical pilot, undertaken deliberately to test, learn, and de-risk Kenya’s first oil development before committing billions of dollars to full-field production.

When Kenya’s oil history is eventually written, EOPS will likely stand as the second most important milestone after the 2012 discovery of oil in the South Lokichar Basin. Not because it made money, but because it helped the country avoid far costlier mistakes.

EOPS was implemented under the Early Oil Pilot Scheme Agreement between the government and the Kenya Joint Venture consortium comprising Tullow Oil, Total, and Africa Oil Corporation. It was carried out during the exploration and appraisal phase, when uncertainties about the reservoir, logistics, and market access were still significant.

At a cost of $62.73 million, the scheme’s purpose was technical and operational: to gather subsurface data, test production systems, validate logistics, and generate real-world evidence to support a future Field Development Plan. These are precisely the questions that cannot be answered on paper alone.

One of the most persistent misconceptions is that EOPS was meant to lower fuel prices. It could not have done so, by either design or scale.

Kenya consumes about 110,000 barrels per day of refined petroleum products. EOPS involved small, one-off crude oil export parcels. Moreover, the oil produced was crude, not refined. Even at full pilot output, the volumes were negligible relative to national consumption.

Globally, early oil pilot schemes are learning investments. They rarely generate profits. Their value lies in de-risking multi-billion-dollar developments by identifying technical, operational, and commercial pitfalls early. In this respect, Kenya’s EOPS performed exactly as intended.

Technically, the scheme delivered critical subsurface and well performance data. It allowed engineers to calibrate reservoir and production models and confirm proof of concept under real operating conditions.

This data now underpins the Field Development Plan submitted by Gulf Energy E and P BV, currently under parliamentary review and public participation. In practical terms, EOPS data forms the bedrock of the near-term development of the South Lokichar Basin and will continue to inform operations long after first commercial oil.

Beyond the reservoir, EOPS tested what often determines success or failure in frontier oil projects.logistics and infrastructure. The scheme catalysed upgrades to roads in Turkana, including the replacement of the Kainuk Bridge.

It stress-tested long-distance crude transportation, storage, and export systems, providing invaluable operational experience for both national and county governments ahead of scaled development.

At peak, EOPS produced up to 2,000 barrels of crude oil per day from the Amosing and Ngamia fields. The crude was transported in heated, insulated tankers to the Kenya Petroleum Refineries Limited storage facilities in Mombasa. From there, 414,777 barrels were marketed and sold competitively on the global market.

Kenya’s crude achieved price discovery at a differential of about minus $3.5 to Brent, a widely used global benchmark. This confirmed that the crude is marketable and provided early insight into how it would be priced internationally. Two export cargoes were sold: one shipped in August 2019 to ChemChina UK Ltd and another in September 2022 to Glencore Singapore Pte Ltd, generating $28.34 million.

The financial outcome is well known. With total expenditure of $62.73 million against sales proceeds of $28.34 million, EOPS recorded a deficit of $34.38 million.

This figure, however, must be understood in context. Much of the cost reflects historical exploration expenditure, alongside development and operating costs such as production, transportation, logistics, storage, marketing, and port charges.

Seen against a full-field development projected to cost several billion dollars, the pilot’s cost represents a deliberate insurance premium. The alternative would have been to proceed blindly into commercial production, exposing the country to higher technical and financial risks.

EOPS did not promise quick wins. It promised learning, and it delivered exactly that.

As Kenya moves toward first commercial oil, we do so with better data, tested systems, clearer market knowledge, and stronger institutional readiness. That is the quiet but enduring legacy of the Early Oil Pilot Scheme, and it is why it remains a necessary chapter in Kenya’s oil journey.

Crucially, EOPS also built local capability. It validated Kenya’s capacity to handle crude transportation, storage, and export operations while training local personnel and strengthening engagement frameworks with communities and institutions. These are foundations that cannot be improvised once commercial production begins.

Today, Parliament is considering the Field Development Plan and Production Sharing Contracts for Blocks T6 and T7.

The objective is clear: to progress to development based on sound technical solutions, robust environmental safeguards, tangible local benefits, and competitive fiscal terms, all within the framework of the law and transparent oversight.

For decades, Kenya’s credit system has relied on asset-backed lending, fixed repayment schedules, and risk-based pricing. While this ‘logbook and title deed’ approach has protected lenders, it has excluded many productive enterprises.

Small and medium-sized businesses (SMEs) and growth-stage companies, whose real value lies not in land or machinery, but in predictable revenues and scalable business models, have particularly been affected.

As banks and private lenders grapple with rising non-performing loans (NPLs), stricter regulations, and evolving borrower profiles, traditional methods are proving inadequate.

Revenue-based financing (RBF) offers a credible alternative to this collateral-dependent system, especially when combined with insurance and credit guarantees.

At its core, RBF enables lenders to provide capital in exchange for a percentage of a borrower’s future revenues.

These payments are made periodically until an agreed-upon return is achieved. Repayments fluctuate with business performance, easing pressure during slow periods and accelerating recovery during peak seasons. Unlike fixed-term loans, RBF aligns repayment with cash flow. Unlike equity, it preserves ownership and control.

This structure makes RBF particularly attractive for businesses with recurring or predictable revenues, such as those in agribusiness, technology, climate solutions, healthcare, hospitality, and professional services. For lenders, it introduces a model where risk is shared rather than entirely transferred to the borrower.

Banks should view revenue-based financing not as a replacement for conventional lending, but as a tool to enhance their portfolios. By incorporating revenue-based products, they can extend credit to viable businesses with strong, verifiable cash flows but lacking traditional collateral.

Variable repayments reduce default risk during downturns, while flexible structures improve client retention and foster long-term relationships.

Technological advancements further strengthen the case for this model. Digital banking, point-of-sale integrations, and real-time revenue monitoring now allow lenders to more accurately track borrower performance, automate collections, and dynamically manage risk, moving beyond static financial statements and historical balance sheets.

To encourage regulated institutions to adopt revenue-based lending, the associated risks must be addressed. Insurance can significantly enhance RBF’s viability.

Revenue interruption insurance can protect lenders against income drops caused by external shocks like climate events or supply-chain disruptions.

Credit insurance can cover partial losses if borrowers fail before the agreed return is achieved. Portfolio-level insurance can smooth returns across multiple RBF transactions, making the model safer for lenders.

By transferring some downside risk to insurers, lenders can offer more competitive revenue-based products and expand access to credit without compromising prudential standards.

This represents a new underwriting opportunity for insurers, focused on performance risk supported by increasingly sophisticated business data, rather than static asset values.

Credit-guarantee mechanisms offer another powerful means for scaling RBF. Guarantees from development finance institutions, sovereign funds, or private guarantors can cover first-loss risk for banks piloting RBF products. This de-risks lending to priority sectors like agriculture and SMEs and improves capital efficiency under regulatory frameworks.

In practice, a bank could extend revenue-based financing to SMEs, supported by a partial credit guarantee and revenue interruption insurance. The result is a layered risk-sharing structure where borrowers, lenders, insurers, and guarantors are all aligned around performance, not just collateral.

Private lenders, such as fintechs, private debt funds, and alternative credit providers, have been quicker to adopt revenue-based models. Many already use it as a core strategy, efficiently recycling capital as repayments track revenue performance.

By partnering with insurers and guarantee providers, private lenders can responsibly scale ticket sizes, enter higher-risk sectors, and protect investor returns while offering founder-friendly capital.

However, the success of RBF depends on robust legal and regulatory foundations. Clear contractual definitions of revenue, transparent reporting mechanisms, proper regulatory classification, sound tax treatment, and enforceable insolvency protections are essential. Without careful structuring, RBF risks ambiguity. With it, the model becomes scalable and compliant.

Revenue-based financing, enhanced through insurance and credit guarantees, offers a blueprint for the future of credit in Kenya.

It allows capital to follow performance rather than collateral, supports productive enterprises, and distributes risk more intelligently across the financial ecosystem.

As lenders search for sustainable growth in a changing economy, the question is no longer whether alternative credit models work, but how quickly institutions can responsibly adapt them. The future of credit may lie not in abandoning traditional methods, but in re-engineering them using revenue, risk-sharing, and innovation to finance growth where it actually happens.