Category: Business Daily

This week, Kenya hosts the 7th African Continental Qualifications Framework (ACQF) Forum, bringing together governments, qualifications authorities, the African Union, development partners and education experts to advance a common qualifications system for the continent.

The meeting marks a major milestone as the ACQF shifts from policy to implementation. A key outcome will be the launch of the Qualifications and Credentials Platform, a trusted continental database that will make it easier to verify qualifications, reduce fraud and support the recognition of credentials across Africa.

For decades, African integration has focused on roads, railways and ports. While these remain vital, the success of the African Continental Free Trade Area (AfCFTA) will depend just as much on the movement of skilled people as it does on the movement of goods.

Millions of Africans have faced barriers because qualifications earned in one country are often difficult to compare or recognise in another. This has forced professionals into costly re-certification, limited labour mobility and made it harder for employers to recruit talent across borders.

The ACQF addresses this challenge by providing a common reference framework that enables countries to compare qualifications while respecting national education systems. It creates greater trust in qualifications and opens opportunities for students, professionals and employers alike.

The forum also recognises that the future of work is changing rapidly. Artificial intelligence, automation and the green economy demand qualifications systems that recognise lifelong learning, workplace experience, micro-credentials and digital certifications.

Kenya has positioned itself at the forefront of these reforms through the Kenya National Qualifications Authority, which has strengthened recognition of prior learning, digital qualifications and credit transfer systems.

Ultimately, Africa’s greatest competitive advantage is its people. When qualifications become trusted and portable, education translates into opportunity, opportunity into labour mobility, and labour mobility into shared prosperity. The ACQF is laying the foundation for a continent where talent-not geography-determines opportunity.

Kenya is one of seven countries in the world on track to reduce new HIV infections by 90 percent by 2030, a new analysis has shown, highlighting the country’s remarkable progress in curbing new infections over the past decade.

Analysis by the Joint United Nations Programme on HIV/Aids (UNAids) shows that Kenya has cut new HIV infections by at least 78 percent since 2010, one of the steepest declines recorded globally, placing it alongside Benin, Eswatini, Lesotho, Nepal, Rwanda and Zimbabwe as one of only seven countries currently on course to meet the 2030 target.

Kenya’s success is attributed to sustained investment in HIV prevention programmes, particularly those that prevent mother-to-child transmission during pregnancy and childbirth. The country has surpassed 90 percent coverage of these services, alongside expanded HIV testing and treatment programmes that have helped drive down new infections over the past decade. ‘In 2025, seven countries achieved at least a 78 percent reduction in the number of new HIV infections since 2010, placing them well on track towards the goal of a 90 percent reduction by 2030,’ the report said.

UNAids has named Kenya as being among a small group of countries that are increasing their domestic HIV funding as donor support shrinks. It is one of 55 nations that have reported raising their public HIV budgets since 2025, signalling a shift towards greater domestic financing to sustain HIV programmes as external aid declines.

Kenya has committed to providing about $850 million (approximately Sh110 billion) in domestic funding over five years under its new HIV partnership with the United States.

Kenya has achieved this progress despite being hit by shrinking international funding. The country’s response to HIV has historically relied heavily on donor support, particularly from President’s Emergency Plan for AIDS Relief (Pepfar) and the Global Fund, both of which have reduced funding in recent years.

In Kenya, we hold a very strong culture. Since colonial invaders long ago clumsily decided on our national boundaries, we have developed a strong sense of national identity as well as of maintaining our ethnic and other diversities.

In the investment space, different nations favour different stores of value for their hard-earned savings. Russia and Central Asia tend to prefer precious metals, the United Kingdom holds pensions, while in the United States people strongly prefer stock equities. But here in Kenya, we prefer and love our real estate investments.

Holding property is extremely important to us. However, given that our main store of savings value is in real estate, it foments a litany of scammers and unscrupulous developers. Buying off-plan developments carries significant risk, with very little recourse if a project falls through. Even existing homes, plots and apartments come with title deed fraud risks. Consequently, buyers have become increasingly careful, relying on legal advisers to ascertain a property’s legitimacy before purchase.

However, what about real properties coming up all over Nairobi, Mombasa and in several county headquarters such as Eldoret, Kisumu and Nakuru? Internationally, investors tend to look at the projected return on investment (ROI) for real estate. In Kenya, developers also show projected monthly rental income as the ROI for a project.

But what developers often do not show would-be buyers are the annualised ROI figures for prospective projects and comparisons with nearby rental incomes and ROIs of similar developments. Since there is no national database of real estate projects or rental prices, it is hard for individual investors to conduct due diligence on a property’s anticipated ROI.

But our ROI on real estate rental returns is staggeringly low. In the United States, one can easily get a 12 percent annual ROI on residential real estate investments, and the tax regime there allows investors to write off mortgage loan interest and repair expenses to drastically reduce taxes, which is much harder to do here in Kenya.

In Nairobi, an investor might put Sh3 million into purchasing a studio apartment in Kiambu and receive only Sh18,000 a month in rent. Unfortunately, that gives a 7.2 percent gross annualised ROI, but after the 7.5 percent flat tax on rental income and an assumed 10 percent agent fee, depending on the building and project, the investor is left with only a 5.9 percent net return. Conversely, one could spend Sh6.5 million buying a one-bedroom apartment in Kilimani that may sit vacant because of oversupply before the rent is lowered to attract a tenant. One might then achieve Sh55,000 a month in rent, yielding a gross ROI of 10.2 percent, but after income taxes and agent fees, this falls to 8.4 percent.

Sadly, though, when one drives through Westlands Road or Ring Road, Kilimani, we see numerous vast, upscale new one- and two-bedroom apartment blocks going up everywhere. Many of the buildings block sunlight from neighbouring apartments. In a slowing economy, as any developing nation progresses towards middle-income status and beyond, who will fill those new units, and at what rents?

Supply and demand will eventually fill the apartments, but at what monthly rental price points, and will investors be satisfied with the resulting ROI? Even the unexpected 2025 collapse of USAID caused the loss of tens of thousands of middle- and high-income NGO jobs in Kenya that could have occupied some of those buildings. As artificial intelligence starts to reach its grubby fingers into our service sector and cause massive job losses, which industry or sector will employ the newly unemployed who can rent those units?

Ironically, though, we do have an investment vehicle in Kenya that provides fantastic returns compared with other countries. While in the United States, the United Kingdom, Germany and Japan, savings account interest rates range from 0.5 percent to 4.9 percent in annual ROI before taxes, here in Kenya we can achieve a staggering 6 percent to 11.5 percent annual ROI on bank savings accounts or fixed-term deposits. Further, our annuity sector, run by our big insurance companies, offers annual returns of 10 percent, 11.5 percent and beyond.

All the while, the Kenya Revenue Authority gives us favourable tax rates on savings income at 15 percent, rather than earned income tax rates. If someone is disciplined and will not touch their principal investment, one can earn far better returns on savings, fixed-term and annuity investments than in the residential rental real estate market.

As Kenya’s savings ROIs remain notably higher than those in many other countries while rental income ROIs remain lower, one cannot help but ponder whether we will start to see a shift in our preferred store of value over the next five years. It also leaves one asking what further steps the Central Bank of Kenya can take to enhance trust in savings accounts and fixed-term deposits, and what the Insurance Regulatory Authority can do to improve trust in insurance companies’ annuity products.

The High Court has temporarily halted recruitment of at least 12 senior management and professional positions at the Kenya Reinsurance Corporation (Kenya Re) pending determination of a case challenging the exercise on claims of non-transparency.

The court barred the Nairobi Securities Exchange-listed insurer from processing applications, interviewing candidates or issuing appointment letters.

The frozen recruitment relates to vacancies advertised on June 4, 2026, including three general manager positions for reinsurance business, legal services and corporate services.

The recruitment also covers the positions of two chief financial officers for Kenya Re Tanzania and Zambia, and chief executive officer/principal officer for Kenya Re Tanzania.

Other positions include: assistant manager for internal audit, assistant manager for risk and compliance, senior underwriter for life, treaty and facultative business, and executive assistant to the group managing director.

The High Court granted the interim injunction after petitioner Brian Ochieng argued that Kenya Re had already started inviting shortlisted applicants for interviews and risked completing the process before the constitutional dispute could be heard. The freeze order will remain in force until October 1, 2026, when the case is scheduled for mention.

Mr Ochieng told the court that Kenya Re, through a contracted recruitment agency, had invited candidates for interviews beginning July 15, creating urgency for intervention.

He alleges that the recruitment lacked transparency, saying job applications were being processed through an email account accessible only to the group managing director, creating room for “canvassing, compromising and interference.” Those allegations have not been determined by the court. He argued that allowing the process to continue would undermine the pending petition.

“If the respondents are allowed to proceed with the said interviews and issue letters of employment to successful candidates, the substratum of the application… and the Petition herein will be defeated,” Ochieng’s advocate said.

He further argued that “the actions will be irreversible as successful applicants will be confirmed as employees of the respondent.”

He alleged lack of transparency, saying applications were being processed through an opaque system vulnerable to meddling.

The petitioner insisted that the balance of convenience favoured preserving the recruitment until the court determines whether it complied with constitutional and statutory requirements.

The application relies on a recent Supreme Court decision affirming that the High Court has authority to hear constitutional challenges involving pre-employment recruitment processes where no employer-employee relationship exists.

Mr Ochieng said he was neither an employee of Kenya Re nor an applicant for the advertised positions.

The High Court earlier certified the matter urgent and directed the respondents to file responses within seven days.

The constitutional petition underlying the injunction seeks declarations against Kenya Re Group Managing Director Hillary Wachinga and general manager for finance and credit control Ruth Ngugi and Kenya Re over alleged violations of constitutional rights, procurement law and public service principles.

Kenya Re is a publicly listed reinsurer in which the Kenyan government holds a majority stake. It provides reinsurance services in Kenya and several African markets, making the halted recruitment significant for the corporation’s senior management and professional staffing.

The court has warned employers that they cannot fire workers based on suspicion alone, ordering I and M Bank to compensate a former employee after finding it dismissed him without proving he had done anything wrong or following the proper disciplinary process. The ruling highlights the need for employers to have evidence and observe fair procedures before dismissing staff accused of misconduct.

Consequently, I and M Bank has been ordered to pay a former staff Sh1.1 million after a court ruled that it dismissed him without proving misconduct or right procedures.

The Employment and Labour Relations Court ruled that I and M Bank unfairly dismissed a credit analyst accused of improperly accessing a joint US dollar account belonging to one of its directors and the director’s spouse.

Justice Ocharo Kebira said the termination of Tom Mongare was unfair, as the bank relied on an incomplete investigation that left critical questions unanswered.

Mr Mongare joined I and M Bank in 2019 as a credit analyst in the personal and business banking division at its Mombasa Nyerere Avenue branch. He earned a gross monthly salary of Sh105,688 before his dismissal on May 20, 2024.

The dispute arose from him accessing a joint US dollar account held by one of the bank’s directors, who also serves as group executive director of Coast Bottlers, and the director’s spouse.

The bank argued that the employee had no legitimate business reason to access the account and alleged the customer’s spouse was later contacted by strangers who appeared to possess confidential banking information.

Mr Mongare denied wrongdoing. He told the court he was conducting preliminary due diligence after the bank’s relationship manager informed him Coast Bottlers was considering acquiring vehicles through financing or leasing arrangements that could involve the bank.

He testified that reviewing links between a corporate borrower and its directors formed part of his work as a credit analyst and insisted he never disclosed any customer information to anyone. He told the court that his work required him to verify account turnover and transactions between the company and its directors.

Justice Kebira found the explanation remained largely unchallenged because the relationship manager, identified only as Zadock, was never interviewed during investigations or called to testify despite the bank’s own human resources manager describing him as ‘a vital witness.’

‘It is a well-established evidentiary principle that where a party fails to call a witness peculiarly placed to speak to a fact material to the dispute, the court may draw an adverse inference,’ the judge said.

The court also found no evidence connecting Mr Mongare to the alleged disclosure of confidential information.

‘There is nothing beyond suspicion connecting the claimant to the disclosure of the customer’s private details to any third party,’ the judgment said.

Justice Kebira noted the bank never identified the alleged callers, produced evidence tracing any communication to Mr Mongare or called the customer to testify.

The court further found there were serious procedural failures during the disciplinary process.

It said the bank did not issue a show-cause letter, withheld the investigation report from the employee, fixed a disciplinary hearing while investigations were supposedly continuing and failed to interview a witness central to the employee’s defence.

‘The sensitivity of an allegation, if anything, calls for more scrupulous observance of an employee’s procedural entitlements, not their suspension,’ the judge said.

Justice Kebira also cited contradictory testimony from the bank’s own witnesses over whether other employees had accessed the same account on the material day.

Mr Mongare was awarded notice pay, accrued leave, seven months’ salary as compensation, interest and legal costs. The court also ordered I and M Bank to issue him with a certificate of service.

Every person who has sought medical care knows that treatment rarely begins with a doctor. It often starts at a registration desk, with an identity check, an eligibility verification, or a pre-authorisation request. These steps may appear administrative, but they often determine how quickly care is received and how confidently providers can deliver it. They remind us that healthcare is shaped as much by the systems behind it as by the care itself.

According to the World Health Organization, sub-Saharan Africa has approximately 0.2 doctors per 1,000 people, one of the lowest physician-to-population ratios in the world. Expanding healthcare workforce remains essential. But even if every country doubled its number of doctors tomorrow, healthcare would still struggle if systems supporting those professionals remained slow, fragmented and disconnected.

Behind every successful consultation is an invisible system. It verifies a patient’s identity, confirms insurance eligibility, authorises treatment, processes claims, reimburses providers and generates the information needed to make better decisions. When these systems work well, patients rarely notice them. When they fail, everyone does.

The importance of these invisible systems is becoming increasingly difficult to ignore. Across the world, healthcare leaders are recognising that sustainable healthcare depends not only on hospitals, healthcare workers and financing, but also on the digital infrastructure that connects them.

Kenya’s transition from the National Health Insurance Fund (NHIF) to the Social Health Authority (SHA) reflects this broader shift. Beyond financing, it signals a growing recognition that connected digital infrastructure is becoming just as important as physical infrastructure. Modern healthcare increasingly depends on systems that enable faster decisions, greater transparency, and more reliable information across the healthcare ecosystem.

The transition has also demonstrated that health financing reform cannot succeed without modern administrative capability. As healthcare becomes more digital, citizens increasingly expect the same speed, transparency and convenience they experience in banking, telecommunications and other services. Healthcare can no longer afford to operate differently.

Digital infrastructure is quietly becoming healthcare’s operating system. When patient identity, eligibility verification, provider management, pre-authorisation and claims processing operate as one connected ecosystem information moves more quickly, decisions become more consistent, and trust grows across the entire healthcare ecosystem.

The next breakthrough in healthcare may not be a new treatment. It may be the ability to connect every stage of care into one trusted system. The real opportunity lies in connecting every administrative touchpoint from patient registration to provider for reimbursement into one intelligent ecosystem.

Artificial intelligence is often portrayed as the future of diagnosis. Its immediate impact may prove to be far less visible, but just as significant. Intelligent claims adjudication, automated pre-authorisation and predictive fraud detection are helping health systems make faster, more consistent and more transparent decisions. The objective is not to replace professional judgment. It is to strengthen it.

This shift also changes how we should evaluate innovation. Success should not be measured by how sophisticated a technology appears, but by whether it removes unnecessary complexity for patients, providers and funders. The most valuable innovations are often the ones people barely notice because they simply make healthcare work better.

Across Africa, there is already compelling evidence that this transformation is underway. Rwanda has integrated telemedicine into its national health system, extending specialist care to underserved communities. In Kenya, digital financing platforms have demonstrated how technology can improve transparency, strengthen financial inclusion and simplify healthcare payments. These innovations address different challenges, yet they all point towards the same destination: healthcare systems that are more connected, more responsive, and more centred on the people they serve.

What is encouraging is that many African countries are building these capabilities without decades of legacy infrastructure. Rather than modernizing outdated systems, they have an opportunity to design connected healthcare ecosystems from the outset. That is an advantage the continent should not underestimate.

One lesson has become increasingly clear through years of working across healthcare technology and administration: healthcare rarely struggles because clinicians lack expertise. More often, it struggles because the systems surrounding clinical care cannot keep pace with the demands placed upon them. We often think of delayed claims, fragmented information, and disconnected workflows as operational issues. In reality, they influence patient confidence, provider sustainability, and ultimately the quality of care itself.

The strongest health systems will not necessarily be those with the newest technologies. They will be those that use technology to remove friction instead of creating it, connect information instead of isolating it and replace uncertainty with trust. Technology, on its own, is never the destination. It is the infrastructure that enables healthcare to become more responsive, more transparent, and ultimately more human.

As governments, healthcare providers, insurers and technology partners continue investing in healthcare transformation, three priorities deserve greater attention. Healthcare systems must be designed to communicate with one another rather than operate in isolation. Investments should simplify patient journeys rather than merely digitize existing processes. And above all, every technological advancement should strengthen trust because healthcare ultimately depends on confidence as much as capability.

Better hospitals will always matter. Better medicine will always matter. Outstanding clinical care will always matter. But the healthcare systems that define the next decade will be distinguished by something less visible: their ability to connect people, information and decisions in ways that make care more accessible, more efficient and more trusted.

Across Africa last year, fewer people were uncertain about obtaining adequate food or were forced to reduce the quality and quantity of what they ate. The hunger rate fell for the first time in nearly 10 years, from 20.3 percent in 2024 to 20 percent in 2025.

Moderate or severe food insecurity fell from 58.5 to 56.6 per cent, or 8.6 million fewer people. Severe food insecurity also declined. Child stunting is falling. Even hunger, which had been rising in Africa since 2017, appears to have stopped climbing.

The change is modest, but it could mark a turning point. After a decade of deterioration, Africa has shown that the architecture behind food security can work. Keeping that progress alive will need a second shift: from reducing hunger alone to making nutritious diets affordable.

For decades, the address mattered as much as the house itself. If Kenya’s wealthy bought a second home abroad, chances were it overlooked Manhattan’s skyline, London’s parks or Dubai’s glittering waterfront.

Today, however, another skyline is gradually replacing those familiar postcards. Johannesburg and Cape Town are emerging as the new addresses of choice for Kenya’s affluent, reflecting a shift in how wealth is being preserved, diversified and deployed across Africa.

Knight Frank’s Wealth and Investment Trends 2026 report shows South Africa has overtaken the United States as the preferred offshore residential property destination for Kenyan high-net-worth individuals.

The finding signals that investors increasingly looking south rather than west as Africa’s largest economies become more interconnected through business, aviation and capital.

‘Among secondary destinations, the United Kingdom ranked at 25 percent, while South Africa also emerges as a notable regional option at 15 percent. In the previous year, the United States and the United Kingdom featured more prominently as offshore destinations,’ wrote Knight Frank in the report.

‘In 2026, the UK retains its strong position, while South Africa has emerged as a more visible alternative within Africa.’

Years ago, offshore investing was largely synonymous with Europe and North America, where property ownership symbolised status as much as financial success.

Today, Africa itself is beginning to offer many of the ingredients wealthy investors once searched for overseas, including mature property markets, professional asset managers, deeper financial systems and internationally recognised cities.

‘South Africa’s increasing relevance reflects its position as a more mature and diversified African economy, with a well-developed financial system and sophisticated commercial and residential property markets,’ said Knight Frank.

‘Its inclusion among preferred destinations signals a gradual broadening of intra-African investment flows among Kenyan HNWIs (High Networth Individuals), alongside established Western markets.’

According to Hass Consult co-Chief Executive Sakina Hassanali, African wealth is becoming increasingly regional, with the wealthy looking more within the continent as a result of matured regional markets.

‘South Africa offers a sophisticated residential market, attractive lifestyle appeal and is far more accessible for Kenyan investors,’ says Ms Hassanali.

But that accessibility stretches beyond flight times. Buying and managing property in Johannesburg is considerably easier than maintaining an apartment in New York, where taxation, regulations, financing structures and professional management requirements are significantly more complex.

African investors increasingly understand neighbouring markets better than distant global cities, making cross-border decisions less intimidating than they were a decade ago.

Despite South Africa’s growing attraction, Knight Frank’s findings indicate that, Kenya remains the dominant investment destination for affluent households, although preference slipped to 60 percent from 66 percent last year, a trend Ms Hassanali describes as typical progression as wealth grows.

‘Investors naturally move from concentrating their wealth in one market to diversifying across multiple geographies and asset classes. I don’t see this as a loss of confidence in Kenya, but rather as a sign of increasingly sophisticated portfolio construction,’ she observes.

Half of wealth advisers surveyed said fewer than 10 percent of their clients are pursuing second citizenships, while 38 percent reported none are seeking alternative passports. Those figures paint a picture of wealthy families diversifying assets without physical relocation.

The report attributes that confidence to substantial investments already anchored in Kenya across property, agriculture, technology and privately owned businesses.

Knight Frank says deep-rooted social connections and multigenerational family structures also continue influencing residency decisions as much as financial considerations.

‘The continued preference for retaining primary residency in Kenya reflects sustained confidence in the country’s long-term economic prospects and investment environment, despite prevailing global uncertainties,’ noted Knight Frank in the report.

‘Deep-rooted family structures, generational ties and community networks also continue to play a central role in residency decisions, reinforcing long-term attachment to the local market and limiting outward migration among Kenya’s wealthy population.’

The survey also found most wealthy Kenyans still keep only a small proportion of their residential wealth overseas. Thirty-five percent of advisers said less than one-fifth of clients’ residential property holdings are located outside Kenya, reinforcing the country’s position as the centre of their wealth strategies.

Ms Hassanali projects that while international diversification is likely to continue, it will not replace domestic investment.

‘Overseas property ownership comes with greater complexity from taxation and regulation to ongoing management and resale,’ she says.

‘For most Kenyan Investors, international property is likely to remain a complement to their Kenyan portfolio rather than a replacement for it.’

The findings contrast with a rapidly expanding global market for investment migration where wealthy individuals increasingly acquire alternative citizenships to secure easier travel, tax planning opportunities, as well as access to more stable jurisdictions.

Countries including Portugal, Greece, Malta, the United Arab Emirates and several Caribbean states have in recent years attracted affluent investors through residency-by-investment and citizenship-by-investment programmes.

The programmes typically require qualifying investments in property, government securities or local businesses in exchange for residency rights or eventual citizenship.

Global demand for such programmes has accelerated following geopolitical conflicts, tighter immigration rules, rising taxation, as well as heightened political uncertainty across several regions.

Cumulatively, goods worth Sh2.76 trillion exported from China to Kenya over the five years to December 2025 do not appear in KRA’s import records.

GACC says that between 2021 and 2025 the country exported goods valued at Sh5.35 trillion against KRA’s import figure of Sh2.587 trillion, leaving an unexplained gap of Sh2.76 trillion.

China has been Kenya’s largest source of imports for more than a decade, accounting for about a quarter of all goods brought into the country.

Customs taxes on imports are also one of the government’s biggest sources of revenue, making any persistent discrepancy in import records significant for both tax administration and trade policy.

While differences in trade statistics can arise from factors such as the timing of shipments, goods routed through third countries and differences in statistical classification, experts say a persistent gap of this magnitude warrants closer scrutiny because it could point to under-declaration of imports, trade mis-invoicing or other forms of customs leakage.

If a significant part of the discrepancy reflects imports that escaped customs declaration, the government may have lost substantial import tax revenue while some goods may have bypassed regulatory checks, experts argue.

The Sh629 billion gap represented about 49 percent of the value of goods that China recorded as exports to Kenya in 2025, continuing a pattern that has persisted for at least five consecutive years.

The discrepancy was Sh96 billion higher than the Sh533 billion gap recorded in 2024, which came after a Sh733 billion gap in 2023, a year when the Kenyan Shilling had significantly depreciated against major currencies.

The persistent gap between China’s export records and Kenya’s import statistics has raised questions about whether it reflects statistical differences, goods routed through intermediary countries or under-declaration of imports that could have reduced customs tax collections.

‘It has several policy implications, because with such a huge gap it points to possible revenue leakages that may have been missed,’ said economist Churchill Ogutu, head of research at Capital A Investment Bank.

The KRA did not respond to detailed questions on the source of the discrepancies via an email sent to the tax agency on July 18.

However, the Treasury has previously revealed plans to have the KRA work with its counterpart agencies in other jurisdictions to determine the true value of imports shipped in from China.

As part of its revenue strategy for the medium term, the Treasury disclosed that the government will be working with other tax authorities in determining the true value of ‘high-risk imports from China,’ which is aimed at addressing the problem of mis-invoicing.

Trade mis-invoicing involves manipulating the price, quantity, or quality of a good or service on an invoice so as to shift capital illicitly across borders.

The government reckons that the value of most of these products-especially electronics such as mobile phones and computers – has not been accurately priced, leading to tax leakages running into billions of shillings.

‘Specific tax measures to be implemented include…to establish a clear framework on the exchange of information (EOI) with other tax jurisdictions for both domestic taxes and customs to ensure the flow of information e.g. valuation of high-risk imports from China and Transfer pricing paused by multinationals,’ the Treasury said in its medium-term revenue strategy for the period 2024-2027.

Customs taxes remain one of the KRA’s biggest revenue streams. In the nine months to March 2026, the authority collected Sh733.7 billion in customs revenue, accounting for 36 percent of all tax collections, underscoring the importance of accurately recording imports.

Between 2021 and 2025, the Kenya National Bureau of Statistics recorded exports to China totalling Sh121.5 billion, while the GACC recorded Sh151.9 billion. The difference of Sh30.4 billion is the cost of shipping and insurance.

‘It’s normal to see what’s recorded as imports being slightly higher than what’s the equivalent exports from the source country because one is FOB and the other includes shipping costs,’ said Mr Ogutu.

‘But a situation where imports are less than exports is difficult to explain. It could be a result of several factors.’

Some scholars have attributed such discrepancies in records to goods smuggling, especially when the goods have been illegally obtained, are contraband, or when importers want to evade paying taxes.

Motor dealer DT Dobie Kenya, now in liquidation, has been ordered to pay Sh1.1 billion in customs duty on imported vehicle parts after the National Treasury failed to honour its promise to settle the tax.

The Tax Appeals Tribunal dismissed the company’s appeal against the Kenya Revenue Authority (KRA), ruling that the Treasury’s undertaking did not extinguish the importer’s legal obligation to pay customs duty.

The dispute stemmed from duty-free imports of semi-knocked down (SKD) vehicle kits under a 2016 government programme aimed at reviving local vehicle assembly.

SKD kits are imported vehicle parts assembled locally. Unlike completely knocked down (CKD) kits, which qualified for duty-free importation under the customs regime, SKD kits were never exempted by law.

The tribunal upheld KRA’s review decision confirming customs duties of Sh1.11 billion, finding that no legislation had ever granted SKD imports a customs duty exemption.

The dispute originated under the Kenya Industrialisation Transformation Programme, through which the government sought to revive local vehicle assembly.

In 2016, the government negotiated with Volkswagen South Africa to re-establish Volkswagen assembly in Kenya after nearly four decades. Later that year, the government, Volkswagen South Africa and DT Dobie signed a Letter of Commitment appointing D.T. Dobie as Volkswagen’s local implementation partner.

The programme involved assembling Volkswagen Polo Vivo vehicles at the Kenya Vehicle Manufacturers (KVM) plant in Thika using SKD kits and establishing a training centre to develop local automotive skills.

To facilitate the project, the National Treasury instructed KRA to clear SKD imports without collecting customs duty immediately and undertook to pay the taxes pending amendments to revenue laws that would align the treatment of SKD kits with CKD kits. KRA implemented the arrangement by issuing exemption codes for the imports.

However, the promised legal amendments were never enacted.

Following a post-clearance compliance review, KRA in September 2025 demanded Sh1.39 billion in unpaid customs duties. After D.T. Dobie objected, the taxman removed declarations falling outside the statutory audit period and reduced the assessment to Sh1.11 billion, covering imports made between September 2020 and May 2025.

DT Dobie argued that it imported the kits only after the government committed to granting duty relief and that KRA had consistently implemented the arrangement by clearing the consignments duty-free for several years.

The company said it had invested in local assembly in reliance on Treasury’s undertaking and argued that KRA had breached its legitimate expectation by later demanding payment.

The tribunal rejected the argument, holding that administrative assurances could not replace legislation.

“The exemption from customs duty is a creature of statute,” the tribunal ruled, adding that “the anticipated legal framework never came into being.”

It added: “To date, therefore, SKDs are not exempt from customs duty.”

The judges held that the duty-free clearance merely deferred payment and did not extinguish the tax liability.

“The duty was always due; what was deferred was its payment, not its imposition,” the ruling stated.

The tribunal further found that the National Treasury’s undertaking did not transfer the statutory obligation to pay customs duty from the importer.

“The appellant’s remedy, if any, for the National Treasury’s failure to meet its promise lies against the National Treasury. It does not lie in resisting a duty that the EACCMA fixes upon the appellant as owner,” the tribunal said.

It noted that under the East African Community Customs Management Act (EACCMA), import duty exemptions are available only where expressly provided by law or under the East African Community Common External Tariff.

“Exemptions are to be strictly construed, and the party asserting an exemption bears the burden of bringing the goods squarely within the exempting provision,” the tribunal said.

On legitimate expectation, the tribunal ruled that no public authority could create a tax exemption through administrative action where Parliament had not enacted one.

“There can be no legitimate expectation against clear provisions of the law,” it held.

The tribunal also dismissed DT Dobie’s claim that the assessment had been issued outside statutory timelines, finding that KRA had already excluded declarations falling beyond the five-year limitation period before confirming the final assessment.