Category: Business Daily

Bank of Baroda has returned to the High Court seeking a review of a decision that left it facing a Sh2.99 billion default judgment in favour of Infinity Industrial Park.

The lender says it failed to file its defence in the case after its former lawyers failed to inform it that the court had granted leave to file a defence in the long-running dispute.

Through credit officer Hillary Sang, the bank says the failure by its advocates to communicate the court’s orders was ‘very injurious and amounts to sufficient cause for the decision to be reviewed’.

‘I verily believe that the absence of summons to enter appearance is not only in error but amounts to sufficient cause to review the court’s decision,’ Mr Sang said.

The bank is seeking a review of the High Court’s July 31, 2026 decision dismissing its application to set aside a default judgment entered on September 8, 2025.

Bank of Baroda argues that the summons to enter appearance uploaded on the court’s Case Tracking System (CTS) on June 14, 2024, was unsigned and remains outstanding. It also says its former lawyers never informed it that the court had granted leave to file a defence.

‘The failure by the advocates on record to update the lender regarding the court’s orders to file a defence did not place the bank in a position of knowledge to follow up with their then advocates to file the defence,’ Mr Sang said.

The High Court, however, found that the bank had participated in the proceedings and was represented by lawyers when it was allowed to file its defence.

‘As I have already found, the Defendant entered an appearance, participated in the interlocutory proceedings, and was expressly granted leave to file a defence. The defendant was represented by counsel throughout. The failure to comply with the Court’s timeline is not attributable to the absence of formal summons; it is simply a case of non-compliance with a court order,’ the judge ruled.

The court said the bank had failed to provide a satisfactory explanation for its delay and dismissed its application, describing its conduct as indolence.

‘The Constitution, specifically Article 159(2)(b), mandates that courts must deliver justice without unnecessary delays. The Civil Procedure Act emphasizes that civil disputes be determined fairly, quickly, proportionately, and affordably, as outlined in Sections 1A and 1B. A party that neglects its rights cannot later rely on the Constitution to avoid the repercussions of its own inaction,’ the court ruled.

Bank of Baroda now says the judgment exposes it to immediate and potentially crippling losses.

‘That I am advised by the Applicant’s advocates on record, and which advise I verily believe to be true, that the applicant stands to suffer immediate irreparable loss and damage to the tune of Sh2.996 billion which will cause severe operational disruption and reputation damage,’ Mr Sang said.

The dispute stems from a Sh1.976 billion loan advanced by the bank to Infinity in 2019 to finance the development of its industrial park, including infrastructure and warehouses at Njiru along the Eastern Bypass.

The loan was secured against several properties, including the industrial park land.

Infinity sued the bank in June 2024, accusing it of actions that disrupted its operations, damaged its reputation, and undermined efforts to attract fresh investment. It is seeking about Sh2.996 billion in damages.

The bank maintains that Infinity defaulted on the loan and that it was entitled to exercise its rights as a secured lender.

On September 8, 2025, the High Court entered default judgment in Infinity’s favour after the bank failed to file its defence within the prescribed period.

The bank later argued that its intended defence raised triable issues, including the replacement of a charge over the industrial park property, the amount secured and a statutory notice relating to a Sh2 billion claim.

The court rejected the argument, holding that the existence of triable issues did not, by itself, justify setting aside the judgment.

Questions over missing records at the Kenya Civil Aviation Authority (KCAA) have deepened a dispute over recruitment of the State agency’s next director-general, with the High Court pointing out that the matters raised require a full hearing.

The court noted that the petitioners had complained that KCAA had not produced Board minutes, a resolution, meeting agenda or attendance records to substantiate claims that the decision to begin recruitment of the director-general was made when the Board had enough members present to make binding legal decisions.

KCAA, however, maintains that its Board approved recruitment on April 17, 2026, when it was properly constituted.

Responding to a petition challenging the recruitment of a new director-general, KCAA told the court that the process was later placed on hold after the terms of independent directors expired, pending reconstitution of the Board.

However, the court said no resolution had been presented to demonstrate that recruitment had actually been halted. It has consequently stopped KCAA from advertising, processing or concluding the recruitment until the Board is fully constituted or the petition is determined.

‘A conservatory order is issued staying the implementation of the resolution of the first respondent’s (KCAA) Board of Directors to advertise, commence, process, or conclude the recruitment process for the position of Director General of the Kenya Civil Aviation Authority, pending the full hearing and determination of the Petition or until the Board is fully constituted, whichever comes first,’ said the court.

Noting that KCAA acknowledged that it could not exercise statutory functions until the Board is fully constituted in accordance with section 17 of the Civil Aviation Act, the court also issued an order restraining the Board from transacting statutory business requiring mandatory quorum unless and until the Board is lawfully constituted.

The dispute followed the departure of Emile Nguza Arao, whose tenure as director-general ended on April 22. KCAA subsequently appointed Nicholas Bodo as acting director-general while it sought a substantive successor. KCAA announced Bodo’s appointment on April 23 and said he would provide continuity as the authority recruited a permanent holder.

The petitioners, Humphrey Bulimu and Charles Mutyetu, want the recruitment declared unlawful and the Board restrained from concluding it until lawfully constituted. They seek orders requiring vacancies to be filled through an open, transparent and competitive process.

They challenge the composition of the KCAA Board, the tenure of board member Anne Too and the manner in which the director-general recruitment was initiated.

The petitioners argue that the Board requires six members for quorum under the Civil Aviation Act and that several independent members’ terms expired on April 20. They also contend that Ms Too’s tenure ended on the same date because she replaced a former member for the remainder of that member’s term.

KCAA disputes that position. Its lawyers told the court that Ms Too was appointed on October 24, 2025, for a three-year term. They further challenged the qualifications, saying a four-week leadership course required under KCAA’s 2025 Career Guidelines was treated as an added advantage and computer proficiency was omitted.

KCAA defended the email address as an official recruitment portal and said the leadership course was not a mandatory statutory requirement under Section 19(4) of the Civil Aviation Act.

The court rejected the jurisdiction objection at this stage, holding that the dispute concerned public law questions over Board composition, statutory compliance and governance. The judge found the petitioners had the capacity to file the case under Article 258 of the Constitution.

On recruitment, the court found that the allegations raised substantive issues requiring examination at the full hearing.

‘I find that the petitioners have demonstrated that they have a prima facie case requiring full judicial examination,’ the court said. The judge noted that no Board resolution had been presented to show that the recruitment process had been halted.

‘It is therefore this court’s finding that the public interest heavily favours the proposition that a director-general should be appointed strictly in accordance with the law and constitutional values,’ the court said.

The court found that allowing recruitment to continue could undermine the petition because an appointment could be completed before the court determined its legality.

‘Reversing an executive appointment after an individual has gone through a rigorous process of being shortlisted, interviewed and assumed office creates administrative chaos, legal uncertainty and complex unwinding liabilities to the citizen taxpayer,’ the court said.

The court said an acting director-general was already in place, meaning that the order would not disrupt KCAA’s operations.

It therefore restrained the Board from conducting statutory business requiring a mandatory quorum until it is lawfully constituted. It also declined to determine Anne Too’s fate before hearing the petition.

KCAA regulates aviation safety and security, provides air navigation services and oversees civil aviation standards. The petition is set for pre-trial directions on October 6, 2026.

The Merali family is venturing into glass manufacturing by acquiring a 50 percent stake in a proposed Sh330.36 million pharmaceutical glass bottle plant at the Dongo Kundu Special Economic Zone (SEZ), as it seeks to revive its fortunes in manufacturing.

The Meralis own a 50 percent stake in Milly Glass Works Limited, whose affiliate, Milly SEZ Limited, will build the plant on six hectares within the Dongo Kundu SEZ in Mombasa County, according to information from the Business Registration Service (BRS).

The facility is expected to produce 290,000 tonnes of glass bottles annually. Milly Glass Works Limited, which has long been associated with the family of Mombasa businessman and former Kanu-nominated MP Rashid Sajjad, also fully owns Milly SEZ Limited.

However, a search at the BRS shows that the Meralis also have a shareholding in the glass manufacturer through their investment vehicle Zaigham Investments Limited.

Zaigham Investments owns a 50 percent stake in Milly SEZ Limited, giving the Merali family an indirect 50 percent equity interest in the proposed glass-making plant.

Information from the registrar of companies shows that Sameer Telkom Limited owns a 99.9 percent stake in Zaigham Investments Limited, while Sameer Group Chief Executive Sameer Naushad Merali, the son of the late Naushad Merali, owns one ordinary share in Sameer Telkom Limited.

Naushad Merali, the founder of Sameer Group who died in July 2021, was in 2015 ranked by Forbes as the third richest man in Kenya and 48th in Africa with a net worth of $370 million. His heirs, including the son Sameer, have continued to play important roles in managing the family empire.

The Merali family has interests mainly in real estate, agriculture, building and construction, transport, energy and power, industrial parks, telecommunications and insurance through companies like Sameer Africa which is listed on the Nairobi Securities Exchange.

Merali made his wealth by first purchasing unprofitable companies and turning them around in his formative days as an investor. He would then exit at a profit -sometimes attracting criticism when the new buyers failed to profit from the deal.

In recent years, he divested from ICT firms including Swift Global, Kenya Data Networks, KenCell and Equatorial Commercial Bank -raking in billions of shillings in the process.

The family exited its tyre manufacturing business due to high production costs and stiff competition from cheaper imports from China and India. However, the family appears to be warming up to the manufacturing sector.

Milly Glass SEZ says the expansion into specialised glass packaging reflects the rising demand for high-quality packaging within the pharmaceutical sector in East and Central Africa, where local manufacturing capacity remains relatively limited.

The Environmental and Social Impact Assessment (ESIA) report shows the project will leverage advantages such as proximity to the Port of Mombasa, the Standard Gauge Railway and Moi International Airport, and a growing road network, making it ideal for an export-oriented manufacturing model.

‘The project proponent proposed the development facility based on market analysis of demand growth of pharmaceutical glass bottles and the opportunity to construct a new facility that will strengthen their existing glass bottle manufacturing facility in Mombasa,’ reads the ESIA report.

The firm explained that the proposed plant would produce type III glass amber-coloured pharmaceutical glass bottles, which are used for storing, protecting, and transporting the medicine.

The bottles are used for liquids, tablets, capsules, vaccines, and parenteral (injectable) preparations.

Kenya’s Tax Appeal debate isn’t going away. It continues to resurface. Although it was quietly dropped in Parliament, the proposal to amend Tax Procedures Act (TPA) has persistently reappeared in successive Finance Bills since 2024, and the Finance Bill, 2027 may prove no exception.

It seeks to require taxpayers to pay the disputed principal tax, in whole or in part, before filing an appeal against a decision of the Tax Appeals Tribunal (‘Tribunal’ or ‘TAT’), the High Court, or the Court of Appeal.

The latest attempt floated through a supplementary order paper during the Finance Bill, 2026 debate may have been shelved, but the policy question it raises remains far from settled. Currently, the Commissioner is restricted from issuing agency notices against taxpayers who have active appeals before the Tribunal, the High Court, or the Court of Appeal.

At face value, the logic is compelling. The Government is under mounting pressure to raise more revenue in an increasingly tight fiscal environment. While the Kenya Revenue Authority (KRA) exceeded its target in the 2024/2025 financial year collecting about Sh2.57 trillion, performance in the current financial year tells a more nuanced picture.

As per the Statement of Actual Revenues and Net Exchequer released by the National Treasury and Economic Planning in May 2026, collections stood at Sh2.174 trillion against an original estimate of Sh2.627 trillion, reflecting shortfall of about Sh453 billion.

Kenya’s economy grew by 4.7 percent in 2024 and is estimated to have moderated to 4.6 percent in 2025. While this reflects relative resilience, the mild deceleration underscores broader macroeconomic pressures that can dampen revenue performance.

The challenge is not delayed tax disputes, rather it points to a combination of ambitious revenue targets and structural constraints within the economy. In that context, it becomes necessary to ask whether proposals such as ‘pay now, argue later’ are addressing the real problem or merely shifting the burden onto taxpayers.

Proponents of the proposal argue that requiring upfront payment would secure revenue, discourage frivolous disputes, and enhance fiscal predictability. However, beneath this surface logic lies a deeper constitutional and economic tension. Article 47 of the Constitution guarantees every person the right to administrative action that is expeditious, efficient, lawful, reasonable, and procedurally fair. It is not a hollow promise.

It is a safeguard against administrative overreach. Conditioning the right of appeal on prior payment risks undermining that guarantee. Access to justice cannot meaningfully exist where the ability to be heard depends on one’s financial capacity.

In practical terms, the implications are stark. Tax disputes often involve substantial sums, with significant implications for business liquidity.

A prepayment requirement could effectively prevent businesses from pursuing legitimate appeals, not because their cases lack merit, but because they lack liquidity. The result is not efficiency, but exclusion.

In many cases, businesses may be forced to resort to external financing to meet such upfront tax demands. This introduces additional borrowing costs, increases the cost of doing business, and diverts capital away from productive investment. Over time, such pressures can undermine competitiveness and discourage formal sector growth.

More critically, such a policy approach sidesteps the real problem: systemic inefficiency in tax dispute resolution.

While the Tax Procedures Act and the Tax Appeals Tribunal framework prescribe timelines for procedural steps such as filing objections and appeals, they do not impose strict statutory deadlines for the Tribunal to determine cases. In practice, disputes can take years to conclude as they move through the Tribunal, High Court, and Court of Appeal.

Rather than addressing these delays, the prepayment proposal would shift the burden onto taxpayers. It effectively asks them to finance the inefficiencies of the system.

Even more problematic is what happens after the dispute. Section 47 (2) of the TPA provides for refunds of overpaid taxes, but recent amendments introduce a critical caveat: where refunds are not processed within six months from the date of ascertainment, the amounts shall be automatically applied to offset existing or future tax liabilities.

This has institutionalised the use of refund adjustment vouchers (RAVs), meaning taxpayers may not receive cash even after succeeding in their appeals. For businesses without immediate tax liabilities, this strains cash flow and undermines confidence in the system.

If the objective is to unlock revenue trapped in disputes, then the solution lies not in restricting access to appeals but in fixing the structural inefficiencies that cause delays in the first place. A more balanced approach would begin with institutional reform.

As a short-term measure, Alternative Dispute Resolution (ADR) mechanisms should also be strengthened to encourage early settlement of tax disputes, reducing the burden on the courts altogether.

During the 2025/26 financial year, the KRA resolved 993 tax disputes through ADR, unlocking Sh35.062 billion in revenue, according to its Annual Revenue Performance Report. The achievement underscores the effectiveness of ADR in expediting dispute resolution, strengthening taxpayer relations, and facilitating the timely collection of revenue that might otherwise remain tied up in prolonged litigation.

At a broader level, sustainable revenue mobilization will depend on expanding the tax base and supporting economic growth. Bringing more taxpayers into the formal tax net, while fostering an enabling environment for businesses to grow, would reduce the pressure to rely on aggressive or potentially unconstitutional enforcement measures.

As a medium- to long-term reform, Kenya should consider establishing specialized tax divisions within the High Court and corresponding benches in the Court of Appeal, similar to the Constitutional and Judicial Review, Land and Environment divisions.

While this would require time, dedicated resources, and significant institutional investment, the long-term gains in efficiency, consistency, and quality of tax jurisprudence would be substantial. Given the highly technical nature of tax law, dedicated judicial expertise would significantly improve the speed, quality, and consistency of decisions.

This is not a novel proposition. Leading jurisdictions treat tax disputes as a specialised area of law requiring dedicated judicial structures.

The United States of America operates a separate Tax Court with judges experienced in tax matters, while the United Kingdom has established a dedicated Tax Chamber within its tribunal system. Similar specialised tax courts exist in Canada and across parts of Europe. These systems demonstrate that judicial specialisation is a proven tool for improving efficiency and ensuring consistent, high-quality decisions.

Equally important is the introduction of clear statutory timelines for the determination of disputes at each level of appeal. Predictable timelines would reduce delays, accelerate revenue collection, and eliminate the need for coercive prepayment measures.

Ultimately, the recurring reintroduction and withdrawal of the prepayment proposal suggest a policy solution in search of the wrong problem. The Government is right to be concerned about delayed revenue. But requiring taxpayers to pay before they are heard risks undermining constitutional protections, distorting business operations, and eroding trust in the tax system.

There is a better way. Fix the system, not the taxpayer. A tax system that is efficient, predictable, and fair will always collect more because it commands compliance, not compulsion. That is the reform Kenya truly needs.

What does it mean to be literate in Kenya in 2026? For generations, the answer was straightforward, the ability to read, write and perform basic arithmetic. Today, that definition is no longer enough.

A person may read a newspaper yet fall victim to online misinformation. They may own a smartphone but lack the skills to use it for learning, employment or entrepreneurship.

As we mark International Literacy Day, we must move beyond celebrating literacy rates and ask a more fundamental question: Are we giving every Kenyan the knowledge, skills and opportunities needed to participate meaningfully in the economy and society? Literacy is no longer simply an education issue. It is an economic issue, a social justice issue and increasingly, a question of national competitiveness.

Kenya has made significant progress in expanding access to education. According to the Kenya Demographic and Health Survey 2022, 91 percent of women and 94 percent of men were literate. These figures are encouraging, but national averages can conceal the Kenya that is less visible.

The Commission on Revenue Allocation’s State of Inequality in Kenya report, drawing on KNBS data, showed literacy levels ranging from 94 percent in Embu to 81 percent in Samburu. Counties such as Garissa, Tana River, Turkana and Samburu have historically faced some of the greatest educational disadvantages.

Behind these statistics are real children and young people whose circumstances can determine how far their education takes them.

If education is the great equaliser, then education financing must be designed to reach those who have the least ability to finance it themselves. This is why we cannot have a serious conversation about literacy without having an equally serious conversation about financing education. Every level of education matters.

This calls for investment not only in classrooms and teachers, but also in libraries, connectivity, electricity, digital devices, adult education, TVETs and innovative education financing models. The journey from literacy to prosperity is neither automatic nor guaranteed.

But without a literate, educated and skilled population, that journey becomes harder.

In today’s economy, we must therefore speak not only about reading and writing, but also about digital literacy, financial literacy, health literacy, media and information literacy, data literacy, scientific literacy and civic literacy.

Early childhood education establishes the foundation for learning; primary education develops foundational literacy and numeracy; secondary education builds knowledge and prepares learners for further training. TVET equips young people with practical and technical competencies, while universities and postgraduate institutions produce professionals, researchers, innovators and future leaders. A weakness at one level eventually manifests itself at another.

A child who fails to acquire foundational literacy is likely to struggle later. A young person who cannot access secondary education has fewer opportunities to acquire advanced skills. Likewise, a student who qualifies for university or TVET but cannot afford tuition, accommodation, books or basic upkeep may never get the opportunity to convert potential into productivity. Education financing should therefore not be viewed merely as a budgetary expense. It is an investment in Kenya’s productive capacity.

The responsibility of government, education institutions, development partners, the private sector and society at large is therefore to ensure that financial circumstances do not become the ceiling on a person’s aspirations.

There is also a compelling economic argument for investing in education and human capital. Countries such as Singapore, Finland and South Korea followed different development paths, and their success cannot be attributed to literacy alone. However, each placed education, skills development and human capital at the heart of national transformation.

The lesson for Kenya is not to copy another country’s education system, but to recognise that sustained investment in people creates the capabilities needed to move economies from low-productivity activities towards higher-value production, innovation and technology.

The World Bank estimates that, globally, each additional year of schooling is associated with an average 9 per cent increase in hourly earnings. Education also contributes to long-term economic growth, innovation, stronger institutions and social cohesion.

A literate and skilled population is better positioned to participate in formal employment, entrepreneurship, agriculture, manufacturing, financial markets, technology and the digital economy. Education gives people not only knowledge, but also the capacity to make better decisions, adapt to change and create opportunities.

The smartphone has become a classroom, workplace, bank, marketplace and information centre. But access to technology alone is not enough. Young people must know how to use technology productively and safely. Citizens must be able to distinguish credible information from misinformation.

Workers must be prepared to learn new technologies throughout their careers, while entrepreneurs must understand digital finance and markets.

Kenya must consequently move from a narrow conversation about literacy rates to a broader national commitment to lifelong learning and functional literacy. And if we are serious about this, we must take literacy to the margins.

Educational opportunities cannot be concentrated only where schools, universities, libraries and technology already exist. We must deliberately reach arid and semi-arid counties, informal settlements, remote rural communities, refugee-hosting communities and other areas where poverty, geography, disability, gender and social exclusion continue to limit access to learning.

A talented young person in Nairobi may access a university, TVET institution, online course or digital library with relative ease, while another equally talented young person in Turkana, Marsabit, Mandera, Wajir or Tana River may face entirely different barriers.

HELB’s mandate sits squarely within this national mission. Since its establishment, the Board has evolved from supporting a relatively small number of students into a major pillar of Kenya’s higher education financing ecosystem.

HELB has empowered more than 1.23 million students through its financing programmes. Every time financing enables a young Kenyan to enter university, TVET or another professional programme, we are helping build an individual who can participate more effectively in the economy.

Every student who acquires a technical skill, professional qualification or advanced area of knowledge becomes part of Kenya’s human capital. When graduates enter the workforce, establish enterprises, innovate, pay taxes, employ others and contribute to their communities, the original investment in education begins to multiply. That is the real return on education financing.

But access alone is not enough. We must also ask what learners are being taught and whether those skills can translate into productive livelihoods. Kenya’s universities and TVET institutions must remain connected to the changing needs of the economy. Training must respond to emerging opportunities in artificial intelligence, cybersecurity, renewable energy, advanced manufacturing, healthcare, agritech, financial technology and the creative economy.

We need graduates who can read and write, but also analyse, create, innovate, communicate, collaborate and solve problems. We need young people who can use technology rather than merely consume it. We need citizens who can navigate an increasingly complex information environment confidently and responsibly.

The Tax Appeals Tribunal has faulted the Kenya Revenue Authority (KRA) for classifying a cake-making additive imported by a local company, Palsgaard Kenya Ltd, without laboratory testing.

The Tribunal overturned KRA’s tariff decision, saying the authority could not sustain a different classification after acknowledging that its laboratory could not accurately analyse the product.

While allowing the company’s appeal, the Tribunal said KRA relied on the product’s use as an emulsifier and stabiliser in cake production to classify it as a food preparation, without producing contrary chemical or technical evidence.

The dispute concerned two consignments of the cake-making additive the company imported. KRA partially verified the consignments and found their quantities and value satisfactory, but did not verify their tariff classification before issuing its rulings on August 14, 2025.

Palsgaard declared the product under a customs classification code covering organic surface-active agents.

KRA instead classified it under a code covering preparations used in manufacturing beverages and food. It subsequently issued its tariff rulings and upheld the same after Palsgaard sought a review.

Palsgaard appealed after KRA rejected its objection. The company said the product was potassium stearate in glycerol, used in small quantities as an emulsifier and stabiliser to provide stable cake gel, improve whipping performance and extend shelf life.

Palsgaard said the product was not itself a food preparation. It asked the Tribunal to set aside KRA’s decision and classify the product as an organic surface-active agent or as a chemical preparation not elsewhere specified.

KRA relied on the supplier’s technical datasheet and argued that the product was a food additive and key ingredient in cake production.

The authority also argued that glycerol had nutritional value and contained calories, supporting its treatment of the product as a food preparation. However, KRA acknowledged that its laboratory equipment was insufficient to analyse the product accurately.

The Tribunal found that the evidence showed the product was neither cake gel nor a finished or semi-finished food preparation. It said there was no evidence that it contained flour, sugar, milk or another foodstuff.

‘A chemical preparation used by a food manufacturer does not necessarily become a food preparation under heading 21.06,’ the Tribunal said.

It added: ‘The words ‘used in the making of’ in the explanatory material to heading 21.06 cannot be read so broadly as to absorb every chemical additive employed in food manufacture.’

The Tribunal also found that Palsgaard had produced evidence on the product’s composition, physical character and technical function, while KRA had not produced contrary chemical or technical evidence.

In addition, the Tribunal said the evidential burden therefore shifted to KRA to explain why the product belonged under the food-preparation heading. It found that the authority failed to do so.

‘The respondent should have conducted lab tests on the product,’ the Tribunal said, noting that Chapter 34 of the Harmonized System (HS) customs classification contains specific tests for determining whether a product is an organic surface-active agent.

It held that KRA had wrongly classified the imports as food preparations used in manufacturing food and beverages instead of organic surface-active agents. It allowed Palsgaard’s appeal and set aside the KRA’s September 22 review decision.

Greek multinational Amaco Energy Group has partnered with US energy equipment and services company, GE Vernova, to provide gas turbines for its proposed $1.5 billion (Sh194.2 billion) artificial intelligence (AI) data centre in Mombasa.

The deal will see Amaco integrate GE Vernova gas turbines into the Greek firm’s power barge. A power barge is an unmotorised floating platform housing a power plant used to generate electricity for local or national grids.

Amaco plans to build the AI data centre, dubbed Hercules, to tap East Africa’s growing demand for computing infrastructure. The facility is expected to combine a large data-centre operation with an independent power-generation system.

‘Amaco-Hercules has entered into a cooperation agreement with General Electric that will see it integrate GE Vernova gas turbines into the Hercules power barge facility, with the possibility of other GE Vernova technologies, including electrification and digital solutions, being integrated as the platform develops,’ Amaco said in a statement.

Amaco has identified Dongo Kundu and Kilindini in Mombasa as potential locations for the data centre, citing proximity to the Mombasa port and capacity uptake by firms at the nearby Special Economic Zone.

GE Vernova is the world’s largest manufacturer of large gas turbines, with more than 7,000 turbines representing over 800 gigawatts (GW) of capacity across more than 120 countries.

The current industrial development pipeline indicates about 75 megawatts (MW) of potential base-load demand, primarily from heavy industry, with another 75-100MW potentially coming from initial data-centre customers.

Amaco CEO Theodore Theodoropoulos has held talks with Kenyan government officials for approval of the project and met ICT Cabinet Secretary William Kabogo last month.

The meeting came as Kenya begins licensing commercial data centres. The Communications Authority of Kenya (CA) has put the centres under the telecommunications licensing regime, a shift from previous rules, which did not expressly recognise the facilities.

The regulator has also proposed a standalone licence for the centres, removing them from the permit category they are currently licensed under alongside telcos.

Amaco has not disclosed the facility’s construction timeline or final capacity. The planned facility is an independently powered centre that does not rely on Kenya’s electricity grid.

The company previously said the system has the potential to contribute significant additional power-generation capacity to support Kenya’s broader energy requirements.

Kenya has seen increased interest from multinationals seeking to set up data centre infrastructure, driven by rising demand for cloud computing, AI, digital finance, and other internet services.

Data centres are the main infrastructure powering AI by providing high computing power, specialised computer hardware, and the large storage needed to train and deploy complex language models.

This week, US firm Digital Realty, one of the world’s largest data centre companies, opened a second facility in Nairobi, increasing its existing campus’ capacity by 6.4 MW.

Currently, the construction of a Sh129.5 billion ($1 billion) Microsoft data centre in Nakuru County has been delayed after Kenya disagreed with the US tech giant over a request for guaranteed uptake of cloud capacity.

In May 2024, Microsoft partnered with UAE-based AI firm G42 to invest in the mega data centre as part of its efforts to expand cloud computing services in East Africa.

However, the facility’s upgrade to require 1,000 MW of power from the initial 60MW for regional use has spooked Kenya, which reckons it lacks electricity capacity to support the project.

Data centres consume immense power because they operate thousands of servers to process and store data. They also require large volumes of water for cooling systems that prevent overheating.

Large data centres often consume as much electricity as a small city.

Amaco has said the Mombasa project will use an offshore liquefied natural gas-powered electricity supply to power the data centre without straining local electrical grids.

The energy system processes natural gas and combines electricity generation and cooling systems into a single platform.

Other major companies that operate smaller-scale data centres in the country include EADC Liquid, iColo, Africa Data Centre, COMTEC, Access, Safaricom, MTN Business, and Telkom Kenya.

The High Court has certified as urgent a petition challenging the appointment of James Mworia as the founding chief executive officer of the National Infrastructure Fund (NIF).

The court directed petitioners Javan Onyango and Emmanuel Kiplagat to serve the petition and related documents on the NIF Board, Treasury Cabinet Secretary John Mbadi, Attorney-General Dorcas Oduor and Mr Mworia. The case will be mentioned on September 21 for directions.

The petition argues that Mr Mworia was appointed CEO while serving as an independent director of the same board that recruited him, creating a conflict of interest and a reasonable apprehension of bias.

The petitioners claim the recruitment was ‘competitive only in form but predetermined in substance’, contrary to the Constitution and the National Infrastructure Fund Act, 2026.

They also question the recruitment timeline, saying the board was constituted on July 8 and advertised the CEO position days later, giving applicants only about 17 to 18 calendar days to apply before the July 31 deadline.

According to the petition, the short application period disadvantaged candidates who had to obtain clearance certificates from the Kenya Revenue Authority, Higher Education Loans Board, Ethics and Anti-Corruption Commission, Directorate of Criminal Investigations and a registered Credit Reference Bureau.

The petitioners further fault the board for failing to publish the names of applicants or shortlisted candidates, arguing that this denied the public an opportunity to scrutinise whether the recruitment complied with constitutional requirements on transparency, gender balance, ethnic diversity and regional representation.

They argue that unless the court intervenes, Mr Mworia will continue exercising extensive powers under the NIF Act.

Trusts will now be required to reveal their ultimate beneficiaries under the newly passed law that seeks to curb money laundering and illicit financial flows as Kenya pushes to exit the global dirty-money grey list.

President William Ruto signed the Trust Administration Bill, 2026 into law on Tuesday.

A trust is a legal arrangement where a person transfers property or assets to a trustee who holds and manages them for the benefit of specific beneficiaries.

Information on beneficial owners will include the residence of the trustees and their equivalents and any assets held or managed by the financial institution or designated non-financial businesses and professions.

‘All trusts incorporated before the commencement of this Act shall lodge with the Registrar a copy of the register of beneficial owners within twenty-four months of coming into force of this Act,’ reads the Act.

The data on beneficial ownership will be accessible to authorities such as the Financial Reporting Centre (FRC) and reporting institutions, including financial institutions and designated non-financial businesses and professions.

The new law ushers in a race for compliance among trusts, with both newly established and existing ones required to meet registration, record-keeping and beneficial ownership disclosure requirements.

For existing trusts, the law provides a 24-month transition period from the date the Act comes into effect to comply with its requirements.

Trusts in Kenya were being governed mainly by the Trustees (Perpetual Succession) Act, which did not compel those registering and overseeing such entities to disclose beneficial owners. The gap had left room for use of such vehicles for money laundering and terrorism financing.

The FRC had flagged the repealed laws as part of the weak link in Kenya’s fight against money laundering and terrorism financing as the country races to exit the Financial Action Task Force (FATF) grey list.

Kenya was grey-listed in February 2024 following a 2021 mutual evaluation by the Eastern and Southern Africa Anti-Money Laundering Group , which found gaps in compliance with global standards, including on transparency and beneficial ownership of trusts.

The new law is intended to make it harder for individuals to hide assets or the ultimate beneficiaries of trusts behind layers of legal ownership.

Trustees will be required to maintain accurate and up-to-date records on beneficial owners and make the information available to relevant authorities when required. In addition, they will have to retain the information for at least seven years.

Improved access to beneficial ownership information will enhance the ability of regulators and law enforcement agencies to detect and investigate financial crimes, including money laundering and terrorism financing.

Kenya was rated as ‘partially compliant’ with FATF recommendation 25, which relates to the transparency and beneficial ownership of trusts, pointing to gaps that needed to be addressed to fully meet international standards.

The global watchdog required Kenya to review its legal regime governing the operations of trusts, including designating a competent authority to regulate trusts, maintaining accurate and up-to-date beneficial ownership information on trusts and setting sanctions for non-compliance.

Under the new law, trusts will be required to be registered in a centralised database, marking a shift from the fragmented framework that had been criticised for enabling opacity in ownership structures.

The FRC had told Parliament that the Bill, which is now law, ‘largely addresses the international standards required of countries by ensuring transparency and beneficial ownership aimed at protecting against the abuse of corporate structures to perpetrate money laundering and terrorism financing.’

The law also introduces penalties for non-compliance. For instance, individuals who fail to maintain beneficial ownership records will be fined up to Sh500,000, while corporate entities will be penalised up to Sh2 million.

Failure to provide the information to enforcement agencies attracts higher penalties of up to Sh1 million for individuals and Sh3 million for corporate entities.

Kenya’s inclusion on the FATF grey list increased pressure on authorities to implement reforms within set timelines and exit the grey list, which exposes the country to reduced investor confidence and tighter scrutiny in international financial markets.

The industrial action by aviation workers that disrupted operations across all airports in Kenya was more than an industrial-relations dispute. It exposed a larger question: Can Kenya protect and strengthen its position as East Africa’s aviation, trade and logistics gateway?

Workers have a legitimate right to collective bargaining, fair pay, decent working conditions and a voice in decisions affecting their employment. Those rights must be respected. Employers and the government also have a responsibility to negotiate in good faith, honour agreements, provide safe workplaces and address legitimate grievances before they escalate into strikes.

At the same time, workers and their unions have a responsibility to consider the wider consequences of industrial action, particularly in a strategic sector such as aviation.

The debate cannot stop at how much workers should be paid. It must also ask what value is being created, what productivity gains accompany higher remuneration, what disruption costs the wider economy and what happens when passengers, airlines and investors begin choosing alternative gateways.

At the centre of Kenya’s aviation sector is JKIA. JKIA is not merely an airport, it is a critical national economic asset.

The International Air Transport Association estimates that aviation and aviation-related tourism generate about $3.3 billion annually in economic activity in Kenya-equivalent to 3.1 per cent of GDP-and support approximately 460,000 jobs. Kenya’s aviation system also handles about 380,000 tonnes of air cargo, making it an important freight gateway.

When an airport stops functioning efficiently, the effects extend far beyond delayed flights. A missed connection can mean a lost business meeting. A delayed shipment can interrupt production. A stranded tourist can disrupt an entire holiday itinerary.

For such travellers, a prolonged delay is far more than a minor inconvenience; it can impose substantial economic and human costs through lost productive time, foregone income, missed business or investment opportunities, disrupted education, and irreversible personal consequences.

A passenger may be travelling for medical treatment, accompanying a critically ill relative, reporting to university, securing a business contract, or attending a funeral. In such circumstances, disruption may mean a lost livelihood, a missed opportunity, deteriorating health, or, in extreme cases, loss of life.

That is why the conversation must include not only workers and management, but also passengers, airlines, businesses, investors, tourism operators, cargo companies, healthcare providers and taxpayers.

The strategic danger Kenya cannot ignore

The most important question is not only what happens to JKIA during a dispute, but whether the airport can remain competitive in the years ahead.

Nairobi’s location, Kenya Airways’ network, JKIA’s established infrastructure and Kenya’s relatively diversified economy have made Nairobi a natural regional hub.

But geography is an advantage, not a permanent entitlement.

Other African countries are investing heavily to turn geographical advantages into durable competitive positions.

Ethiopia, for example, is building an aviation ecosystem around Ethiopian Airlines and major airport infrastructure at a cost of $12.5 billion. The proposed Bishoftu International Airport, about 40 kilometres from Addis Ababa, is designed to handle 60 million passengers annually in its first phase and up to 110 million in the long term. The African Development Bank has committed $500 million and is expected to help mobilise further financing.

This investment is taking place alongside the expansion of Ethiopian Airlines, whose revenues reached US$7.6 billion in the financial year ended June 2025. IATA estimates that aviation already supports about $2 billion in economic activity and 527,000 jobs in Ethiopia, with passenger demand expected to grow sharply over the next two decades..

Ethiopia is not waiting for a hub to emerge. It is deliberately building one.

Rwanda is pursuing a similar strategy. It is developing the New Kigali International Airport at Bugesera as a regional passenger and cargo hub, with substantial investment from Qatar and the Rwandan government. Rwanda is also expanding RwandAir as part of an integrated aviation strategy.

The message from Addis Ababa and Kigali is clear: Aviation is being treated not simply as an airport operation, but as an economic-development strategy. To this end, Kenya must respond accordingly.

Infrastructure is necessary, but not sufficient

Kenya recognises the need to modernise JKIA. In June 2026, the government signed a $1.2 billion agreement to expand and upgrade the airport, with the stated aim of increasing annual passenger capacity from approximately 7.5 million to 22 million. The project includes a new terminal, upgrades to existing facilities and improvements to airside and landside operations

That investment is important, but infrastructure alone will not secure JKIA’s future.

A competitive airport also requires reliable air-traffic management, efficient ground handling, predictable immigration and customs procedures, modern digital systems, professional management, competitive costs, safety, punctuality and strong customer service.

It requires a workforce whose productivity matches its remuneration.

But productivity cannot be demanded in isolation. Workers need adequate staffing, functioning equipment, appropriate technology, effective supervision, safe working conditions and clear operational systems. Where those conditions are absent, management and government must accept responsibility rather than attributing every failure to employee performance.

The question is therefore not whether aviation workers deserve better pay.They do.

The harder question is: What productivity, service quality and measurable public value should accompany higher pay-and what resources must management provide to make those improvements possible?

Kenya should consider linking part of future remuneration improvements to clearly defined performance indicators, provided those indicators are negotiated transparently and applied fairly.

Airport workers and management could agree on targets covering passenger-processing times, aircraft turnaround, baggage handling, cargo throughput, safety, service reliability, revenue collection and customer satisfaction.

Such targets should not become a mechanism for arbitrary punishment or unilateral wage reductions. They should be based on reliable data, take account of factors outside workers’ control and be accompanied by investment in equipment, staffing and training. Where productivity gains are achieved, workers should share in the resulting benefits.

Collective bargaining should therefore connect remuneration, institutional performance and working conditions without reducing labour relations to a simple exchange of higher pay for higher output.

This is not an attack on workers. A productive workforce is more valuable-and therefore more defensible-than one whose wage demands are repeatedly disconnected from institutional performance. But a productive workforce also deserves competent management, safe conditions and a fair share of the value it helps create.

The bigger economic question

The dispute also reflects a broader national weakness. Kenya has become adept at debating how to share the cake, but less focused on how to make it bigger.

Public debate repeatedly returns to salaries, allowances, benefits and revenue allocation. Less attention goes to productivity, investment, innovation, export competitiveness, private-sector growth and efficient infrastructure.

Yet government cannot sustainably raise compensation unless the productive economy expands enough to finance it.

The choice is not between workers and government. It is between a larger, more productive economy that can reward its people sustainably and a stagnant fiscal base over which distributional battles become increasingly intense.

That is why public-sector pay should be discussed not only as an industrial-relations issue, but also as a question of economic architecture.

However, fiscal discipline must not become a pretext for indefinite wage suppression. If the state expects restraint from workers, it must demonstrate restraint in other areas, improve revenue management, reduce waste, honour negotiated agreements and explain clearly how public resources are being allocated. Workers are more likely to accept productivity-linked reforms when they trust that the benefits will not be absorbed by inefficiency, corruption or poorly managed procurement.

A credible productivity compact must therefore apply to the whole institution-not only to employees.

The passenger must remain central

The customer is often missing from industrial disputes, yet aviation customers have choices.

Airlines can reroute. Travellers can choose different connections. Multinational companies can base regional operations around more reliable hubs. Cargo can move through alternative gateways.

Once such decisions become routine, recovering lost traffic can be difficult.

Aviation hubs are built on confidence. Passengers must trust that they will depart on time. Airlines must know that their aircraft will be handled efficiently. Cargo operators need predictable movement. Investors need confidence that infrastructure will function. Tourists and business travellers need reliable connectivity.

A hub is ultimately a promise of connectivity, and every major disruption weakens that promise.

This does not justify suppressing legitimate labour action. Nor does it mean that passengers should be used to delegitimise workers’ grievances. It does, however, require disputes in nationally critical infrastructure to be addressed early, through credible negotiation, mediation and dispute-resolution mechanisms, before an entire economic ecosystem becomes collateral damage.

The government and airport management should also maintain effective contingency plans so that essential services continue during disputes. Business continuity is not a substitute for fair labour relations, but neither should the absence of contingency planning be used to shift the full cost of a dispute onto passengers and the wider economy.

Kenya needs a new social compact

The lesson from the JKIA dispute is not that workers should stop demanding better pay. It is that pay, productivity, working conditions and national competitiveness must be addressed together.

Kenya needs a social compact in which:

Workers demand fair remuneration while championing productivity and protecting the quality of essential services.

Management demands performance while providing the tools, staffing, safety standards and infrastructure needed to deliver it.

Government negotiates fairly, honours agreements and protects the national economic interest without undermining workers’ constitutional rights.

Unions defend workers while recognising the wider cost of disrupting critical infrastructure and using strikes as a last resort after meaningful negotiation and mediation.

Investors provide capital while accepting obligations of efficiency, transparency and accountability.

Customers are treated not as collateral damage, but as the ultimate beneficiaries of a functioning public service.

Independent dispute-resolution institutions help ensure that disagreements are settled through credible processes before they escalate into national disruption.

The most constructive demand Kenya could hear from public servants is not simply: ‘Pay us more.’

It is:

‘Give us the infrastructure, technology, skills and systems we need to deliver more-and reward us when we do.’

But employers and government should answer with an equally important commitment:

‘We will provide the conditions, resources and accountability needed for you to deliver-and we will negotiate fairly when the value created increases.’

Kenya does not have to choose between workers’ rights and national competitiveness. It needs both.

But competitive advantage must be earned every day. Ethiopia is investing. Rwanda is investing. Other African economies are positioning themselves for the aviation growth that IATA expects across the continent.

Africa’s aviation market is projected to expand strongly over the next two decades. The opportunity is substantial, but Kenya’s share is not guaranteed.

The question facing Kenya is therefore larger than the current strike:

Will the country defend the advantages of yesterday, or invest, reform and improve productivity to compete for tomorrow’s opportunities?

JKIA can remain East Africa’s gateway. But it will not do so merely because Nairobi is well located.

It will remain the gateway only if Kenya makes it the region’s most reliable, efficient, competitive and customer-focused hub.

That requires more than negotiating the next salary increment. It requires fair labour relations, competent management, accountable public investment and a workforce equipped to deliver high-quality services.

It requires Kenya to start baking a bigger cake-and ensuring that those who bake it share fairly in its growth.