Category: Business Daily

State House, the Ministry of Defence and the National Treasury were among the biggest drivers of the Sh203 billion recurrent budget burst in the financial year ended June 2026, with Treasury Cabinet Secretary John Mbadi now pushing for a law to better align expenditure with project plans.

Treasury figures show expenditure on day-to-day operations such as salaries, utility bills and routine maintenance reached Sh1.673 trillion in financial year 2025/26 against an original estimate of Sh1.470 trillion.

This marked the widest divergence in at least five years, underlining the growing role of mid-year budget revisions in government spending.

The gap between original budgets and actual recurrent expenditure more than doubled from Sh94.21 billion in fiscal year 2024/25 and was significantly higher than Sh57.26 billion in 2023/24, Sh43.17 billion in 2022/23 and Sh99.35 billion in 2021/22.

The figures compare original budgets with actual cash disbursements from the Treasury and, therefore, do not reflect supplementary budgets approved by Parliament in April and June.

Some of the largest spending revisions in the review year occurred in departments at the heart of government, underscoring the scale of adjustments made after Parliament approved the original budget.

The Ministry of Defence accounted for one of the largest upward revisions, receiving an additional Sh24.43 billion above its original allocation. The National Treasury followed with Sh24.94 billion, while Internal Security received Sh18.01 billion and the National Intelligence Service Sh13.5 billion.

State House’s recurrent allocation was revised upwards by Sh9.57 billion, while the National Police Service received an additional Sh9.11 billion. The Executive Office of the President (Sh2.32 billion), the Office of the Deputy President (Sh2.30 billion) and the Office of the Prime Cabinet Secretary (Sh272.3 million) also received higher allocations during the year.

The scale of the revisions highlights how substantially government spending plans can change after the original budget is approved, a weakness Mr Mbadi says stems from the absence of a legal framework linking national planning with budgeting.

“I have actually been a proponent of proper planning,” the Treasury CS said last month while outlining the planned reforms. “The problem that we have in our budgeting process is that we are not linking plans to budgets.”

The proposed Planning Bill is intended to guide preparation of future budgets by embedding long-term financial planning and priorities into the budget-making process before allocations are presented to lawmakers for public participation, debate and approval.

“You will hear a lot about what we are planning to do and introduce the Planning Bill. Remember in this country, we have laws governing public finance management, we have laws governing procurement, laws guiding asset management, but we don’t have any law on national planning,” Mr Mbadi said.

“If you don’t plan well, then you cannot have a good budget and even a good financial plan.”

The revisions illustrate the planning gaps that the proposed law seeks to address by ensuring government priorities, expenditure estimates and financing plans are better aligned before the Treasury submits the budget estimates to Parliament.

Treasury records show the higher spending was subsequently accommodated through revised budgets approved by lawmakers, bringing final allocations broadly into line with actual issues from the exchequer.

The Constitution allows limited flexibility for such spending adjustments during budget implementation. Article 223, operationalised through Section 36(9) of the Public Finance Management (National Government) Regulations, permits State offices to spend up to 10 percent more than the cash approved by the National Assembly under specified circumstances.

The Constitution requires the National Treasury to table before Parliament a supplementary appropriation Bill within two months after money is withdrawn from the Consolidated Fund without prior approval by lawmakers.

The Public Finance Management regulations also prohibit Parliament from approving supplementary allocations exceeding 10 percent of the approved budget estimates of a programme or sub-vote unless the expenditure is required to address an unforeseen and unavoidable need.

Mr Mbadi said the government had sought to make the 2025/26 budget more realistic by capturing expected expenditure more comprehensively than in previous years.

“I want to point out that last year, if you noticed, we tried as much as possible to capture most of the expenditure and align the budget to realities.”

He maintained that unexpected events nevertheless made supplementary budgets necessary, with the spending eventually expanding 13.81 percent, or a record Sh203 billion.

“Were it not for some disruptions that we have seen, especially the war in the Middle East and a bit of underperformance by KRA, there was going to be no need really for a supplementary budget.”

The renewed focus on planning also comes against President William Ruto’s pledge to end the long-standing practice of financing day-to-day government operations through borrowing.

“The government should never borrow to finance recurrent expenditure. It is not right, it is not prudent, and it is not sustainable. It is simply wrong. We must bring ourselves and our country to sanity,” President Ruto said in his inaugural address to a joint sitting of the National Assembly and Senate in September 2022.

“Over the next three years, we must reverse this and go back to a situation where the government contributes to the national savings effort by keeping recurrent expenditure below revenue levels,” the President added.

For three years, Evans George spent long days and late nights preparing banquet dinners, soups and other meals for presidents, the First Family, diplomats and visiting dignitaries.

“It was a fixed-term contract. I was attached to the sauce station-the section of the kitchen responsible for hot sauces, gravies and sautéed dishes-and reported to the Executive Chef, who approved every menu served at the president’s table,” George says.

Before joining the State House kitchen, George worked at Muthaiga Country Club. When the Covid-19 pandemic struck, he was among thousands of hospitality workers who lost their jobs.

“The hospitality industry was badly hit during Covid-19. Our jobs became very unstable, and many of us had to leave. That’s when I learnt about the State House opportunity, applied and got hired,” he says.

Cooking for presidents who dislike spices

George says the State House kitchen employs numerous chefs, each assigned to a specialised section, including sauces, starches, soups and starters. They all report to the Executive Chef, who in turn reports to the Director of State House Hospitality.

He says maintaining the highest standards of hygiene, consistency, timing and perfection are non-negotiable.

“We have to be top-notch all the time. Those are the non-negotiables.”

George’s day often began at 4am with planning meetings involving the entire kitchen team. Chefs from each section presented their proposed menus before submitting them to the Executive Chef for approval. Once reviewed, the final menu was issued for preparation.

“The Director of State House Hospitality gave us the following day’s programme early enough for us to prepare and align,” he says.

“If breakfast had to be ready by 6am, we’d report by 4am. Once breakfast was served, some chefs remained on service while the rest immediately started preparing lunch.”

The pace rarely slowed, especially during official functions.

“The State House kitchen is always busy. There is always something happening. If we weren’t preparing meals for visiting dignitaries or VIPs, we’d be serving local guests invited by the president.”

Whenever larger functions were held, outside caterers handled the bulk of the guests, allowing the in-house chefs to concentrate on the presidential table.

What surprised George most was not the grandeur of cooking for heads of state, but their surprisingly simple tastes.

“I had worked at Muthaiga Country Club, where many fine diners appreciated artistic presentation and complex flavours. I assumed presidents would be the same. But to my surprise, some preferred food prepared in the simplest way possible, with no spices at all. It didn’t matter whether the spices were organic.”

For a chef trained to see food as a canvas, preparing plain dishes became a test of skill.

“As chefs, we love to experiment because cooking is an art. But for such presidents, you don’t. You follow the instructions exactly. Imagine preparing a meal with no heavy seasoning or elaborate flourishes-just natural cooking while ensuring the perfect balance. That’s not easy. It takes real skill because you’re not cooking for just anyone.

“If it’s beef, for example, they may want it roasted or simply boiled. That’s where your expertise comes in. How well can you roast or boil it? What temperature do you use to preserve the full flavour while ensuring the meat is tender?”

George says roasted lamb ribs were among the presidents’ favourite dishes.

“Roasted lamb ribs rarely missed from the president’s menu, together with ugali and kienyeji vegetables. Whenever there were no roasted lamb ribs, you could tell the president didn’t enjoy the meal as much, even if there were other meat options. If ribs weren’t available, we’d serve roasted lamb chops instead.”

Hosting foreign leaders

State visits required an even broader culinary repertoire.

“If, for example, the Italian president was visiting, we’d include Italian dishes alongside Kenyan cuisine.”

George says he frequently worked alongside foreign chefs because visiting leaders often travelled with their own culinary teams.

“They’d come into our kitchen, and we’d prepare the meals together while providing locally available ingredients.”

An invisible layer of security

Cooking inside State House involved far more than culinary expertise.

“We weren’t allowed to use our phones while working. Everyone required security clearance. Security officers monitored every movement. They stood in the kitchen throughout the preparation process. They wore plain clothes and sharp suits. We used to call them the ‘Men in Black’.”

Security became even tighter once the food was ready.

According to George, after the buffet was set, a specialised food-safety team quietly collected samples of every dish before any food could be served.

“The protocol is even stricter during functions held outside State House. Nothing is served until the food has been cleared.”

Travelling with the president

Do Kenyan presidents travel with chefs?

“Yes. The Executive Chef selects the team that accompanies the presidency on foreign trips and approves all the food supplies needed. One item we never travelled without was several packets of maize flour.”

During his State House career, George travelled to Burundi, South Africa and China, among other destinations.

“I loved the China trip because I learnt so much. I was exposed to Chinese cuisine and picked up techniques that I still use today. We also learnt that the Chinese president’s favourite dish is seafood.”

Looking back, George says the greatest reward was not the prestige but the experience.

“For me, it will always be about the exposure and the experience I gained. It’s not every day that a chef gets the opportunity to serve the president, the First Family and other high-profile dignitaries almost every day.”

About 17.6 percent of employees in top firms are casual workers, as firms increasingly turn to contract staff to control costs.

Official statistics from the Kenya National Bureau of Statistics (KNBS) show that individuals engaged in casual employment grew from 416,900 in 2020 to 582,900 in 2025, accounting for 17.6 percent of the 3.32 million formal sector workers.

This comes at a time when Kenya’s soft economy has made firms reluctant to step up hiring and increase wages to cover inflation.

The trend of firms slowing down on permanent hires has seen the share of casual workers in formal office and factory jobs rise gradually from 15.2 percent in 2020 to 17.6 percent last year.

A casual worker, according to the Employment Act, 2007, is an individual whose terms of engagement involve payment at the end of the day and who is not engaged for a period beyond 24 hours at a particular time.

Hired on short-term contracts, casual workers fill production quota gaps by working long hours for low wages, often without pensions, health insurance or access to loan facilities, lowering labour costs for employers.

Pension and housing levies have recently emerged as key drivers of operational costs following additional obligations on workers for the two items.

The Affordable Housing Act requires employers in the formal and informal sectors to deduct 1.5 percent of gross monthly pay from workers and match the contributions towards the housing levy.

Contributions to the National Social Security Fund (NSSF) have also increased from as low as Sh200 to up to Sh6,480 under the latest updated rates.

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

The contribution rate remains at 6 percent for both employers and employees, raising the maximum employee contribution from Sh4,320 to Sh6,480 per month.

KNBS data shows that salary rises in 2025 surpassed inflation for the first time in six years, despite employers offering workers smaller pay increases.

Inflation-adjusted earnings, or real wages – a barometer for measuring employees’ purchasing power – grew by 2.0 percent last year, marking the first time since 2020 that growth in workers’ earnings has surpassed the increase in consumer prices.

Consequently, a regularly paid worker, or wage employee, saw their monthly real earnings increase marginally to Sh56,566 last year from Sh55,450 in 2024.

The earnings are, however, still lower than in 2020, when they stood at Sh62,256, meaning workers’ earnings have suffered an erosion of Sh5,690 compared with six years ago.

Workers’ real wages had fallen for five consecutive years, including a negative 0.3 percent in 2024.

The positive real wage growth came in a year when economic growth slowed to 4.6 percent, little changed from 4.7 percent in 2024, pulled down by reduced activity in the agriculture sector.

Public employees, however, continued to bear the brunt of the high cost of living, with their real wages falling further to Sh50,041 last year from Sh51,191.67 in 2024.

President William Ruto’s government has cited stable inflation and exchange rates as some of its key achievements, noting that they have laid a sound macroeconomic foundation for growth.

The World Bank has downgraded Kenya’s growth forecast to 4.4 percent from 4.9 percent for 2026, weakening the economy’s ability to generate jobs and pay higher salaries, even as inflation is expected to erode workers’ earnings.

KCB Bank Kenya has received Sh12.9 billion financing from the European Bank for Reconstruction and Development (EBRD) for onward lending to women and youth-led business and green enterprises.

The lender, part of KCB Group, said 35 percent of the facility will be directed towards women and youth-led enterprises, while 30 percent will finance eligible green investments, enabling businesses to adopt climate-smart technologies and sustainable business practices.

This is the first investment made in the country’s banking sector by the London-based EBRD since its formation in 1991 and with a membership of 77 countries.

“This investment marks our first investment in Kenya’s financial sector. By partnering with KCB Bank, we are helping to channel much-needed financing to micro, small and medium enterprises (MSMEs), the engines of job creation and economic growth,’ said EBRD’s managing director for sub-Saharan Africa, Dr Heike Harmgart

‘We are particularly pleased that this facility will contribute to the transition to a greener economy and will expand opportunities for women and young entrepreneurs, whose success is critical to Kenya’s long-term prosperity,” he added.

The loan is the latest to be received by KCB targeting women and youth who are considered disadvantaged in accessing credit. Other international lenders that have partnered with the bank include British International Investment (BII) with a Sh12.9b billion facility last year and European Investment Bank (EIB) with a Sh32 Billion facility in 2024.

Lack of access to collateral is cited as the main hindrance to women and youth getting credit from banks. Most assets acceptable as loan collateral are registered under men. The government has in the past made efforts to address the same using special funds as the Youth Enterprise Development Fund, Women Enterprise Fund and Hustler Fund but with limited success.

‘This facility will strengthen our capacity to extend affordable financing to SMEs particularly those who have traditionally faced barriers in accessing credit,’ said KCB Bank Kenya Managing Director, Annastacia Kimtai.

KCB Kenya had a loan book of Sh1.17 trillion as at the end of March this year compared to Sh1 trillion a year earlier.

In the first quarter of 2026, the bank extended Sh13 billion in new credit to micro, small and medium enterprises.

Its borrowings which include from development partners such as EBRD, European Investment Bank and Proparco were at Sh72.4 billion as at end of March up from Sh67.5 billion 12 months earlier.

Loans from international development partners are usually better priced than local funds allowing banks that have received the funds to lend at a lower interest rate to the targeted group.

Climate-friendly projects have also received heavy backing from international lenders in a bid to ensure greener economies that will protect the environment.

In addition to the financing, EBRD will provide technical assistance to KCB Bank to strengthen its green lending capabilities through specialised training, advisory services and technical expertise, enhancing the bank’s capacity to support environmentally sustainable investments.

Interior designers, landscape architects, construction project managers, as well as related technicians, will, for the first time, come under statutory regulation if Parliament approves a proposed law aimed at improving accountability and competency standards in the wider construction industry.

A new Bill tabled in Parliament for approval seeks to mainstream interior design, landscaping, and construction project management-a shift from the current scenario, where they are treated as offshoots of traditional architecture and quantity surveying.

‘The Bill therefore seeks to make provision for the training, registration, licensing and practice of architects, quantity surveyors, landscape architects, interior designers, construction project managers and related technicians so as to achieve statutory harmony in the regulation of the architectural and quantity surveying practice in Kenya’ the Bill tabled by Joseph Tonui, chairman of the National Assembly’s departmental committee on Housing Urban Planning and Public Works said in part.

Statutory regulation boosts professionals by giving assurance to their prospective employers about standards of practice and accountability. This is critical in awarding job contracts because regulated professionals are held accountable for their actions and there are avenues for recourse in cases of professional misconduct or negligence. Formal regulation also fosters trust and confidence by enforcing ethical standards and competency requirements.

Interior designers and landscapers in Kenya are presently represented by industry lobbies such as the Interior Designers Association of Kenya (IDAK), the Interior Design Society of Kenya (IDSK), and the landscape architects chapter of the Architectural Association of Kenya (AAK).

Despite representation by IDAK, IDSK and AAK, there is no formal professional recognition of interior designers and landscaping architects.

In the proposed law, built industry professionals will be required to undergo mandatory training, registration and licensing before practicing.

‘An Act of Parliament to make provision for the training, registration and licensing of architects, quantity surveyors, landscape architects, interior designers, construction project managers and their related technicians; to harmonise the regulation of professionals in Architecture and Quantity Surveying,’ the Bill proposes.

Jane Muthoni and her friend had talked about visiting Zanzibar for months before finally making the trip in May last year.

‘A friend had travelled there a couple of years back and insisted that we could do it on a budget of about Sh40,000,’ she says. ‘The affordability really stood out, but beyond that, any chance I get, you’ll find me chasing sunsets, photographing flowers, and taking in beautiful scenery.’

They took Kidia One bus from Nairobi to Dar es Salaam, before connecting by ferry to Zanzibar.

Low ticket prices are only part of the attraction, many Kenyans now going to Zanzibar by bus say travel is surprisingly comfortable; reclining seats, charging ports, individual entertainment screens, refreshments and an onboard toilet.

Travelling by road, Muthoni says, allowed them to enjoy the scenery and add another experience to the trip; cross the Namanga border to board the ferry to Zanzibar, which was quite different from the one in Mombasa. It had separate VIP and economy options, and the VIP ticket came with access to a waiting lounge, luggage assistance, priority boarding and unobstructed views during the crossing.’

Muthoni and her friend went on to enjoy a full itinerary that mapped destinations such as Stonetown, Forodhani night food market, Prison Island, Nungwi beach, Kizimbani spice farm, and Nakupenda Island. At the end of it, they came back home by flight.

‘We got discounted tickets, which cost us Sh11,000 each,’ she says. ‘But we chose to fly back only because it gave us more time at our destination.

The pair spent about Sh70,000 over the five days, covering transport, half-board accommodation, meals, souvenirs and other miscellaneous expenses.

‘If the bus option hadn’t been available, it probably would have taken us another two years to save enough for the trip,’ she says. ‘Even compared to Mombasa, the same budget might not give you the quality of experience we enjoyed over those five days. The only thing I would say is be on time because they are very punctual. They almost left me when we were leaving Nairobi, and I’d only stepped out to take a phone call.’

Nicole Wanjala, a digital marketer travels regularly for leisure. She treats herself to one major international trip during her birthday, and two or three local trips each year. For her 30th birthday last year, she went to Zanzibar.

‘It was my third time in Tanzania,’ she says. ‘I’d been to Moshi and Arusha before, but never Zanzibar.’

Planning to spend 10 days on the island, Nicole also chose the Kidia One bus to Dar es Salaam before connecting by ferry to Zanzibar.

‘It was a very last-minute trip, and when I checked flight prices, I was discouraged,’ she says. ‘At the time, a return ticket was going for about Sh70,000, yet my entire budget for the 10-day holiday was maximum Sh100,000. So I did some research, discovered the bus-and-ferry route and decided to take that instead.’

‘I took the day bus that leaves Nairobi at 6am, and I’m glad I did because the journey was incredibly scenic,’ she says. ‘There’s a lot to see, especially once you get past Moshi and Arusha.’

On the documents, she says one needs, ‘a passport or a temporary permit, a Yellow Fever certificate, and for Zanzibar, an insurance certificate, which is better gotten while still in Kenya.’

While the Kenyan stretch of the journey was largely smooth, traffic caused by an accident slowed them down in Tanzania. Some sections of the road were also bumpy, with diversions in place as crews carried out repairs and routine maintenance.

Once in Zanzibar, Nicole packed her itinerary with activities including karaoke, souvenir shopping, jet skiing, snorkelling, dolphin watching, kite surfing, feeding turtles, restaurant hopping and simply unwinding on the island.

When the holiday came to an end, she took a ferry back to Dar es Salaam before boarding an overnight bus to Nairobi.

‘This time I chose the overnight bus because I was already familiar with the route,’ she says. ‘And the price was about Sh500 cheaper.’

Having travelled extensively by bus, Nicole says she would happily do it again.

‘I enjoy discovering a destination by road because you get to see so much along the way,’ she says. ‘More Kenyans should consider exploring neighbouring countries by road. These countries are right next to us, and you learn so much simply by visiting them,’ she says.

Abdirahman Khalif, a travel content creator behind Roam Kenya, prefers travelling by coach whenever possible. When he decided to travel to Lusaka, Zambia, last month and discovered there was a route through Tanzania, he didn’t hesitate, even though the journey would take nearly three days.

‘I left Nairobi at 8pm on a Sunday and arrived in Dar es Salaam at about 10am on Monday,’ he says.

‘Later that evening, at around 8pm, I boarded another bus to the Tanzania-Zambia border. We reached the border at about 4pm on Tuesday, and I crossed into Zambia the following morning before continuing to Lusaka.’

‘The bus used the expressway, which I really appreciated, and served us tea, biscuits, water, and even a plate of chips and chicken along the way,’ he says. ‘There was also a hostess who kept us updated on the towns and destinations we were passing, and the Wi-Fi worked well from Namanga all the way to Dar es Salaam.’

He says staff members were courteous and readily assisted passengers whenever issues arose, including during customs and immigration procedures.

‘At the end of the journey, they thanked us for choosing their bus and even apologised for the exhaustion of the long trip,’ he says. ‘It was a really pleasant experience.’

But are bus companies really seeing a surge in passenger numbers?

According to Dennis Maina, a booking clerk at B. One Coach, ‘yes we have a bus that leaves from Nairobi to Dar es Salaam every day at 5pm. It travels via Namanga, Arusha, Moshi and Dar es Salaam, and on most days it departs at full capacity. Even on a slow day, we’ll have about 30 passengers out of the 46-seat capacity.’

But it wasn’t always like this. When they introduced the route in late 2024, there were days when the route had no single passenger. Over time, however, the numbers slowly grew. This, he says, is partly thanks to the increasingly premium experience they offer.

‘We have air-conditioning so the passengers don’t have to open their windows, free Wi-Fi, entertainment screens, a toilet, charging ports, and refreshments including non-alcoholic wine on the weekends,’ he says.

Muthoni, the traveller, says the toilet was for short calls only, but it was a good addition to have on a bus. ‘It meant we didn’t have to make unnecessary stopovers, although we still had one along the way.’

Who are their biggest customers?

While leisure travel has become more common, Dennis says business travellers remain the backbone of the route.

‘We see people who are going for leisure, like couples, friend groups, and families, but the consistent group that keeps us running is the business people,’ he says. ‘Most of them travel from Tanzania to buy goods in Kenya. Some source clothes from Gikomba, others buy spare parts from Kirinyaga Road, while others go to the Industrial Area. But when they come, they have to go back, so they usually account for about half the bus every day.’

For years, employers across Kenya have relied on rolling short-term contracts to fill permanent roles while avoiding the costs and obligations that come with permanent employment. A Court of Appeal ruling now threatens that practice, holding that workers who perform continuous, long-term duties cannot be kept indefinitely on renewable contracts simply because employers choose to label them temporary.

In a decision with potentially wide implications for private employers, county governments, and State corporations that rely on rolling fixed-term contracts, the three-judge bench also said prolonged insecure employment breaches the constitutional right to fair labour practices. Employees who perform permanent work for years under repeatedly renewed short-term contracts may be entitled to permanent and pensionable employment,

The judges held that repeatedly renewed short-term contracts can be deemed fixed-term service contracts and that employers cannot keep workers on endless temporary contracts. They said such employees are not casual workers.

They said labour courts must examine the substance of an employment relationship rather than the label attached to successive contracts when determining a worker’s legal status.

‘Where an employee works continuously and performs work of a permanent nature, and where the label attached by the employer is not decisive, the court must look at the substance of the relationship,’ Justices Sankale Ole Kantai, Jessie Lesiit and Abida Ali-Aroni said.

The findings emerged as the court ordered Embu County Government to regularise the employment of about 256 long-serving health workers by placing them on permanent and pensionable terms.

The judges said employers cannot circumvent statutory labour protections by repeatedly renewing short-term contracts for workers who continuously perform permanent duties.

They, however, rejected claims that the health workers had suffered unlawful pay discrimination because their union -Kenya County Government Workers’ Union- did not produce sufficient evidence.

The decision overturns a 2020 Employment and Labour Relations Court judgment that dismissed the workers’ constitutional petition and described it as ‘was a complete waste of judicial resources.’

Instead, the Court of Appeal found that the lower court failed to examine the true nature of the employment relationship and overlooked constitutional labour rights guaranteed under Article 41 of the Constitution and protections provided by Section 37 of the Employment Act.

The dispute was filed in 2019 by the Kenya County Government Workers’ Union on behalf of health workers employed in Embu’s public health facilities.

The union said many members had initially been engaged by hospital management boards before the 2010 Constitution transferred health functions to county governments.

After devolution, Embu County inherited the workers but continued engaging them through contracts lasting three months, six months or one year despite many performing permanent duties continuously for years. Some had worked for more than two decades.

The union argued that workers remained in employment long after their contracts expired without clarity about their status.

It said they lacked pension, annual leave and other benefits enjoyed by permanent staff and lived under constant uncertainty because their contracts depended on periodic renewal.

The union also complained that workers recruited later through the national government’s Economic Stimulus Programme were absorbed into permanent and pensionable employment while the older workers remained on temporary terms.

In defence, Embu County denied employing the workers as casual labourers. It argued they served under valid fixed-term contracts that complied with the Employment Act and were regularly renewed.

The county maintained that courts could not rewrite employment contracts freely entered into by both parties or convert them into permanent appointments. It also denied discriminating against the workers and said all county employees served on renewable contracts based on performance.

The appellate judges rejected that argument after reviewing the evidence. They found some appointment letters described employees as casual workers even though they earned monthly salaries and performed continuous work that could not reasonably be regarded as casual employment.

Others served under successive fixed-term contracts that were renewed repeatedly for years while they continued performing permanent functions.

‘The union’s members were not casual employees, nor were they on fixed contract as assumed by the respondent, who engaged them for a long period of time and extended the contracts at its whim. The long and continuous service entitled the appellant’s members to statutory protection,’ the judges said.

They added that the Employment Act ‘was precisely put in place to protect employees who often have no voice against the ‘big brother’ from unfair and poor labour practices.’

‘The employment relationship between the union’s members and respondents (Embu County Government and the county public service board) is not casual/temporary or based on any contract of service but is permanent and pensionable,’ stated the judges.

The court also criticised the county government for retaining workers in prolonged insecure employment despite their years of service.

‘The respondent’s action cannot but be condemned in the strongest terms, particularly because the appellant’s members were in the employ of the government, which is expected to protect its citizens and to work within the law,’ the judges said.

The judges nevertheless declined to uphold allegations of unequal pay. They ruled that although the union alleged workers performing similar duties received lower salaries and fewer benefits than permanent colleagues, it failed to present documentary evidence proving discriminatory treatment.

The judgment could attract attention from employers across the public and private sectors because it reinforces that repeated renewal of short-term contracts cannot be used to defeat statutory employment protections where workers continuously perform permanent work.

For county governments and other public institutions, regularisation of such employees carries financial consequences because permanent and pensionable terms attract retirement benefits and other employment entitlements.

The court ordered Embu County to immediately regularise the workers’ terms.

Kenya’s commercial state corporations are entering a new era. The Government Owned Enterprises Act, assented to on December 5, 2025, scraps the fragmented State Corporations Act regime and shifts Government-Owned Enterprises (GOEs) under the Companies Act. The result: uniform governance, commercial discipline and a clear separation between profit-making and public service mandates.

For taxpayers, it means fewer bailouts. For investors, it opens the door to partial privatisation and listings.

The new Act standardises everything. All GOEs-defined as companies majority-owned by the national government, operating on commercial principles and self-funded without annual parliamentary appropriations-must be incorporated as public limited liability companies under the Companies Act. Kenya Power, KenGen and Kenya Pipeline have already transitioned. Others are following.

The Act’s second major shift is structural: ring-fencing public service obligations from commercial operations. Previously, GOEs used internally generated revenue to fund public service obligations. That drained cash, created losses and pushed firms back to the Exchequer. Under the Act, commercial revenue stays in the business. Any public service obligations must be transparently funded by the Treasury. This creates an incentive for financial discipline and makes the true cost of public services visible in the budget, rather than hidden in a corporation’s balance sheet. Performance contracts will also replace loose supervision as GOEs move towards measurable accountability.

Further, each entity must develop a strategic plan and annual business plan, sign performance contracts with the National Treasury, undergo annual evaluations based on audited financial statements, and publish audited reports, performance results and anti-corruption disclosures. The Treasury will also publish performance rankings and details of director appointment processes.

The Act creates a clear pathway for private participation through partial privatisation, strategic investors and public listings. This gives Kenyans a chance to own profitable state firms while giving the government a new revenue stream.

Governance is also strengthened. For instance, minority shareholders can elect independent directors in proportion to their shareholding. That strengthens board independence and protects investors-a key demand of the capital markets.

That said, the law will not fix decades of inefficiency overnight. Success will hinge on the Treasury effectively enforcing performance contracts, boards resisting political capture, and GOEs operating on commercial principles with greater prudence. The beauty is that the necessary legal architecture is now in place.

If implemented well, the Act could shift state enterprises from fiscal liabilities to wealth-creating assets.

The Treasury has published new regulations to govern stablecoin and tokenisation issuers, virtual asset exchanges and wallet providers, brokers, managers, investment advisers and payment processors.

This is in response to the rising use of digital currencies in recent years, as Kenyans adopt them as a payment method for imports, from freelance work to multinational firms, and to wire money home using the tokens.

The new Virtual Asset Service Providers (VASP) Regulations, 2026, form subsidiary legislation for the Virtual Assets Service Providers Act 2025, which became effective in November 2025.

Who exactly will need to be licensed under the new framework?

The regulation covers virtual asset exchanges such as Binance and Coinbase, wallet providers, tokenisation businesses that turn real-world or digital items such as real estate and bonds into digital assets, virtual asset offerings, stablecoin issuers, and virtual asset managers.

Do firms incorporated abroad fall within the regulations if they target Kenyan customers?

Yes. The regulations state that a company is considered to be operating “in or from Kenya” if it actively solicits Kenyan consumers or earns revenue from Kenyan users, regardless of whether it has a physical office in the country.

That means international crypto exchanges wishing to continue serving Kenyans will need to comply with local licensing requirements and regulatory obligations.

What should Kenyan Bitcoin investors expect when opening an account, trading crypto or transferring digital assets?

Consumers should expect more rigorous onboarding procedures. Licensed providers will be required to verify customers’ identities before onboarding, conduct customer due diligence, disclose all fees, explain investment risks, provide complaint mechanisms and give transaction confirmations.

Virtual asset investors should also receive clearer information about withdrawal procedures, cybersecurity measures and consumer protections before using a platform.

Which consumer protection rights do crypto users gain under the new rules?

Virtual asset providers must disclose their licence status, business address, fees, risks, withdrawal policies, cybersecurity measures and complaints procedures in plain language before offering services.

The regulations also demand that providers assess whether investment recommendations are suitable for individual customers and maintain formal complaint-handling systems.

What are the capital requirements?

Stablecoin issuers have the highest minimum paid-up capital requirement of Sh300 million; virtual asset exchanges are required to have Sh100 million, and token issuers and initial coin offering (ICO) platforms Sh20 million.

Firms engaged in virtual asset tokenisation will require Sh10 million, with virtual asset wallet providers requiring Sh150 million, while virtual asset managers are required to hold Sh20 million.

Investment advisers are exempt from minimum paid-up capital requirements.

Why are stablecoins treated differently and more strictly than other digital currencies?

Stablecoins – digital currencies pegged to assets such as the US dollar- are designed to maintain a stable value and therefore resemble payment instruments more closely than speculative cryptocurrencies.

As a result, issuers must obtain separate licences, publish white papers, maintain reserve assets backing every issued stablecoin, ensure redeemability, safeguard reserve assets and submit regular reports.

The regulations also prohibit stablecoin issuers from paying interest on stablecoins.

What are the licence fee requirements for the companies?

Virtual asset exchanges will pay a licence fee of Sh1 million; wallet providers Sh500,000, while stablecoin issuers will pay Sh2 million. Asset managers will, meanwhile, pay Sh200,000.

How will regulation responsibilities be divided between the Capital Markets Authority, Central Bank of Kenya and other agencies?

The CMA will regulate initial coin offerings, trading platforms, token issuance platforms and tokenisation activities, while the CBK authorises businesses converting virtual assets into foreign currencies and licenses stablecoin issuers.

Other State agencies such as the Directorate of Criminal Investigation, the Financial Reporting Centre, and the Ethics and Anti-Corruption Commission also have powers to inspect and investigate licensed firms depending on their mandate.

How do the governance, capital and cybersecurity requirements compare with standards imposed on banks and other financial institutions?

The regulations adopt many prudential standards already common in mainstream finance companies. Licensed firms must maintain minimum capital, appoint compliance officers, establish risk management frameworks, undergo independent cybersecurity audits, maintain disaster recovery plans, separate customer assets from company assets, keep detailed records for at least seven years and implement robust governance structures with independent directors.

These requirements are intended to bring crypto firms closer to the regulatory standards applied to other financial institutions.

Former Safaricom chief executive Michael Joseph has joined the board of De La Rue Kenya EPZ Limited amid ownership changes, signalling a return to operations for the banknote printer more than two years after it suspended operations.

The appointment comes alongside sweeping ownership changes that have seen Switzerland-based Thomas De La Rue AG transfer its entire 60 percent stake in the Kenyan subsidiary to Mauritius-registered investment firm Monarch Capital Limited, according to filings at the Registrar of Companies.

Thomas De La Rue AG is a wholly owned subsidiary of London-listed De La Rue plc, which has operated in Kenya for nearly six decades and dominated the printing of Kenyan banknotes until it lost the multi-billion shilling deal to Germany’s Giesecke+Devrient.

The latest changes mark the biggest restructuring at the Ruaraka-based security printer since freezing note printing operations in January 2023, pointing to the possibility of the company resuming business by targeting new security printing opportunities beyond currency.

In 2023, De La Rue said it did not expect any new orders from Kenya’s central bank for the next 12 months due to low market demand, suspending its note printing operations in Nairobi.

The note printer said its joint venture with the Kenyan government, through which its operations in Kenya are conducted, will remain active.

When we reached out to him with questions on what his new role on the board of De La Rue will be, Mr Joseph promised to call back but had not done so by the time of going to press.

Mr Joseph is among three new directors appointed to the board alongside Andrew Pkemoi Lopokoiyot, an executive director at Wilson Airport-based aviation company Wilken Group, and Ugandan businessman Humphrey Arnold Munyamerere Nzeyi, founder of Invicta Africa Limited.

Mr Nzeyi’s company has, since September 2015, provided technical services to Uganda’s Ministry of Internal Affairs in the production of passports on behalf of De La Rue.

The company has also tapped a new secretary, a Kenyan advocate known as Isaac Mukui Nduru, who is also a director of Galana Energies, one of the major beneficiaries of the government-to-government fuel import scheme.

Despite relinquishing its shareholding, its chief financial officer, an Australian national, Michael James Aumann, remains a director of the Kenyan subsidiary.

The Kenyan government, through the Cabinet Secretary for the National Treasury, retains its 40 percent stake in De La Rue Kenya EPZ Limited.

Mr Joseph is one of Kenya’s most respected corporate executives, having helped transform Safaricom from a little-known mobile telephony unit within Telkom Kenya into East Africa’s most profitable company and one of the most valuable firms on the Nairobi Securities Exchange (NSE).

After retiring as chief executive in 2010, the British-born executive remained on Safaricom’s board, later serving as chairman between 2020 and 2022, while simultaneously chairing the board of Kenya Airways from 2016 until 2025.

De La Rue’s fortunes changed after it lost the Central Bank of Kenya’s banknote printing contract, ending a decades-long dominance in the production of Kenyan currency.

In April 2024, the CBK awarded Germany’s Giesecke+Devrient a five-year contract worth Sh14.10 billion ($109.4 million) to print Kenya’s banknotes through a classified procurement process.

The banking regulator said the German company was selected through a restricted tender because delays in replacing the country’s banknote supplier risked a shortage of currency in circulation, with potentially serious economic and security consequences.

However, the classified procurement process later attracted scrutiny from the Auditor-General, who questioned the secrecy surrounding the award of the contract.

The loss of the tender forced De La Rue to suspend banknote production in Kenya in January 2023 and send home most of its workforce after bringing its Nairobi operations to a halt.

According to De La Rue’s latest annual report, the group booked £13.8 million (Sh2.39 billion) in restructuring costs linked to the closure of its Kenyan currency printing operations, largely covering redundancy payments and other costs associated with winding down the business.

The annual report further shows that the Kenyan subsidiary generated no revenue during the financial year, posting a small operating loss while retaining net assets valued at about £9 million (Sh1.55 billion).

Despite losing the currency printing business, industry players believe De La Rue could still rebuild its order book by pursuing other government security printing contracts.

Among the potential opportunities are the printing of national examinations administered by the Kenya National Examinations Council (Knec), including the Kenya Certificate of Secondary Education (KCSE) and the Kenya Primary School Education Assessment (KEPSEA), should the company win future tenders.

Other potential deals are printing excise stamps for the Kenya Revenue Authority (KRA), tamper-proof security labels and standards verification marks for the Kenya Bureau of Standards (Kebs), as well as other government-issued secure documents.

The company has previously undertaken passport production in Kenya and continues to support passport manufacturing in neighbouring Uganda through technical partnerships.

De La Rue traces its Kenyan roots to 1966 through its predecessor companies Thomas De La Rue and Company Limited and Bradbury and Wilkinson, the latter having been acquired by Thomas De La Rue in 1986.

The company established its Ruaraka printing plant in October 1992, becoming the country’s principal producer of banknotes.

For more than three decades, successive generations of Kenyan currency were printed at the Nairobi facility, including the 2019 series of banknotes introduced following the promulgation of the 2010 Constitution.

The Treasury acquired a 40 percent stake in De La Rue Kenya EPZ Limited in 2017, turning the company into a joint venture with the British security printer.

The company also played a central role in the replacement of the old Sh1,000 note under former President Uhuru Kenyatta’s administration, a move that sought to flush out illicit cash held outside the banking system.

That long-standing relationship ended when the Kenya Kwanza administration opted for a new supplier, ending De La Rue’s decades-long monopoly in printing Kenyan currency.

A search of records at the Business Registration Service on May 25, 2026 showed De La Rue Kenya EPZ Limited was jointly owned by Thomas De La Rue AG, with a 60 percent stake, and the Cabinet Secretary for the National Treasury, who held the remaining 40 percent on behalf of the Kenyan government.

However, a fresh search of the company’s CR-12 records conducted on July 28 showed significant changes in both ownership and the composition of the board.

The filings indicate that Thomas De La Rue AG transferred its entire shareholding to Monarch Capital, a Mauritius-registered investment company incorporated on October 6, 2025.