Category: Business Daily

Behind every examination paper lies a quiet dream: of belonging, of opportunity, of a fair chance. When I think back to my own school selection years ago, choices were made around kitchen tables; imperfect, slow, occasionally unfair, but undeniably human. There was space for conversation, for persuasion, for hope.

Today, that space exists where electricity meets the internet: in school labs, cyber cafés or on borrowed devices.

Hope now submits through a digital form, though for those offline, the path remains uncertain. In the end, it’s the digital divide that decides who gets to submit at all.

From kitchen tables to algorithms

As a data scientist working in education policy, I have seen how technology can bring order and transparency to processes once vulnerable to manipulation.

The Ministry of Education’s digital selection platform, selection.education.go.ke, promises to do just that: align student placement with ability, interest and opportunity.

The Kenya National Examinations Council’s (Knec) presentation on the process outlines a system that places learners into five clusters: national, extra-county, county, sub-county, and private schools.

Placement is based on performance, learner preferences, school capacity and chosen career pathways (STEM, Social Sciences, or Arts and Sports Science).

Learners will select up to 12 schools, balancing aspiration with realism. It is a model designed for inclusivity, equity and transparency; a digital leap forward.

Yet here lies the tension. The ministry’s digital platform promises fairness through data. But fairness is not mathematical; it’s moral. And that’s the question at the heart of Kenya’s school placement reform.

Psychometrics measures what test designers define as ability. But ability is shaped by context. A child’s score reflects not just what they know, but what they have been exposed to: qualified teachers, textbooks, electricity, even peace of mind. The algorithm does not see these differences. It only sees the number.

Political theorists have long argued that fairness is not the equal treatment of unequals. True fairness is contextual justice: recognising structural disadvantages and responding to them. Kenya’s challenge, then, is not only to design a fair algorithm but also one that understands inequality.

This year marks a symbolic handover between two eras: the old Kenya Certificate of Primary Education (KCPE) system, where one exam determined destiny, and the new Competency-Based Education era, where continuous assessment and digital selection promise holistic fairness. The promise is noble, but the question still lingers: Can fairness be automated?

Proponents argue that a systematic digital process is better than the opaque, paper-based chaos of the past. They are not wrong, but “better than before” is not the same as “good enough.”

Learning from past mistakes

Kenya has seen this story before. When the university funding model shifted to data-driven “banding,” it sparked widespread criticism. Students were sorted by socio-economic status and performance, but the logic of the algorithm remained opaque. Many families felt misclassified, unseen and unheard.

The lesson is clear: data without dialogue breeds mistrust. As we roll out digital placement for Kenya Junior School Education Assessment (KJSEA) learners, transparency must be the foundation. The public deserves to know which data are used, how they are weighted and what values guide the design.

One practical step forward is back-testing: using historical data from previous placements to simulate how the new algorithm would have performed.

This means analysing prior placement records, performance data and school choices, to measure rates of accurate placement, satisfaction and retention.

Knec should work with independent researchers and data ethics experts to conduct this testing before full implementation.

Such testing would identify potential bias, flag data gaps and ensure the system places learners accurately before the real rollout.

It could also reveal what many fear: that the platform might misbehave at the worst possible moment. Because when systems fail, it’s not abstract. It’s thousands of lives delayed, dreams deferred.

What this moment requires

The elegance of the algorithm is not what achieves fairness in education, but the integrity of those who design, test and govern it. The ministry’s move toward digital placement deserves credit: it curbs corruption, limits political interference and expands access. Yet it must be anchored in human judgment.

In this new system, psychometrics can illuminate potential, but only people (teachers, parents, communities) can interpret it with empathy. If we combine the power of data with the wisdom of humanity, this could become one of Kenya’s most transformative education reforms. But if we surrender fairness to formulae, we risk creating a new elite of algorithmic privilege.

What does this require in practice?

Policymakers must publish the logic of the placement algorithm and let transparency build trust. Civil society organisations should independently monitor placement data for regional and gender equity. Researchers need to conduct backtesting and bias audits before we fully commit to this new system.

And parents and teachers must guide learners through the process, ensuring no child is left behind by a lack of information or internet access.

As this year’s KJSEA candidates complete their exams, the question is simple but profound: will each learner be seen as a datapoint to be sorted, or as a human possibility to be nurtured? This being the first CBE cohort preparing for senior school placement.

The real test isn’t whether the technology works. It’s whether it serves justice. Does it deliver fairness and equity to those who have been historically denied both?

The answer won’t be found in algorithms alone. Still, in our collective moral imagination, whether we make data a tool for dismantling inequality, or allow it to become another mechanism for reproducing the exclusions we aim to rectify.

The Kenya Revenue Authority’s recent public notice titled ‘TCC Enhancements’ falls short of a junta’s decree.

The six-point notice stipulates as a must-have for any TCC applicant in business to be compliant with Tax Invoice Management System (TIMS) registration, including Value-Added Tax (VAT) Special Table status.

This development deserves a four-point scrutiny. Specifically, how it affects small and medium enterprises (SMEs) whom it should benefit in a bid to shore up tax equity and fairness.

Section 34 of VAT Act sets Sh5 million annual turnover as legal basis for registered person. The mandatory TIMS notice invariably gives a knockout jab to any taxpayer in business regardless of this statute. The philosophy behind eTIMS was to leverage technology to enhance visibility of transactions and simplify record-keeping.

By fiat, the KRA constructively obviates the threshold by circumventing the law. Section 34 (1) (b), also created ‘moratorium rule’ of 30 days for newly registered persons. That’s also scattered to the four winds.

Globally, tax incentives are critical enablers to doing business. When we create stringent rules (outside the law), deploy enhancements (iTax) to preclude more from accessing lifeline services and distort best practices in business accounting, we inevitably kill entrepreneurship.

Take the case of a young SME trader who registers company as single director. Assume their aim is to access NYOTA fund, Sh50,000 and bid to supply counties with necessaries. Unwittingly, the TCC pre-qualification obligates him to acquire eTIMS gadget or laptop, at Sh40,000 whichever is lower hence, extinguishing the poor fellow’s NYOTA to ashes ab initio.

The KRA seems to have adopted the shoot-to-kill approach literally in implementing tax laws.

The contestations around Special Table Guidelines still remain as fresh as mint regarding underlying costs of input claims it chipped away, with six-month rule under section 17. The current notice assumes a dual-attack not only to section 34 but also undermines section 20, whereby hardship, inequity or expense may cause tax forfeiture. The taxman literally squeezes water off the rock.

It is a statutory obligation under section 67 that any regulations designed to enhance VAT collections be subject to approval by Parliament. The notice defies this reality by inviting the public to ‘stakeholder engagement on case-by-case basis’, after decree is issued.

That is a classical notion of asking the cart to pull the horse. It is sad when that cart is Mama Mboga.

While technology is key to deepening tax collections, KRA must balance compliance with empathy. It is imperative to act within the letter of the law lest it kills global brands at infancy while mistaking circumventions of the law for innovation.

Many Kenyans gracefully plan for weddings, mortgages, even holidays, but when it comes to retirement, little thought is given. Most count down the years, imagining that the small deduction on their payslips has been working as hard as they have.

However, for many working individuals, the worry is that, if there’s already a statutory pension scheme through the National Social Security Fund (NSSF), why should anyone bother with a private plan?

NSSF raised its minimum contributions from Sh400 (Sh200 from employee + Sh200 from employer) pre-2013 to a minimum wage-linked floor of Sh6,000 to Sh8,000, but experts say this is still not enough for the recommended 70 percent income replacement ratio at retirement.

James Juma of Equity Life Assurance says that many retirees receive pensions replacing only 20 to 30 percent of their final salary, which may not be enough to sustain their lifestyle.

‘Before the NSSF Act of 2013, the contribution was just Sh200 from both the employer and employee. You could contribute for 10 years and have little to show for it. Though the limits have since risen, it’s still not enough to sustain you,’ says Mr Juma.

70 percent replacement rule

He breaks it down in numbers.

‘Globally, the recommended income replacement ratio is 70 percent, which means if you earn Sh100,000 today, you should ideally retire with a pension of at least Sh70,000. The question now becomes, will your NSSF savings get you there? For most people, no,’ he says.

He argues that voluntary or private pension schemes, in these cases, now become a necessity to match what you would want to earn later in life.

However, Mr Juma says that convincing Kenyans to think long-term isn’t easy, especially in a country where the immediate financial pressures are unrelenting.

‘The bills are chasing you today, so how do you convince someone to split their already stretched income between their present needs and their future self?’ Mr Juma poses. Then, almost like a challenge, he adds, ‘The only person who will take care of the future you is the current you. Your children won’t, and neither will the government. Let compound interest do the heavy lifting.’

Where savings are invested

The expert shares that pension funds invest in government securities, equities, and corporate bonds, guaranteeing savers a minimum rate of return every year.

Additionally, he says fund managers also make money, taking a small percentage to cover management costs and distributing the lion’s share to members.

Additionally, managers create reserves during high-return years to buffer the low-return or negative years, which helps to protect the members’ statements and confidence.

Eric Kavivya, the Business Development Manager and lead financial coach at Liberty Life Assurance, offers a similar assurance.

‘When times are good, we might give you 18 percent. When they’re bad, you still get a guaranteed seven percent. We create reserves to smooth returns so you don’t wake up to a negative balance one year,’ he says. The small fee, he explains, goes into research, risk management, and administration, all to keep clients’ money protected even in downturns.

Yet, despite strong structures and decent returns, behaviour remains to be the biggest challenge. How do you convince a 24-year-old content creator earning Sh20,000 a month to start saving for retirement now?

‘We live in an age of instant gratification; it’s like choosing between one sweet today or two sweets tomorrow. Everyone wants the sweet now,’ Mr Juma says.

He urges young Kenyans to think in decades, not days. ‘If you save even 10 percent of your income, compound interest will do wonders. You can still enjoy your life, do your nails, travel, but secure your tomorrow.’

The power of compounding

Godwin Simba, a council member at the Association of Pension Trustees and Administrators of Kenya (APTACK), builds on that thought with a reality check.

‘At 25, if you save Sh5,000 every month for 25 years at an average return of 8 percent, you will have over Sh8 million by age 60,’ he says.

‘If you delay until age 45, that same Sh5,000 only grows to Sh1.8 million. You’re not saving to be rich, you’re saving to avoid being poor.’

For the workers in Kenya’s informal sector, the risk is even higher. With no formal retirement plan, one emergency can erase years of progress.

‘One calamity and you’re wiped out. Then you start depending on your sibling who saved. That’s not sustainable,’ says Mr Kavivya.

But the mistrust of financial systems runs deep. An audience member asked how many people were ‘eating’ their money during the recent African Pensions Conference and Expo 2025 held in Nairobi.

‘The players are few, but the focus shouldn’t be on who’s eating. It should be: Is your money growing? Is it safe? Will it still have value in 20 years? If you keep it yourself, chances are high you’ll spend it. Pension funds give you discipline and a fighting chance to age with dignity,’ observe Mr Simba.

The pension sector is now moving toward more inclusive and flexible products that meet modern financial realities.

The Retirement Benefits Authority (RBA) is developing bundled products that allow contributors to use part of their savings for housing, education, or short-term needs, while securing the remainder for retirement.

Additionally, the Post-Retirement Medical Fund also allows voluntary contributions of up to Sh15,000 monthly to cover healthcare costs in old age, especially crucial in a country where retirees spend up to 60 percent of their income on medical care.

The RBA aims to raise national pension coverage from 26 percent in 2025 to 34 percent by 2029 through outreach, policy reforms, and partnerships with education institutions and community organisations.

Financial literacy initiatives are expanding through schools, churches, and even cultural events like the Kenya Music Festival, where retirement planning is being integrated into their everyday conversations.

Kenyan pension sector now oversees about Sh2.5 trillion in assets, a sign of growth and public trust. However, its future depends on deepening that trust through transparency, education, and adaptability.

Fresh reforms

The Retirement Benefits Act of 2007 laid the groundwork for regulation and trust, but the sector is now undergoing fresh reforms that aim to strengthen governance and accountability.

Among them is the proposal to extend trustee tenures from three to five years, which is meant to ensure the continuity in managing the millions worth of savings. APTACK has been pushing to professionalise trusteeship by training members in governance, financial literacy, and investment decision-making.

Mr Simba terms one of the government’s recent decision to make retirement benefits tax-free upon withdrawal an important a turning point. He explains that the policy shift encourages saving and ensures that members walk away with the full value of their lifetime contributions.

Digital taxi apps, online delivery services and e-commerce platforms will be required to withhold and remit the 16 percent value-added tax (VAT) on supplies made through their platforms, following a High Court decision that is likely to rattle Kenya’s nascent gig economy.

In a landmark decision, the Kenya Revenue Authority (KRA) has been allowed to collect Sh82,248,150.74 in VAT from Sendy-the collapsed start-up that described itself as a digital marketplace, linking third-party transporters to customers-after the court found that the logistics firm controlled key aspects of its network, including billing and receiving payments in its own name.

The Tax Appeals Tribunal had ruled previously in favour of Sendy, agreeing with the start-up’s argument that it was not a provider of transport services but a platform provider.

The Tribunal held that the taxable supply of transport was made by third-party transporters to end customers, and that Sendy’s VAT should be limited to its commission.

That position was overturned by the High Court on appeal, effectively designating technology providers in the gig economy as VAT withholding agents. The court concluded that the Tribunal ‘erred in law’ in characterising the supplies made through Sendy’s platform.

‘For the foregoing reasons, this Court finds that the Tribunal erred in law in its characterisation of the supplies made through the Respondent’s platform,’ Justice Helene R. Namisi said in the decision of October 23.

‘An analysis based on the economic and commercial reality of the transactions, informed by persuasive jurisprudence on the VAT treatment of the platform economy, demonstrates that the Respondent (Sendy) exercises a decisive degree of control over the essential elements of the delivery service,’ the judgment added.

The High Court noted that by setting terms, authorising the delivery and authorising and collecting the charge in its own name, Sendy acted as a principal in the transaction.

‘It is, therefore, deemed, for VAT purposes, to have received the transport service from the third-party transporter and to have supplied that same service to the end customer. Consequently, the Respondent’s liability for VAT is on the full value of the consideration paid by the customer, and not merely on its commission.’

The verdict is expected to reverberate across the wider sharing economy, with the United Nations Conference on Trade and Development noting that Kenya’s e-commerce revenue was projected to reach Sh145.8 billion ($900 million) in 2024, with the number of users expected to hit 12.26 million.

Digital taxi and delivery platforms such as Uber, Bolt and Little Cab have consistently argued that they are ‘technology companies,’ not transport service providers.

Their position is that they connect passengers or customers with independent drivers or couriers through their apps, which means they are not employers responsible for drivers’ taxes, licences and statutory deductions such as pension and health insurance.

While the National Transport and Safety Authority and the Ministry of Labour have not formally classified drivers as employees, drivers’ associations have repeatedly sought recognition of employment-like status to access insurance and benefits from the ride-hailing companies.

Globally, courts have chipped away at the ‘just a tech platform’ defence.

In the United Kingdom, the Supreme Court ruled that Uber drivers are ‘workers,’ not self-employed contractors, entitling them to minimum wage, paid leave and pension contributions. Uber had argued it was a pure technology intermediary, but the court found it exercised significant control over fares and customer interaction.

The Kenyan ruling is also likely to affect online delivery apps such as Glovo and e-commerce platforms like Jumia and Kilimall, which receive payments upon delivery before remitting to merchants. The practical effect is to push platforms further into the tax net, with VAT computed on the full value of customer consideration where platform control is established.

Critics warn the decision could discourage participation in the gig economy, with some traders steering clear of platforms to avoid the 16 percent VAT. Proponents counter that the ruling simply aligns the tax burden with commercial reality, where platforms influence pricing, payments, and terms of service.

In Kenya, when platforms are classified as service providers, they must register for VAT and remit tax on the total fare, not just commission. If they are considered employers, they may also have to deduct Pay As You Earn and contribute to the National Social Security Fund and the Social Health Insurance Fund.

The 2023 Finance Act broadened the definition of a ‘digital marketplace’ to include any platform facilitating taxable supplies.

The High Court’s ruling now gives that framework sharper teeth by aligning tax liability with the degree of control platforms exert over transactions, potentially reshaping the cost structure-and compliance obligations-across Kenya’s platform economy.

Kenya is setting up a sovereign wealth fund that will be barred from investing in local bonds and stocks as it seeks a buffer against economic shocks and fluctuations in resource earnings.

A sovereign wealth fund is a State-owned investment kitty that is centered on managing a country’s surplus reserves to generate economic benefits for its citizens.

The Kenya Sovereign Wealth Fund will have three components – a stabilisation unit, an infrastructure investment arm, and a segment focused on savings, according to draft legislation.

It will get funds from the minerals and petroleum sector and invest the billions of shillings into foreign currency-denominated instruments, including investment-grade bonds, securities backed by multilaterals such as the World Bank and the International Monetary Fund (IMF) and deposits in offshore banks.

The draft Kenya Sovereign Wealth fund Bill, 2025 has also banned investments in speculative derivatives, unlisted real estate, private equity, arts, and commodities.

Proceeds from the investments will be used to invest in key sectors without repeating a debt binge that has strained public finances in recent years.

So far, it will have nearly Sh200 billion that Kenya earned from the mineral sector in the form of royalties, prospecting licences and acreage leases.

The offshore bias in investment is expected to serve as a natural hedge to returns generated from the fund, which are purposed to provide the national government with a buffer from fluctuations in resource revenues, finance strategic infrastructure projects and build savings for the future.

‘The fund shall not be invested in speculative derivatives, unlisted real estate, private equity, art and commodities,’ reads the bill.

‘The assets of the stabilisation component shall not be invested in securities listed at the Nairobi Securities Exchange.’

The sovereign wealth fund will be invested primarily in financial instruments denominated in internationally convertible currency, including deposits held at other Central Banks or the Bank for International Settlements.

Foreign securities shall be required to have an investment grade rating from an internationally recognised rating agency or have the backing of the IMF, the World Bank or any other sovereign State besides Kenya, with the guarantor also expected to have an investment grade rating.

This also rules out investments in Kenyan Eurobonds because they have been issued by the government and lack a high rating from the global agencies

The first part of the fund or a stabilisation unit shall be used to provide the national government with a buffer from fluctuations in resource revenues and manage extraordinary shocks that may affect macro-economic stability.

A second part of the fund, known as the Strategic Infrastructure Investment Component, shall finance infrastructure priorities in sectors including agriculture, transport, housing, energy, water, education and health while backing public-private partnership (PPP) projects.

The last part of the fund dubbed Urithi shall build a savings pool for the future.

‘The object and purpose of the Future Generation (Urithi) Component is to build a savings base for future generations by providing an endowment to support strategic infrastructure for future generations when the revenues from minerals and petroleum are depleted,’ the draft bill adds.

Norway’s Government Pension Fund Global, with over $1.7 trillion in assets, is the world’s largest sovereign wealth fund at present.

‘The component shall also distribute wealth across generations.’

The fund shall be primarily financed by resource revenues, including the government’s share of profit derived from upstream petroleum operations, petroleum and mining royalties and proceeds from divestment of petroleum and mining interests held by the government.

The fund or funds can take the form of stabilization, savings, public benefit, strategic development or serve as a foreign currency reserve.

Norway’s Government Pension Fund Global, with over $1.7 trillion in assets, is the world’s largest sovereign wealth fund at present.

Other top sovereign wealth funds are in China, the United Arab Emirates (UAE), Kuwait, Saudi Arabia, Qatar and Hong Kong.

Kenya’s Sovereign Wealth Fund will be vested in the National Treasury in trust for the citizens of Kenya.

The country has previously marred the creation of a sovereign wealth fund, especially after the 2012 discovery of multi-billion oil deposits in Turkana.

The Central Bank of Kenya (CBK) shall hold a bank account for the fund known as the holding account, which shall be used for receiving, holding and disbursing all the proceeds of the fund.

The Stabilisation component of the fund shall be financed using transfers from the holding account and fifty percent of self-generated income.

The other half of the generated income from the component shall prop the funding base for the future generation component, with the Urithi kitty also receiving half of the proceeds from interest generated from the strategic infrastructure component.

The strategic infrastructure component which shall also be funded in part by transfers from the holding account, shall also keep 50 percent of its interest income.

Consumers may find some relief in cheaper products in the coming months after factory costs dropped to levels last recorded 30 months ago.

Latest data from the Kenya National Bureau of Statistics (KNBS) shows that the Producer Price Index (PPI), which tracks changes in selling prices received by domestic manufacturers or producers for their output, stood at 134.78 as of the close of September 2025, levels last seen in March 2023.

Producer inflation is a measure of the average change in selling prices received by domestic producers for their output, and it is tracked by PPI.

The cost of electricity, gas, steam, and air conditioning supply fell by 2.03 percent, as water supply and waste management dropped by 2.69 percent.

‘The overall producer prices in September 2025 decreased by 2.45 percent compared to June 2025 prices,’ wrote the KNBS.

The sustained fall in producer costs indicates continued softening in production expenses, partly supported by lower global commodity prices and a stronger shilling during the review period.

The easing producer costs come at a time when the Central Bank of Kenya has maintained a relatively accommodative policy stance, cumulatively lowering the benchmark lending rate by 3.75 percentage points since August last year to support private-sector lending.

But while businesses pass on increases in the cost of raw materials in the form of high retail prices, a fall in PPI does not guarantee reprieve to consumers.

This is mainly because businesses can opt to widen profit margins when the cost of raw materials drops, denying consumers anticipated gains.

The Consumer Price Index, which measures the actual change of retail prices, rose slightly to 146.56 in September, up from 146.21 the preceding month, pushing monthly inflation up by 0.2 percent.

Longhorn Publishers reported a larger net loss of Sh261.4 million in the year ended June, due to a substantial drop in sales in the Kenyan market.

This bigger loss, compared to Sh237.9 million a year earlier, extended the company’s dividend drought.

Sales in the review period fell by 55.8 percent to Sh679.8 million, with Longhorn attributing the decline to reduced demand from households and the government.

‘Revenue for the year declined by 56 percent . reflecting disruption in both the private and government markets,’ the Nairobi Securities Exchange-listed firm said in a statement.

‘Final approvals for revised [learning] materials were issued only in January 2025, creating uncertainty at the start of the school year. Parents deferred purchases, government procurement was delayed, and Sh463m of revenue was consequently pushed into the 2025 financial year.’

The company reduced operating expenses by Sh82.8 million to Sh328.1 million in the review period, but this was not enough to compensate for the revenue decline.

‘Management reduced operating expenses by 20 percent, but the company still recorded an operating loss of Sh35 million (excluding provisions and impairments), compared to an operating profit of Sh165 million in the prior year,’ the publisher said.

Longhorn says it has had a turbulent operating period since the introduction of the Competency-Based Curriculum (CBC) in Kenya, its biggest market.

‘The past seven years have been a testing period for the education sector and for the company. The transition from the 8-4-4 system to the Competency-Based Curriculum (CBC) required significant investment and adaptation,’ the company said.

‘Between 2018 and 2025, the company invested over Sh714 million in CBC content development, absorbed Sh254 million in inventory and debtor impairments, and wrote off Sh149 million in development costs.’

Longhorn expects costs to fall and sales to rise going forward as the CBC settles down.

‘With curriculum rationalisation complete and final CBC approvals in place, stability is expected to return to the sector. Development costs will decline, while clarity in curriculum requirements should support renewed sales momentum,’ the company said.

With the rollout to Grade 12 nearing completion, the business is positioned to move into a more stable and profitable phase, Longhorn added.

The company noted that it has secured government contracts and anticipates stronger uptake in the private market.

Longhorn said that its digital platforms – now serving more than 300 schools and 50,000 learners – continue to grow, providing an additional engine of expansion.

The government gave up an additional Sh4.6 billion in excise duty in 2024 compared to 2023, following a surge in the supply of alcohol to military canteens and increased local assembly of vehicles.

State tax expenditure is the value of taxes forgone due to waivers, exemptions, or breaks on certain commodities or entities to support certain groups, industries, or individuals.

The spending on excise duty rose 37 percent to Sh16.9 billion in the year to December 2024 from Sh12.3 billion a year earlier, according to the latest Tax Expenditure Report published by the National Treasury.

This came amid an overall drop in the government’s tax expenditure over the same period, which decreased by 22.2 percent to Sh286.5 billion from Sh368.4 billion, driven by the latest reforms to boost tax efficiency, according to the Treasury.

The largest increment on excise tax spending was on import excise duty, which nearly tripled to Sh6.2 billion from Sh2.1 billion in 2023, largely driven by the growing local assembly of motor vehicles.

‘This underscores a deliberate policy decision by the government to support and promote local manufacturing,’ said the Treasury in the report.

Imported cars are charged an excise duty of between 10 percent and 35 percent, depending on engine type and size, while locally assembled ones are fully exempt to support the domestic manufacturing industry.

The rise in domestic excise duty expenditure by the government was, on the other hand, driven by increased purchases of alcoholic beverages by the Defence Forces Canteen Organisation, which sells duty-free products to military officers.

Excise duty forgone on alcohol sold to the soldiers rose from Sh680.9 million in 2023 to Sh711.8 million last year, while those foregone on non-alcoholic drinks rose by Sh2.4 million from Sh14.7 million to Sh17.1 million.

In conversations about climate change and the urgent need to build climate-resilient economies, banks, investors, and governments often take centre stage. Yet there is one sector, which is just as critical to enabling this transition: insurance.

Green investments cannot scale without insurance. Every wind farm, geothermal plant, solar park, or electric vehicle depends on the assurance that risk can be managed.

Insurance forms the invisible backbone of the green economy and is one of the most powerful enablers of green growth. By taking on risks that would otherwise deter financiers, insurers help mitigate the risks associated with green investments, giving banks and investors the confidence to channel capital into clean energy projects and climate-resilient infrastructure.

However, their role extends beyond protection. Insurance, at its core, is about people. It is about safeguarding lives, livelihoods, and progress.

As climate-related shocks such as floods, droughts, and extreme storms intensify, the strain on communities, businesses, and national economies across Africa is unprecedented. For families and enterprises in East Africa, access to insurance cushions these shocks and provides a pathway to recovery and resilience.

Beyond protection, insurance also serves as a compass for the flow of capital. Through underwriting decisions and risk pricing, insurers can guide capital allocation toward low-carbon, climate-resilient ventures, ensuring that markets reward sustainability rather than perpetuating high-carbon risks.

This catalytic role is increasingly recognised at the global level. The United Nations Environment Programme’s Principles for Sustainable Insurance emphasise that insurance is not only about transferring risk, but also about preventing and transforming it.

Similarly, the OECD highlights climate risk insurance as a critical tool in strengthening adaptation, particularly in vulnerable regions in Africa.

Across the continent, insurers are already putting this into practice-from providing cover for hydroelectric power plants, dams, and solar energy installations to underwriting geothermal and wind energy projects.

By taking on these complex and capital-intensive risks, the insurance sector is helping catalyse Africa’s green transition, building the confidence that enables investors, governments, and communities to commit to clean and resilient energy systems.

In underwriting these projects, insurers transfer risk and actively catalyse East Africa’s green transition, building the confidence that enables investors, governments, and communities to commit to clean and resilient energy systems.

To sustain this momentum, insurers must also evolve how to understand and manage climate risk. Increasingly, companies are adopting internal climate risk assessment tools that evaluate the exposure of corporate and small and medium enterprise policyholders to both physical and transition risks.

These tools integrate indicators such as sectoral vulnerability, geographic exposure to extreme weather events, and transition factors like regulatory shifts, carbon intensity, and market changes.

The green transition is not just an environmental imperative; it is an economic one. Insurance will determine which investments thrive and which falter in the face of climate uncertainty. For insurers, the mission is clear: to build confidence in a future that is cleaner, fairer, and more resilient.

By mapping climate risk across portfolios, insurers enhance their underwriting, protect SMEs, ensure that capital flows to climate-resilient activities and consequently empower clients to self-assess and be more resilient.

Globally, the opportunity before the insurance industry is enormous. If countries deliver on their current renewable energy targets, the related investments would generate additional premiums from the energy sector of $237 billion by 2035, a tenfold increase compared to $22 billion in premiums from oil, gas, and coal insurance paid in 2022.

Even with slow progress, the potential for insurers to unlock green growth remains vast.

Public universities in Kenya will benefit from a Sh9.5 billion ($73.31 million) loan from the African Development Fund-the concessional lending arm of the African Development Bank Group (AfDB), aimed at strengthening science and technology education.

Implemented in partnership with the Ministry of Education, this financing marks the second phase of the Support for Higher Education, Science and Technology (HEST) Project.

The initiative will modernise 19 public universities by equipping them with advanced laboratories, updated teaching tools, and improved digital learning infrastructure.

Three engineering centres of excellence and a science and technology park will also be established, providing spaces where students and researchers can transform innovative ideas into practical business and industrial solutions.

‘For many, education remains the surest path to a better life,’ said Hendrina Doroba, Division Manager for Education and Skills Development at AfDB.

‘We’re helping Kenya’s young people gain the skills that employers need today-and the confidence to create their own jobs tomorrow.’

Similarly, the HEST II will fund scholarships for 103 university lecturers, provide retraining for academic staff in line with emerging technological needs, and implement a competency-based education system.

The initiative will also promote youth innovation and entrepreneurship by offering training, mentorship, and incubation support to more than 100 start-ups, providing young innovators with the necessary space and resources to grow their enterprises.

The first phase of the project, HEST I, launched in 2012, laid the groundwork by upgrading eight public universities, modernising laboratories, and enhancing engineering and applied science programmes. It also supported staff training, curriculum review, and stronger links between academia and industry.

The second phase involves rolling out the initiative nationwide to ensure that all regions benefit from a more equitable, innovative and well-connected higher education system that supports Kenya’s Vision 2030 goals.

It is expected that the project will benefit over 20,000 students by 2030, including 8,000 young women, and generate approximately 5,000 direct and indirect jobs.