Sh1.86bn tender for Mombasa power line suspended

The High Court has suspended a Sh1.86 billion tender for the construction of a power line in Mombasa following questions on whether the network is owned by Kenya Power or the Kenya Electricity Transmission Company (Ketraco).

The court temporarily stopped Kenya Power from proceeding with the tender for the 132kV Kipevu-Mbaraki power line that was advertised last week.

At the centre of the court dispute is whether the 132kV line is a high voltage and should be procured under Ketraco, or it is a mid or low-energy transmission network that should be handled by Kenya Power.

‘Pending the inter-partes hearing and determination of the Petitioner/Applicant’s Notice of Motion Application dated 28/01/2026, a conservatory order be and is hereby issued prohibiting and restraining the 1st Respondent (Kenya Power) from entertaining, proceeding with and/or receiving bids from tenderers in respect of … procurement of design, supply, installation and commissioning of 132kV Line at Kipevu- Mbaraki,’ the court said.

The court directed the matter to be mentioned on February 17 for directions.

The Centre for Litigation Trust is behind the suit, and it reckons that the line is high voltage and falls under Ketraco in a tender that could pit two state agencies in a sibling war.

The NGO argues that Kenya Power’s work is to connect homes and businesses via mid and low energy transmission networks, with Ketraco dealing in high voltage lines.

The non-governmental organisation wants the court to declare the Kenya Power tender a breach of the law. In an affidavit, Julius Ogogoh, a director of Centre for Litigation Trust, says the mandate of Kenya Power and Ketraco on managing and ownership of power transmission lines are distinct and there is no overlap in the law.

He says Kenya Power has usurped and overstepped a mandate reserved in law for Kentraco.

Mr Ogogoh said a procurement process initiated by an entity lacking powers is not a curable irregularity.

‘It is nullity ab initio, incapable of being salvaged by administrative convenience, sectoral expediency, or post-hoc rationalisation,’ he said in an affidavit.

The petitioner added that equally troubling is the apparent abdication by Ketraco, the lawfully mandated entity, whose silence or inaction he said cannot legitimise an unlawful usurpation of its statutory role.

‘As a regulatory body, the 3rd Respondent’s (Epra’s) silence in the matter as well is wanting as it shows abdication of regulatory duties and guidance in the energy sector and in this it is yoked together with the 4th Respondent (Ministry of Energy),’ he said.

The petitioner said allowing the process to proceed would entrench a dangerous precedent of mandate erosion, institutional confusion, and procurement illegality, with serious implications for sector governance, public finance discipline, and system integrity.

Ketraco is revamping the transmission network while Kenya Power is upgrading the distribution network in a bid to lower the number of outages and low-quality electricity supply caused by the constrained network.

Electricity consumption is on the steady rise driven by increased economic activities and connections, which have exerted pressure on the ageing transmission and distribution network.

Enhancing the evacuation capacity by revamping the transmission grid is key to reducing blackouts caused by an overloaded network whenever there is a surge in electricity load.

State tightens grip on Kuscco with CEO secondment

The government has picked a new chief executive officer (CEO) to run the Kenya Union of Savings and Credit Co-operatives (Kuscco), seizing control of the troubled umbrella organisation, which is still reeling from a Sh13.3 billion financial scandal linked to some of its former officials.

Official correspondence seen by Business Daily revealed that Peter Wanjohi Kiama, the Deputy Commissioner for Cooperative Development in the State Department for Cooperatives, has been seconded as CEO of Kuscco for three months, replacing Arnold Munene, who held the position.

‘It has been decided that you be seconded to the Kenya Union of Savings and Credit Cooperatives (Kuscco) as the acting Group Managing Director and Chief Executive Officer with immediate effect,’ Wycliffe Oparanya, Cabinet Secretary for Cooperatives and Micro, Small and Medium Enterprises Development, said in a letter to Mr Kiama.

‘You are accordingly expected to ensure seamless and efficient operations of Kuscco during this period. I wish you every success in this appointment,’ the CS further stated in his letter dated January 28, 2026.

Insiders said Mr Kiama’s secondment as CEO of Kuscco gives the government greater grip over the ongoing investigations into the heist and the multimillion- shillings compensation of Saccos affected by the scandal.

Mr Kiama will be backed by an interim board, which was picked in 2024 to oversee the restructuring, recovery of lost assets and restoration of governance at Kuscco following the financial scandal.

Compensation of Saccos

Kuscco has, since last year, stepped up recoveries and compensation to Saccos affected by the scandal.

It targets recovering at least 70 percent, or Sh6.2 billion, of the Sh8.8 billion principal amount that Saccos had invested in it, and has been relying on the sale of non-core assets, auctions and loan recoveries to process the planned refunds.

For example, as of December 2025, Kuscco had increased its total compensation to affected Saccos to Sh369.3 million, following a fresh payout of Sh152.4 million after offloading non-core assets and stepping up loan recoveries.

The Sh152.4 million payment in late 2025 added to the Sh216.9 million that had been paid out the previous year.

The latest payout included Sh112 million as fixed deposit compensation, which saw 116 Saccos receive between Sh9.23 million and Sh1,680, depending on how much they had invested.

Records show that Sh35.4 million has also been paid out to individuals who had invested money in the Kuscco Housing Fund (KHF) for the purchase of houses, while a further Sh5 million has been distributed to those who had saved money under the Front Office Savings Activity account, known as Kusasa.

The top recipients from the Sh152.4 million distributed in late 2025 included Hazina (Sh9.23 million), Njiwa (Sh9.23 million), UN Sacco (Sh7.58 million), IG Sacco (Sh7.56 million), Ndege Chai (Sh5.35 million) and Mhasibu Sacco (Sh4.39 million).

The amount was generated from the sale of more than 32 vehicles, the reduction of Kuscco’s branches to five from 17, and the trimming of staff to 79 from 250. Kuscco closed branches in Kitengela, Thika, Nyeri, Meru, Eldoret, Kericho, Kisii and Kisumu to cut operating expenses and concentrate on advisory, training and lobbying services.

In 2024, Kuscco paid out Sh216.9 million, mostly to small saccos. Of this amount, Sh132.2 million went towards partial settlement of fixed deposit savings, while Sh84.7 million was used to repay investments in the KHF.

Cash-raising strategy

As part of its cash-raising strategy, Kuscco plans to sell a 60 percent stake in Kuscco Mutual Assurance, its insurance subsidiary, and auction houses and land held by defaulters of mortgages issued under the KHF. It is also seeking to recover loans from Saccos that had defaulted on repayments.

Kuscco is currently auctioning houses and parcels of land valued at about Sh1.7 billion held by 684 individuals who have defaulted on loans issued through its housing fund.

The properties under auction are located in different parts of the country, including Kitengela, Kiserian, Kajiado, Nyayo Estate, Kisumu, Thika, Machakos, Webuye, Bungoma, Kisaju, Lukenya and Syokimau. The Kitengela houses are going for Sh9.5 million, according to auction details.

Top former Kuscco officials, including the then Managing Director George Ototo, have been taken to court over the cash scandal. Others charged include former chairman George Magutu Mwangi, ex-finance manager George Ochola Owino, Jackline Pauline Atieno Omolo, who was offering legal services, and Mercy Njeru, who led the controversial radio project.

Centum eyes 22-storey office tower at Two Rivers SEZ

Centum Investment Company will partially finance a new office tower at its Two Rivers special economic zone using proceeds of a dollar-denominated income Real Estate Investment Trust (I-Reit) that is being issued before the end of the first quarter of this year.

The company said the new tower at the Two Rivers International Finance and Innovation Centre (Trific) will have 22 floors, with lettable space of 76,400 square metres.

Centum’s Reit is targeting Sh5 billion ($37.3 million), whose first charge will be acquisition of an existing office property within the SEZ, known as the Trific North Tower, which has 16,234 square metres of lettable area that the company said is fully occupied.

‘Part of the proceeds will be rolled over to develop the next tower,’ said Trific SEZ chief executive officer Brenda Mbathi.

‘The planned I-Reit is backed by fully dollar-denominated rental income, implying limited foreign exchange risk for investors seeking a dollar-denominated return.’

Centum, which had stated its intention to float the dollar Reit at the beginning of last year, will be paying investors a dollar return of about eight percent on the facility.

The company is planning to issue long-term, dollar-based leases with guaranteed annual escalations on property to be developed using the proceeds of the Reit, in order to achieve a currency match between the investment and returns.

Trific, which was given the SEZ licence in June 2023, sits on 64 acres or more than half of the two Rivers development’s total area of 106 acres, and has grade-A offices, residential, hospitality, and social amenities.

In addition to the North tower, the zone also covers Victoria Towers, the Holiday Inn Hotel, and housing projects known as Mizizi, Riverbank, Cascadia, and Lofts. The Two Rivers Mall, however, lies outside of the economic zone.

Centum mainly targets global service exporters, including Business Process Outsourcing (BPO) firms, tech companies, shared services centres, and professional services entities for the special economic zone.

In June 2024, Trific bagged funding worth $47.5 million (Sh6.14 billion) from Africa-focused fund manager Vintage Capital to finance the construction of the new tower, as well as furnishing the existing one.

The funding came under what is known as a mezzanine debt, which is a hybrid of debt and equity that can also come with an added option to convert the debt portion into equity. Such loans are usually given to established companies, rather than startups, and offer flexible terms that are suited for large-scale development.

Through its proposed Reit issuance, Centum will join ICEA Lion, Laptrust, and student housing developer Acorn Holdings as Kenya’s Reit issuers, just over a decade since the Capital Markets Authority introduced the product in the Kenyan market.

Income Reits are structured to purchase and hold property for rental income. They are mandated by the law to distribute to unit holders at least 80 percent of their net profits as a dividend, which is exempt from taxes.

In Kenya, the existing Reits are exclusively marketed to a class of buyers known as professional investors, who are high-net-worth individuals or institutions whose minimum investment in the Reit is Sh5 million.

By issuing the I-Reit in dollars, Centum is targeting external investors who may have been wary of a shilling-denominated Reit on fears of exchange losses when converting the income distribution.

Kenya Airways stock rallies 70pc on strategic investor reports

Kenya Airways (KQ) share price has rallied 69.7 percent in eight trading days amid reports of ongoing talks with a strategic investor.

The national carrier’s stock closed at Sh5.50 per share on Tuesday, up 9.56 per cent from Sh5.02 on Monday, extending gains since January 15, when it closed at Sh3.24. The eight-day rally has generated paper gains of Sh13.1 billion for shareholders.

The national carrier was the top gainer in Tuesday’s trading on the Nairobi Securities Exchange (NSE).

The gains reflect how the potential capital injection from a new strategic investor lifted market sentiment and boosted confidence in the company.

A Middle Eastern airline and a Singapore-based firm were reportedly interested in investing in the Kenyan national carrier, though the Singaporean firm later denied the report. Kenya Airways did not confirm or deny the talks with strategic investors.

‘Kenya Airways continues to pursue engagements with various stakeholders and potential investors, which are at various stages of conversation,’ said Henry Okatch, KQ director of communications.

‘As a listed company, we can only make this information available to the public once these discussions are completed and in line with Capital Markets Authority (CMA) regulations through our official channels.’

The government has been trying to sell a stake in the airline for years, but nothing has materialised so far.

The airline reported a negative book value of Sh129.5 billion in the half-year to June 2025, meaning its liabilities exceeded its assets by this amount.

Koimett appointment

The airline also appointed a veteran banker and public servant, Esther Koimett, to represent Kenyan banks on the company board.

Ms Koimett was appointed to the KQ board on Monday evening, occupying a seat representing KQ Lenders Company 2017 Limited, the entity formed to convert local banks’ Sh17 billion debt into equity.

‘Ms Koimett is an accomplished public servant with over 35 years’ experience spanning investment promotion, banking, privatisation, public enterprise reform, and public policy,’ the KQ board said in a statement.

‘She has played a key role in structuring and executing major strategic transactions and initiatives undertaken by the Government of the Republic of Kenya.’

Koimett previously served on the KQ board representing the government while Principal Secretary for Transport and Director-General for Public Investments and Portfolio Management at the National Treasury.

She was involved in restructuring the KQ balance sheet, which led to the creation of the company she now represents on its board, and in negotiating with aircraft lessors and guarantors to give the airline financial headroom.

Her return, this time representing the banks’ consortium, is seen as a strategic move to give lenders a stronger voice in the company’s strategic direction, besides potential transactions involving new strategic investors.

The bank consortium includes Equity Bank, KCB, Co-operative Bank of Kenya, National Bank of Kenya, Diamond Trust Bank, SBM, NCBA, I and M Bank, Kingdom Bank, and Ecobank. Together, the ten banks hold about 38 per cent of the carrier.

The consortium became the largest shareholder after the government, which owns 48.9 per cent. Until Monday, the KQ board had 10 members representing the National Treasury, the State Department for Transport, KLM Royal Dutch Airlines, and other shareholders.

The addition of the lenders’ representative now increases the board to 11 members. The airline issued a profit warning for the year ending December 2025. 513 million a year earlier.

Erastus Mwencha: ‘I’m busier than ever after retirement’

There he is Erastus Mwencha on the video feed, sitting somewhere that looks like a backyard, his camera positioned the way your own father would position his. He’s stoic and wise, measured.

When reflection presents itself-and for a man in his 70s who has shaped Africa’s economic architecture, there is much to reflect upon-he doesn’t indulge it. Instead, he reverts to the dignity of purpose.

This is a man who wanted to be a lawyer but became an economist instead, who calls it providence. Who left a secure government job in Kenya to join an obscure regional body called PTA, a decision that baffled his peers but became his life’s defining moment.

For over three decades, Mr Mwencha has been the quiet engineer behind Africa’s integration ambitions-first as Secretary-General of Comesa, where he built the continent’s first free trade area and established institutions with balance sheets exceeding $10 billion, then as Deputy Chairperson of the African Union Commission, where he helped birth the African Continental Free Trade Area.

But spend time with him (even on video), and you discover something unexpected: this Pan-Africanist who speaks of Ubuntu and collective humanity is haunted not by personal regrets, but by Africa’s unfulfilled promise. “We haven’t progressed as much as we should have,” he says.

He’s writing a memoir, taking courses, and busier now than before. Yet there’s an urgency beneath the calm-a recognition that understanding the world more clearly has only deepened his fears. “Countries without power risk being on the menu instead of at the table,” he says. For Mr Mwencha, Africa’s unity isn’t idealism; it’s survival.

Was becoming an economist a calling, or did it just happen?

Interestingly, I initially wanted to become a lawyer, but I didn’t get a place in law school. Economics became my second choice. Looking back, I don’t regret it at all. I believe there was providence in that path. I thank God for the opportunity to contribute in the way I have, and I feel I’ve lived a fulfilling life.

What are you most proud of when you look back?

I’m proud I was part of the team that launched Africa’s first free trade area under Comesa. We also established strong institutions- a regional bank with a balance sheet of over $10 billion, insurance and reinsurance companies, and agencies that provide trade finance and political risk cover across Africa.

At the African Union, I’m proud of the institutional reforms we carried out-digitising the Commission, strengthening financing from member states, and supporting the African Continental Free Trade Area. When I look back, I’m grateful for the opportunity to contribute in these areas.

How old are you now?

I’m in my 70s-and still very young.

What do you think has been your contribution to humanity?

Under African values, we talk about Ubuntu-humanity as something collective, not individual. I believe my contribution has been in lifting others: helping someone access education, supporting businesses, and enabling people to see better possibilities in life through the work we’ve done. I’m grateful to God for those opportunities.

What questions are you asking yourself at this stage of life?

Naturally, you look back and see moments where you might have taken a different path. But you also understand that decisions are made with the information and circumstances available at the time. What troubles me more is Africa’s journey.

We haven’t progressed as much as we should have in regional integration. In some cases, we’ve gone backwards, and that saddens me deeply. Those are among my biggest regrets.

What would you undo?

At a family level, there are things I wish had turned out differently. Professionally, there are moments-both at regional and continental levels-where, in hindsight, we could have done better. Sometimes we took certain things for granted.

Where did you grow up, and what do you remember about your parents?

I was born during colonial times and grew up in a village in Kisii. Life was difficult. Schooling was not guaranteed-I had to join my father, who worked as a labourer on a white man’s farm, and it was only in his absence that I was allowed to attend school.

I’ve written about this in my memoir, which is coming out soon. The book focuses on continental integration, but it also weaves in my personal journey alongside Africa’s.

My father, having experienced colonialism, was determined that his children would be educated. He insisted on it, even forcing my older brother back to school when he wanted to stop.

He lived his values. My mother was hardworking, frank, and deeply loving. She raised nine children and made sure we were fed, clothed, and educated. When I look back, I’m deeply grateful to both of them.

When did you pivot in your life?

Several times, but one major pivot was leaving Kenya to become an international civil servant at PTA/Comesa. At the time, I was a senior government officer with a clear path upward.

Many people couldn’t understand why I would leave for an organisation that was largely unknown. It was a major inflection point, but I’ve never looked back. It was the right decision.

What has scared you most in recent memory?

My greatest fear is failure-failure of the work we have done, particularly around regional and continental integration. Integration efforts are not new in Africa. We’ve seen them collapse before. Even globally, when you look at developments like Brexit, you realise nothing is guaranteed.

I fear that Africa could still fall apart in this regard, and more than that, that Africa is being left behind. A great deal would change if we had leaders with foresight-leaders who understood that pursuing development purely at the national level is not sufficient. Our economies are too small. To survive and grow, we must trade, and the best option Africa has is to trade with itself.

Yet I see many leaders who are blinded to these opportunities. That is not just a fear-it is a deep frustration.

What about personal fears?

Yes, at the family level. The environment today is different from the one we grew up in. It is far more contaminated-socially, technologically, morally.

Our children and grandchildren are growing up in a hostile environment, and for them to succeed, it requires focus, discipline, and strong values. That worries me greatly.

What are you currently struggling with?

Not health-wise, my health is good. But I continue to work on being more present as a family person. International work takes you away from home.

I also want to keep offering my skills where they’re needed to support economic transformation. That struggle continues, and I’ll keep contributing as long as God gives me breath.

Do you credit your good health to discipline, genetics, or luck?

[Pause] I honestly don’t know. I thank God. But I’ve tried to live by Christian values, exercise regularly, read, and watch what I eat. All of that contributes to one’s health.

How many children do you have?

Three. All married.

How was your fatherhood journey?

It was a good journey. Living in Zambia helped because the society was very integrated. While my children were uprooted from Kenyan culture, they found roots through church, school, and community. They grew into global citizens, now spread across the world, and I’m very proud of them.

What’s one thing you wish they understood about you?

I leave that to them. But my hope is that they uphold African values-Ubuntu, humanity, family. Culture isn’t about returning to the village; it’s about how we treat each other. Above all, I pray that they become citizens of God more than citizens of the world.

When was the last time you changed your mind about something important?

Many times-even recently. [Grins] One defining moment was when I felt frustrated and wanted to leave Comesa because integration was moving too slowly.

Just as I reconsidered, events unfolded that placed me at the centre of that transformation. Looking back, I’m glad I didn’t jump ship.

What do people who no longer work with you say about you-fairly or unfairly?

Fairly, many appreciate my hard work and commitment. Unfairly-or perhaps fairly-some feel I can be too accommodating, trying to bring everyone on board, sometimes at the expense of firmness.

Which part of leadership makes you uncomfortable?

Loneliness-especially when making difficult decisions. Trying to ensure no one is left behind can sometimes make you overly accommodating. That tension is uncomfortable.

Do you consider this season of your life retirement?

I’ve never felt comfortable with the word ‘retirement.’ I’m active in the private sector, exploring new ideas, enrolling in courses, and writing my memoir. In fact, I’m busier now than I was before.

Do you understand the world more as you grow older-or less?

More. And the more I understand it, the more I’m scared.

What scares you?

As I pointed out earlier, I fear that Africa is being left behind. Attempts to deglobalise, in my view, are futile. Globalisation is a fact of life, driven by technology, multinational corporations, and the movement of people.

The danger is that countries without strength are not at the table-they are on the menu. Africa has the capacity to influence global decisions if it acts in unity. The tragedy is that we are not united, and because of that, we continue to be left behind.

Investors earn Sh176bn from Treasury bonds

Investors who sold their Treasury bonds on the secondary market at the Nairobi bourse made a profit of Sh176 billion after falling returns on new issuances triggered a jump in prices and demand for older, more lucrative papers.

The profits were nearly five times the Sh36.1 billion in earnings the secondary market made in 2024, underlining the dual impact of higher trading activity and prices.

The profit is the difference between the selling price of the bonds to other investors on the Nairobi Securities Exchange (NSE) and their face value, which is the amount the seller paid the government when purchasing a unit of the paper in the primary market Central Bank of Kenya (CBK).

The face value of a unit of a bond is priced at Sh100, and they were sold for up to Sh123 at the NSE.

Capital Markets Authority (CMA) data shows that investors traded a record Sh2.71 trillion worth of bonds at the NSE, with a face value of Sh2.53 trillion. In 2024, the bonds turnover stood at Sh1.5 trillion.

‘Investors turned to the secondary market, hunting for favourable yields and capital gains, as interest rates on new bonds declined due to the Central Bank of Kenya’s easing cycle,’ said Melodie Ndanu, a research analyst at Standard Investment Bank.

‘Additionally, liquidity increased significantly in the year as the CBK pumped in cash through open market operations, coupled with the reduction of the cash reserve ratio for banks and the central bank rate cuts.’

There is an inverse relationship between bond prices at the NSE and yields in the secondary market, where an increase in one results in a fall in the other.

Bond interest rates in the market declined in line with CBK cuts on the benchmark rate, which fell from 13 percent to 9.0 percent between August 2024 and December 2025.

The falling bond rate made Investors reluctant to sell existing securities, which pay higher interest.

Those selling demanded a premium, which sparked a rally in the price of highly sought-after papers like the tax-free infrastructure bonds (IFBs) of 2023 and 2024.

Other ordinary bonds have a withholding tax of 10 percent on interest for tenors above five years, while those of a lower duration are taxed at 15 percent.

A 17-year IFB sold in March 2023 pays investors 14.4 percent, while a seven-year bond issued in June 2013 carries a coupon of 15.83 percent.

In November 2023, the CBK sold a 6.5-year IFB at 17.93 percent, followed by an 8.5-year paper in February 2024 at 18.76 percent.

These papers have been trading at premium prices of between Sh109 and Sh124 per bond unit of Sh100, effectively handing their holders a capital gain of eight to 24 percent on the face value of their bonds.

The highest premium is on the 8.5-year IFB, whose price this week stood at Sh123.65, followed by the 6.5-year IFB at Sh116.20.

For the other ordinary bonds, prices range from Sh99.90 to Sh109 per bond unit, meaning they are also offering sellers a premium despite their lower coupons of between 10 and 14.3 percent.

Investors have sought to lock in these papers due to the rate outlook pointing to even lower returns from new bond sales in the medium term.

For the investors who sold their bonds at the NSE, the profits represent a return of seven percent on their initial outlay.

Meanwhile, investors who held onto their bonds continued to earn annual interest, at rates of between 10 percent and 18.46 percent.

In 2024, the profits of Sh36 billion were equivalent to a return of 2.9 percent on the face value of the securities.

On returns, the bond market trailed the equities market at the NSE, where investor wealth grew 51.8 percent or Sh1 trillion to Sh2.94 trillion last year.

Profits from bond sales matched returns from Nairobi’s property market, where sales of homes posted a return of 7.7 percent. Return on land sales stood at 6.21 percent while rents contracted 2.5 percent.

Treasury bills paid investors between 7.7 percent and 11.4 percent last year, while interest returns on fixed cash deposits in banks declined to 7.17 percent in November from 10.05 percent in January 2025.

The CBK will hold its next monetary policy committee meeting on February 10, with a possibility of cutting the base rate for a 10th straight time in order to spur lending to the private sector.

A stable shilling-dollar exchange rate and inflation holding below the CBK’s preferred range of five percent plus or minus 2.5 percentage points also support further easing.

The bond market has also grown in popularity among investors over the past two years, with a marked increase in holdings of the securities by retail investors and fund managers.

This increased participation has fed into the demand for bonds in the secondary market, giving those holding high-priced papers an avenue to sell for a profit.

The vibrancy of the market is backed by the introduction of the CBK’s Dhow CSD digital bonds trading platform in 2023, which has made it easier to buy government securities.

Households now hold Sh438.3 billion or 6.4 percent of the government’s domestic debt, which stood at Sh6.85 trillion as of January 16. At the end of June 2025, they held Sh409.3 billion of the State’s domestic debt, CBK numbers show.

Foreign investors hold Sh315 billion of the debt, with non-financial companies and non-profit organisations holding Sh123.3 billion and Sh61.6 billion respectively.

Previously, these retail bond buyers were bundled together under one umbrella known as ‘other investors’, alongside self-help groups, private companies, individuals, saccos, religious and educational institutions. This group of investors collectively held Sh288 billion worth of government securities three years ago, illustrating the scale of growth in new bond purchases by non-institutional investors.

Commercial banks remain the biggest lenders to the government at Sh2.38 trillion, followed by pension funds at Sh1 trillion and insurance companies at Sh924.5 billion.

Government institutions, including parastatals, hold Sh500 billion worth of government debt.

Court rejects tea bonus pay rise suit, says ‘overtaken by events’

The High Court has dismissed a case filed by a group of small-scale tea farmers challenging disputed bonus payments, ruling that the matter had been overtaken by events and could no longer provide any practical remedy.

The decision comes amid ongoing tensions over tea earnings and follows recent directives from the Kenya Tea Development Agency (KTDA) to revise payment structures following months of farmer protests.

The court declined an application seeking judicial review against the Tea Board of Kenya, several KTDA subsidiaries and the Agriculture Cabinet Secretary, finding that the contested bonuses for the 2024/2025 financial year had already been disbursed.

The court ruled that the farmers’ case was moot since the payments had been fully processed by October 2025, leaving no active dispute requiring judicial intervention.

“The disputed bonuses have already been paid out, meaning there is no live controversy for this court to determine,” the judgment stated.

The lawsuit was initiated by Jeremiah Migosi and the Gusii Small Scale Tea Farmers, who accused tea sector regulators and KTDA of enforcing a discriminatory payment system that disproportionately disadvantaged growers in western Kenya.

The petitioners argued that farmers in western regions received between Sh10 and Sh13 per kilogramme of tea, while their counterparts in eastern Kenya earned up to Sh55-Sh57 per kilogramme-despite selling through the same auction system.

They contended that this disparity, exceeding 470 per cent, violated constitutional safeguards against discrimination and breached their right to fair administrative action. Additionally, they accused the Tea Board of failing its statutory mandate under the Tea Act to protect farmers’ interests.

In response, the Tea Board and KTDA defended the payment structure, stating that bonuses are determined by individual factory boards based on market performance, production costs, and operational efficiency.

They further argued that KTDA operates under private commercial agreements and does not perform public functions subject to judicial review.

The court sidestepped these substantive arguments, focusing instead on whether the dispute remained legally viable.

The judge emphasized that judicial review is designed to address concrete, ongoing conflicts rather than hypothetical or academic questions.

“The doctrine of mootness requires an actual controversy to exist at every stage of judicial review,” the ruling noted.

Since both parties acknowledged that the 2024/2025 payments had been finalized by October 10, 2025, the court concluded that granting judicial review would serve no practical purpose.

“The applicants framed their case around a specific payment cycle rather than a systemic challenge to future policies,” the judge observed. “Granting leave for judicial review would be a futile exercise.”

The case unfolded against a backdrop of escalating farmer discontent over KTDA’s payment practices, particularly after bonuses dropped sharply compared to previous years.

KTDA attributed the decline to unfavorable global market conditions, regional quality variations, and a stronger Kenyan shilling, which reduced dollar-denominated export earnings when converted.

In September 2025, KTDA acknowledged the challenges in a public statement: “The drop in earnings stems primarily from adverse international market trends and unfavorable currency exchange rates compared to the previous year.”

Under mounting pressure, KTDA has since proposed adjustments to its payment model. The agency’s board recently recommended capping monthly payments at Sh30 per kilogramme of green leaf, with regional variations based on financial capacity.

Factories west of the Rift Valley-including Kericho, Bomet, and Kisii-were advised to target payments of up to Sh26, while eastern regions like Kiambu and Murang’a could aim for Sh30.

MPs question Kiptoo over the ‘rushed’ sale of Safaricom shares

Members of Parliament (MPs) yesterday put Treasury Principal Secretary Chris Kiptoo to task for what they termed rushed sale of the government’s 15 percent stake in Safaricom to South Africa’s Vodacom Group in the absence of a legal framework to ringfence the Sh204.3 billion proceeds.

The MPs also demanded to know whether there was an independent valuation in the transaction in which the government is also to receive a separate Sh40.2 billion, representing an upfront payment of dividends that will accrue on the State’s residual 20 percent stake in Safaricom.

MPs expressed concerns that in the absence of a legal framework establishing the Infrastructure Fund, the proceeds of the sale of shares will be deposited in the Consolidated Fund, thereby making it vulnerable for diversion to recurrent expenditure.

The government reached an agreement to sell six billion Safaricom shares to Vodacom at a price of Sh34 each. This represents a premium of 15.2 percent compared to the telco’s share price price of Sh29.5 on Thursday.

The National Assembly has a few days to either approve, reject or amend the proposed transaction.

Finance and National Planning committee chairperson Kuria Kimani, whose committee is overseeing the transaction, said the biggest concern on the partial divestiture is how Parliament will guarantee that the money will go toward funding infrastructure projects in the absence of a legal framework.

‘If the money went to the Consolidated Fund as required by the Constitution as Article 206, are we as Parliament able to trace this expenditure?’ Posed Teso South MP Mary Emmase.

Kitui South MP Rachael Nyamai demanded to know why the government had not tabled a Bill on the establishment of the Infrastructure Fund to ensure the money is ring fenced.

‘We have the debt and pending bills which takes priority in spending. This money could be diverted to pay this pressing need including salaries and debt,’ she said.

Dr Kiptoo told lawmakers that the Treasury had created the Infrastructure Fund as a limited liability company to receive the proceeds.

‘We thought we could use the Companies Act to set up the Infrastructure Fund quickly as a limited liability company and have Parliament approve the instrument. We are amenable to any proposals that you may have because we know that there is an ongoing public participation,’ Dr Kiptoo said.

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‘We will do further consultations quickly and see how to address the matter as to whether we have a law before passing the sessional paper on divestiture.’

Suba South MP Caroli Omondi demanded to know whether there was an independent market survey done before the government moved with the divestiture of its Safaricom shares.

Machakos Woman Representative Joyce Kemene demanded the methodology that was used to arrive at the price of Sh34 per share.

Majority Leader Kimani Ichung’wah sought to know if there were other pathways for partial divestiture of Safaricom.

‘Tell Kenyans if there is anybody with an alternative pathway that can deliver higher value, are you opposed to it?’ Mr Ichung’wah asked.

Dr Kiptoo said the National Treasury would welcome any option that will enable Kenyans to get better value than the offer it has negotiated with Vodacom.

When he appeared before the joint parliamentary committee that is considering the deal, National Treasury Cabinet Secretary John Mbadi said that proceeds from the transaction will only be used to finance commercially viable infrastructure projects.

State agencies have already submitted a list of viable projects that the proceeds the government will get from the deal will be invested in.

‘The proceeds of the sale of Safaricom shares will be exclusively used to de-risk and lower the cost of infrastructure projects. I have already established the National Infrastructure Fund Limited where I am the sole shareholder,’ Mr Mbadi told the lawmakers.

‘This money is not going to fund our budget, it is not going to be used to fill our fiscal deficit, not to pay pending bills nor capitation. This money is going to be used exclusively on only commercially viable projects.

The funds, according to the Cabinet Secretary, will also go towards the energy sector where it will be used to fund generation and transmission of power that will be economically viable.

Safaricom, EABL bonds quadruple retail debt investors at Nairobi bourse

Individual debt investors returned to the Nairobi Securities Exchange (NSE) in large numbers in the quarter to December 2025 after Safaricom and East African Breweries (EABL) tapped the market for funding, underscoring renewed appetite for corporate bonds after a prolonged issuance drought.

The number of individual corporate bond investors at the bourse rose 3.9 times to 2,966 from 759 in September, lifting the share of retail participation in the bond market to 7.2 percent from 5.8 percent, latest data from the Capital Markets Authority (CMA) shows.

The surge followed two successful corporate bond issuances during the quarter by Safaricom and EABL, both of which were oversubscribed, coming shortly after a bond issue by Linzi Finco Trust that ended more than a year without a new corporate bond listing.

Safaricom raised Sh20 billion in a medium-term note issued in December and which attracted bids worth Sh41.86 billion, with the vast majority of bidders being retail investors in terms of the number of applications.

The company disclosed that 2,453 individual investors participated in the transaction in which the number of institutional investors was 574.

Within the same month, EABL’s medium-term note raised Sh16.76 billion, surpassing the initial target of Sh11 billion. The brewer did not disclose how much of the demand came from retail investors.

Overall, institutional investors, including insurance companies, pension funds, investment banks and brokers, reduced their participation at the Nairobi bourse, with at least 29 exiting the market in the three months to December.

The share of corporate bond value held by institutional investors declined to 90.7 percent from 92.3 percent in September, reflecting rising interest from retail investors.

The two bond issues also boosted turnover and trading in the corporate bond secondary market. Value traded rose to Sh840 million in 2025 from Sh40 million in 2024.

‘Notably, corporate bonds traded [in the secondary market] during the fourth quarter of 2025, recording a turnover of Sh203.49 million, compared with Sh107.85 million in third quarter of 2025,’ the CMA said in its quarterly market update.

The two bonds issued in December brought the total number of listed corporate bonds to seven. EABL’s previous bond was issued in 2021, raising Sh11 billion, and was redeemed with the proceeds of the December bond.

Safaricom’s bond was the first tranche of a Sh40 billion medium-term note programme, and the company is expected to return to the market to raise a second tranche.

Beyond corporate bonds, retail investors’ appetite is rising across other asset classes, including government bonds, equities and collective investment schemes.

AFA now lifts macadamia harvesting ban after survey

The Agriculture and Food Authority (AFA) has reopened the harvesting and trading of locally produced macadamia from February 1, 2026, after a mid-season survey showed that a significant share of the crop has reached maturity.

The move lifts a seasonal closure that had taken effect on December 1 last year, and which was initially set to run until February 15, 2026, as part of efforts to safeguard kernel quality and protect Kenya’s reputation in premium export markets.

In a public notice on Thursday, AFA Director-General Bruno Linyiru said the decision followed a targeted macadamia maturity surveillance exercise conducted this January across major growing counties.

‘The authority continued to monitor crop maturity trends and enforce compliance during the closure period, particularly in response to reported violations in some production areas,’ said Dr Linyiru.

‘The surveillance findings revealed variable maturity levels across agro-ecological zones. Most nuts in lower-altitude coffee-growing zones had attained physiological maturity, with some mature nuts naturally dropping to the ground.”

In contrast, AFA noted, nuts in higher-altitude tea-growing zones were found to be largely immature, reinforcing concerns about premature harvesting.

‘In view of these findings, and following requests from stakeholders, the authority will officially re-open the harvesting and trading of macadamia nuts effective February 1, 2026. AFA strongly urges all stakeholders, particularly farmers, to harvest only mature nuts and allow immature ones to develop,” AFA said.

Kenya, one of the world’s leading macadamia exporters, has in recent years grappled with fluctuating quality and volatile prices blamed on early picking and unregulated trading by middlemen.

Processors have repeatedly warned that immature nuts result in low kernel recovery, reduced oil content and poor shelf life, undermining competitiveness in export markets that demand strict quality specifications.

Section 43 of the Agriculture and Food Authority Act, 2013, prohibits the export of raw macadamia except with written approval from the Agriculture Cabinet Secretary.

In 2024, processors faced heightened competition from Chinese buyers after the government temporarily lifted the export ban on raw nuts, known as nut-in-shell (NIS), to address a glut that had driven farm-gate prices down from a high of Sh180 per kilogramme to Sh30.

Kenya’s macadamia industry remains a key foreign exchange earner, with exports destined for markets in the United States, Europe, and Asia, where buyers place a premium on consistency and traceability.

According to the Kenya National Bureau of Statistics (KNBS) Economic Survey 2025, Kenya had 11,090 hectares under macadamia production in 2024, producing 51,200 tonnes worth Sh4.95 billion.