Category: Business Daily

For many parents today, raising a child increasingly comes with the pressing reality of affording quality education. What was once seen as a straightforward pathway to opportunity, has evolved into a high-stakes financial commitment, one that can shape not only a child’s future, but also a family’s long-term stability.

In the 19th century, American education reformer Horace Mann described learning as the ‘balancing wheel of social machinery,’ a force meant to level society. Today, that promise is under strain. While learning remains one of the most powerful tools for upward mobility, access to quality schooling is steadily becoming a divider rather than an equalizer.

Across the world, and particularly in emerging economies, education continues to shape the trajectory of individuals, communities, and nations alike.

The 2024 Education Finance Watch (EFW) report by the World Bank and UNESCO indicates that total spending on education by governments, households, and donors has steadily increased over the past decade. This reflects a growing recognition of learning as a shared societal investment, with stronger participation from both public and private stakeholders.

However, the report also highlights a critical gap: despite increased investment, there are limited gains at the learner level, especially in countries with rapidly growing populations where budgets are often stretched thin. As a result, spending stagnates, creating challenges in supporting foundational literacy and numeracy.

To truly drive impact, stakeholders must become more deliberate in prioritising what works, adopting solutions tailored to local realities and ensuring that every shilling spent delivers measurable, lasting outcomes.

The conversation on funding must also evolve beyond access to include sustainability, particularly how families can consistently support a child’s learning journey without compromising overall well-being.

At a household level, this is where parenting and financial planning intersect. Yet, the reality is complex. Many Kenyan households grapple with school fee-related challenges, with annual back-to-school periods often marked by financial strain.

Millions of students’ risk missing out due to costs associated with fees, uniforms, and transport. Rising inflation, a high cost of living, and a Sh76.9 billion funding gap in secondary education have made these expenses increasingly difficult to manage.

It is within this context that innovative financial solutions supporting a culture of saving become critical.

One such solution is Jubilee Life’s Faida Elimu Insurance plan, designed to combine long-term savings, investment growth, and financial protection. At its core, it ensures that a child’s learning journey remains uninterrupted, even in the face of life’s uncertainties.

What sets the plan apart is its dual approach. It encourages financial discipline through consistent, long-term savings toward a defined goal, while also providing a safety net through life cover.

This protection helps cushion families against income shocks, one of the leading causes of disrupted schooling. In doing so, it shifts education financing from a reactive, term-by-term burden to a proactive and structured plan.

Additionally, the plan reflects the realities of the modern Kenyan household by offering flexible premium payment options, lowering the barrier for families who may feel excluded from formal financial planning tools. Being investment-linked, it also enables parents to grow their contributions over time, helping them keep pace with rising education costs.

Beyond individual households, solutions like Faida Elimu play a broader developmental role. They help ensure more children stay in school consistently and transition smoothly across learning levels.

This supports national goals of building human capital and strengthening economic resilience, ultimately restoring education to its rightful place as an equalizer, where opportunity is not defined by immediate financial circumstances.

Why do endless AI prompts, knowledge and frameworks freely available, not really make one smarter, cleverer? Is there a difference between knowing and wisdom? Does the quality of your thoughts about business make any difference? To be on the forward cutting edge, does it make sense to look back?

Hermann Hesse wrote Siddhartha over a century ago – helping him win a Nobel Prize for literature. ‘It radiates more genuine wisdom than just about any novel ever published’ said novelist Tom Robbins.

A global cult classic among the youthful minded, it’s required reading for a perceptive manager, tired of AI prompts and stale recycled business doctrine, who wants to break out of the cage of convention.

The story follows Siddhartha, a young Brahmin who has everything. He has the looks, intelligence, and a clear path to success, but feels empty inside.

Eventually, he leaves home, becomes an ascetic Samana, wandering with no worldly possessions, then a lover of Kamala, then an affluent, successful businessman. Finally, he nearly dies by a river, before understanding what he’d been searching for all along.

It’s a simple story. But the lessons inside it cut through centuries of noise – and paradoxically apply to Kenyan managers today, aiming to be on the thinking cutting edge. Several lessons standout.

Business wisdom cannot be taught – it must be lived

Skills, knowledge and mindset are all we have, yet knowledge is the booby prize. Young job searching graduates know this. They may have the book learning, the theory, but it does not seem to make a difference. In the age of AI, intelligence – knowledge is just about free.

Knowledge and wisdom are very different. Business wisdom only comes from having had the experience. ‘Been there, done that.’ Having to make a tough decision, when things are confusing, constantly shifting, when neither choice seems attractive.

One of the central messages in Siddhartha is the value of lived experience, both good and bad.

In the novel, Siddhartha meets the Buddha himself, who is the enlightened one, and still walks away. Siddhartha realises that no teaching, no matter how perfect, can give him what he’s looking for. Experience is the only real teacher.

You can read every book, prompt AI to share all its secrets, follow every business guru, and apply every framework and memorise every business principle. But until you’ve actually lived through something, made the mistakes, felt the consequences, you don’t truly know it. Words are signposts. But you have to walk the path, nobody can do it for you.

External success won’t fix internal emptiness

‘Siddhartha has everything going for him at the start. He’s loved. He’s admired. He’s on track for a prestigious life as a Brahmin priest. And he’s still miserable. This is a trap so many fall into. They think the next achievement, the next milestone, the next level of success will finally make them feel whole. But it doesn’t work that way. External validation can’t fill an internal void’ advises Alex Mathers.

Silicon Valley value of three age old skills

When faced with a difficult situation, it helps to return to the moment in the book when Siddhartha is asked what skills he possesses. His answer is simply: ‘I can think, I can wait, I can fast.’ Is this really practical advice, in our hyper modern ‘always on’ world? One AI wizard thinks so.

‘For the first part ‘I can think’ as the Roman emperor Marcus Aurelus said; ‘The quality of your life is determined by the quality of your thoughts’. For the second part ‘I can wait’ patience and waiting often is indeed the optimal decision when facing a problem. Time does bring clarity and depth of understanding. For the third part ‘I can fast’. When needed being able to live and flourish with less, is a prerequisite of being free when the mind the body and society all are trying to put you in cages’ says MIT computer scientist Lex Fridman.

Siddhartha had the advantage of the experience of being a wandering aesthetic Samana, with nothing but the robe on his back. While passing through the stage of being a prosperous merchant he saw things like money, petty pleasures, petty honours really had little real value.

‘He saw people scold and insult one another, saw them wailing over aches and pains that would just make a Samana smile, suffering on account of deprivations a Samana would not notice’ writes Hesse.

While in his time in business, Siddhartha sees ‘Whose minds are like those of little children. Most people are like a falling leaf as it twists and turns its way through the air, lurches and tumbles to the ground. Others, though-a very few-are like stars set on a fixed course; no wind can reach them, and they carry their law and their path within them.’

Thanks to his lived experience, Siddhartha had the ability to remain detached, slightly apart, just observing, when working with his business partner Kamaswami.

Hesse writes ‘He seems only to be playing at doing business. Never do the transactions have any real effect on him; never are they his master; never does he fear failure or worry over a loss.’ Think, pause and notice cravings.

Government spending on day-to-day operations such as office supplies, fuel, travel and utilities has surged by more than 50 percent to cross the Sh1 trillion mark, a year after President William Ruto’s administration imposed austerity measures in response to the Gen Z-led anti-tax protests.

Fresh Treasury data shows recurrent expenditure on operations and maintenance (O and M), which excludes salaries and wages, hit Sh1.05 trillion in the nine months to March 2026, compared to Sh699.30 billion spent in the same period of the previous financial year.

The costs accounted for nearly a third (32.27 percent) of Sh3.26 trillion total government expenditure in the review period compared with a quarter (25.9 percent) in the prior year.

The spending exceeded the Treasury’s target of Sh784.17 billion by Sh267.90 billion, representing a deviation of 34.16 percent and underscoring the rapid rebound in government consumption expenditure after last financial year’s cuts.

The jump marks the first time operational expenditure has crossed the trillion-shilling threshold within nine months, highlighting the rising cost of running government despite repeated pledges to rein in spending.

Operations and maintenance expenditure covers the day-to-day running of government, including fuel, utilities, travel, office administration, hospitality, training, maintenance, consumables and other routine operational costs incurred by ministries, departments and agencies.

The latest surge came just a year after recurrent O and M expenditure had fallen for the first time since the Covid-19 pandemic, dropping by 11.8 percent in the period that ended March 2025 as the government implemented emergency spending cuts following the collapse of the Finance Bill 2024.

The withdrawn Bill had sought to raise Sh344.3 billion in new taxes but was abandoned after widespread Gen Z-led protests against higher taxation and the rising cost of living.

The demonstrations triggered one of the biggest fiscal crises facing President Ruto’s administration, forcing the government to slash spending after losing a key source of additional revenue for the 2024/25 budget.

At the time, Treasury Principal Secretary Chris Kiptoo acknowledged that the State had been pushed into an unfamiliar austerity regime, after ministries and agencies failed to receive the allocations they had sought.

‘What we ended up with was more like a 50-50 [situation] where we had to take more debt and reduce expenditure by almost Sh170 billion. This is a space where most government institutions had never been because… they did not get what they wanted,’ Dr Kiptoo said last year while explaining the budget cuts that largely targeted operations expenditure.

The austerity measures announced at the height of the anti-government protests included the removal of budgets for refurbishment and partitioning of government offices, suspension of the purchase of new vehicles except for security agencies, and a 50 percent cut in expenditure on renovations, travel and hospitality.

The government also halted the acquisition of new vehicles – some of which can cost more than Sh30 million each – for the first six months of the financial year, ordered ministries to halve the number of advisers and directed enforcement of mandatory retirement for public servants upon attainment of the age of 60 years.

President Ruto further scrapped budgets for the offices of the First Lady and Second Lady and removed confidential allocations for State House and other public offices as part of efforts to contain expenditure following the collapse of the tax plan.

The protest-driven austerity measures came on top of earlier directives targeting non-essential spending such as printing, advertising, communication supplies, training, hospitality, furniture purchases, refurbishment works, research studies and feasibility assessments.

The cuts had temporarily slowed the growth of recurrent expenditure, offering brief relief to taxpayers who had complained about rising taxes amid stagnant earnings and a high cost of living.

However, the latest Treasury figures now suggest the restraint may have been short-lived as operational expenditure has accelerated sharply in the current financial year.

The Sh1.052 trillion spent by March this year is higher than the full-year operational expenditure recorded three years ago at Sh927.09 billion for the period ended June 2023. It is also close, or about 94 percent of Sh1.12 trillion operational spending for the entire last fiscal year ended June 2025, highlighting the speed at which the cost of government is rising.

Treasury data shows recurrent O and M expenditure for the review period stood at Sh457.67 billion in 2019/20 before falling to Sh439.83 billion in 2020/21 (Covid period) and then rising to Sh566.54 billion in 2021/22.

The spending climbed to Sh654.06 billion in 2022/23 and Sh793.07 billion in 2023/24 before falling to Sh699.30 billion in the period ended March 2025 amid the austerity drive.

The latest increase means recurrent operational spending has more than doubled in six years, growing by about 130 percent since 2019/20.

The rebound is likely to reignite concerns about Kenya’s fiscal discipline at a time when the country faces mounting debt-servicing obligations, rising interest costs and pressure from lenders such as the International Monetary Fund to narrow budget deficits.

Critics have repeatedly argued that recurrent expenditure is consuming an increasingly larger share of tax revenues, leaving less room for development projects and productive investments that could stimulate economic growth.

The spending surge is also expected to raise fresh questions over whether the government has managed to sustain expenditure reforms announced during the height of the deadly youth-led protests.

While the Treasury has previously defended higher recurrent expenditure as necessary to maintain delivery of public services and security operations, the latest figures could complicate the government’s attempts to convince investors and lenders that it remains committed to fiscal consolidation.

With three months remaining before the end of the financial year in June, the latest data points to the possibility of a record annual operations bill, potentially deepening scrutiny over the cost of running government in a period of high taxation and economic strain.

The fate of more than 300 newly recruited employees of the Kenya Ports Authority (KPA) now hangs in the balance after human rights organisations moved to court seeking to nullify the entire recruitment exercise.

In their filings submitted on Friday, May 15, the petitioners are citing alleged violations of constitutional principles of transparency, fairness and accountability. They say the exercise was conducted in secrecy, lacked disclosure of key information and may have been influenced by extraneous considerations.

One of the major complaints is that KPA allegedly failed to publish the list of shortlisted candidates, a move the petitioners say undermined transparency from the outset.

‘This omission made it impossible for applicants and the public to verify whether the process was inclusive and

competitive,’ said Mr Hussein Khalid, director of Vocal Africa.

The petition has been filed jointly with Muslims for Human Rights (Muhuri) and She Rises Organisation.

They have sued KPA, the Public Service Commission (PSC) and the Attorney-General. Eight individuals affected by the recruitment have also been listed as interested parties.

The petitioners argue that a public institution of KPA’s stature is expected to operate within strict accountability frameworks, especially when dealing with mass recruitment exercises attracting thousands of applicants.

They raised concerns over the use of virtual interviews without adequate disclosure of evaluation criteria or publication of outcomes for unsuccessful candidates, saying this created uncertainty and eroded confidence in the integrity of the exercise.

The petition further alleges that individuals who neither participated in the interviews nor appeared on the shortlist were nonetheless issued with employment offers, pointing to possible irregularities.

The petitioners also accuse KPA of failing to comply with Article 35 of the Constitution on access to information, saying formal requests for disclosure of recruitment data, including shortlisted candidates, interview results and final appointment lists, were ignored.

Concerns have also been raised about possible violations of constitutional requirements on regional balance and inclusivity. Petitioners claim successful candidates may have been disproportionately drawn from certain regions, raising questions about compliance with national diversity principles.

They further argue that failure to issue regret letters to unsuccessful candidates amounted to procedural unfairness, leaving applicants in limbo without communication of outcomes.

They are now seeking sweeping court intervention to halt and overturn the recruitment exercise. Among the orders sought are a declaration that the process is unconstitutional and void, an order compelling KPA to conduct a fresh recruitment in

compliance with constitutional and statutory standards, and a directive requiring full disclosure of all recruitment records.

They also want declarations that failure to publish successful candidates, issue regret letters and communicate outcomes amounted to violations of the constitution.

However, the Centre for Litigation Trust is dismissing the petition as malicious and time-barred.

Executive director Julius Ogogoh instead wants efforts channelled towards development, governance and

national cohesion rather than disputes.

‘The recruitment exercise concluded in February, so why bring a case now? Those who were recruited are Kenyans and deserve to serve in the positions they applied for,’ Mr Ogogoh said.

Kenya’s economy is still growing, but the latest numbers from the Economic Survey 2026 suggest that the nature of that growth is changing.

Beneath the headline GDP figures lies a more complex story: growth is slowing, investment remains relatively weak, informality continues to dominate employment, and the economy remains heavily dependent on imports and household consumption.

Real GDP growth slowed from 7.6 percent in 2021 to 4.6 percent in 2025. While this still represents positive expansion, the economy is no longer experiencing the strong post-pandemic rebound seen earlier in the recovery cycle.

Estimates of the output gap also suggest that the economy is operating slightly below potential, implying that productive

capacity is not being fully utilised.

This matters because slower economic momentum directly affects jobs, incomes, business activity, and revenue performance.

The most important story in the KNBS data is that Kenya’s economy is increasingly being driven by consumption rather than investment.

Private consumption consistently accounts for about 72-74 percent of GDP, making household spending the dominant engine of growth.

Government consumption contributes another 13-14 percent. By contrast, gross fixed capital formation (GFCF)-which captures investment in machinery, infrastructure, buildings, factories, and productive assets-remains relatively modest at

about 18-20 percent of GDP.

This is a critical signal. Economies that sustain rapid industrialisation and productivity growth typically maintain significantly higher investment rates.

Kenya’s relatively low level of fixed capital formation suggests that while consumption remains resilient, investment in future productive capacity is not expanding at the same pace.

In practical terms, the economy appears to be growing more through spending than through large-scale expansion of productive sectors.

The composition of growth reinforces this pattern. Private consumption contributed between 3.5 and 5.4 percentage points to annual GDP growth during 2022-2025, making it by far the largest growth driver. Investment contributed only

about one percentage point annually, while imports consistently reduced growth, reflecting Kenya’s continued dependence on imported goods, fuel, machinery, and intermediate inputs.

At the same time, the labour market remains overwhelmingly informal. Informal employment rose to 18.1 million workers in 2025 and now accounts for approximately 84 percent of total employment. Nearly 60 percent of informal employment is concentrated in wholesale and retail trade, hotels, and restaurants.

This means that although the economy continues to generate jobs, much of the expansion is occurring in low-productivity and weakly formalised sectors.

This has major implications for incomes, productivity, and economic formalisation. A highly informal economy limits the

growth of formal wage employment, reduces pension coverage, weakens financial inclusion, and lowers the visibility of economic transactions.

It also means that a relatively narrow group of formal sectors carries a disproportionate share of economic and fiscal activity. Sector data illustrates this imbalance clearly. Financial services contribute disproportionately to economic activity

relative to their size, while ICT and manufacturing also demonstrate high formal-sector productivity.

By contrast, large sectors such as agriculture, transport, and parts of real estate remain comparatively weakly formalised relative to their contribution to GDP. This suggests that large parts of the economy continue to operate with lower levels

of traceability, documentation, and integration into the formal system.

Financial conditions also help explain why many businesses still perceive the economy as difficult despite continued growth. Lending rates remained elevated at 14.8 percent in 2025, even after monetary policy easing began.

High borrowing costs continue to constrain private sector expansion, particularly in construction, manufacturing, trade, and household credit markets.

Private sector credit growth slowed sharply in 2024 before recovering modestly in 2025, indicating that financing conditions remain relatively tight. Externally, Kenya remains structurally import-dependent.

Imports reached Sh3.06 trillion in 2025 compared to exports of Sh1.69 trillion, leaving a large trade deficit and continued pressure on the current account.

Export growth has slowed sharply, while import growth also moderated significantly in 2025, partly reflecting weaker domestic demand and tighter financial conditions.

Unaitas Sacco is lining up a Sh521.56 million mixed-use development in Runda to host its headquarters, banking hall, data centre, strip mall and restaurant, marking a strategic shift toward asset-backed expansion.

The sacco, which is the sixth largest in the country with an asset base of over Sh26 billion, says the various premises including offices will be on twin towers. The mall will be three-storey while the office block will be seven-storeyed, with the entire project occupying 16,266 square metres.

The strip mall will host a Unaitas branch and retail tenants, while the office block will house its headquarters, data centre and additional office space for lease. The project signals that Unaitas plans to relocate its head office from the current Cardinal Otunga Plaza in the Nairobi Central Business District.

Unaitas, which is seeking approval from the National Environmental Management Authority (Nema) to proceed with the project, says the development will convert its idle land within the Runda area in Westlands along the northern bypass into an income-generating venture.

‘The main objective of the proposed project is to construct a mixed- use development which would serve as the proponent’s head office, data centre and a banking branch while still allowing for lettable spaces which would create room for various business, ventures and offices,’ reads the impact assessment report submitted to Nema.

The project will neighbour several developments, including the Glee Hotel that sits directly opposite the site, car selling yards that dominate the area, as well as Githogoro village and Runda Estate.

The development adds to the rising commercial activity in the Runda-Kiambu Road corridor, where projects such as Runda Mall have emerged along the northern bypass. The site is located about 300 metres from the Kiambu Road-Northern Bypass junction towards the Ruaka direction.

‘The proposed mixed-use development, therefore, has strong potential to contribute positively through direct and indirect employment through skilled and unskilled labour demand, increased commercial space, and economic stimulation of the area,’ reads the document.

Unaitas was registered in Kenya in 1993 as Muramati Sacco, originally serving tea farmers in Murang’a, Maragua and Thika before rebranding. The sacco has since expanded its membership to include small and medium-sized enterprises and salaried workers across the country, growing to become the sixth largest in Kenya.

The top five saccos by asset base as of 2024 were Mwalimu National (Sh68.89 billion), Stima (Sh66.51 billion), Kenya National Police (Sh59.83 billion), Harambee (Sh38.7 billion) and Tower (Sh28.04 billion).

Unaitas’ asset base hit Sh29.6 billion in 2025 from Sh26.1 billion in the previous year, with deposits of Sh15.8 billion from membership of over 458,000.

The High Court has declined to compel the Jomo Kenyatta Foundation (JKF) to deposit Sh109 million in an interest earning account for a disputed debt owed to a printing firm.

Printing Services Ltd was contracted to print and produce various JKF titles. Other than that, Printing Services acts as a key reference point to verify authentic JKF publications to weed out fake issues.

The court observed that JKF had demonstrated financial distress, as evidenced in a letter to the National Treasury showing revenues dropped from Sh1.3 billion to Sh121 million though the period over which sales declined was not defined.

The court said compelling the company to deposit the amount as sought by the publisher would effectively shut it down before any dissolution process begins.

It also lifted an injunction stopping plans to wind up or divest from JKF which is owned by the government. ‘In the foregoing, I find that the plaintiff’s (Printing Services Ltd) application dated 30th April 2025 has no merit and it is dismissed but with no order as to costs,’ said the court.

Printing Services Ltd stated in the application that JKF had admitted the debt in writing in a letter on January 13, 2025, but has failed, refused, or neglected to pay.

The printing and publishing firm asked the court to compel JKF to deposit the amount and place a temporary injunction restraining the government from implementing any decision to dissolve, wind up, or divest from the State corporation.

In an affidavit, Printing Services Ltd director Dhillon Malkiat Singh said failure to pay the money was causing serious financial strain, impairing its ability to pay employees and sustain operations.

He stated that through a Cabinet memo on January 21, 2025, the government proposed the dissolution or divestiture of JKF, and if that happened without paying the debt, the publisher would have no legal entity to sue for recovery, rendering any future judgment useless.

JKF opposed the application through its managing director, David Kamau Mwaniki, saying the orders sought were premature and illegal.

Mr Kamau argued that compelling a State corporation to deposit money in court or an escrow account violates constitutional principles as all expenditures must be approved by the National Treasury and Cabinet Secretary.

Nurses and midwives are the steady hands in emergencies, the calm voices in crisis, and the constant presence at life’s most vulnerable moments.

Yet beyond the applause lies a harder truth: too few professionals are carrying too much of the burden.

Beneath the surface, many nurses are at breaking point; working under intense pressure in underfunded systems, navigating rising patient expectations, frequent litigation threats, public scrutiny on social media, inadequate staffing, limited supplies, delayed salaries, and at times even workplace violence. These realities rarely make it into the celebratory speeches.

Nurses and midwives form the backbone of healthcare delivery. According to WHO, they make up nearly half of the global health workforce. Yet demand for care continues to outpace supply. Population growth, the increasing burden of chronic diseases, and the lessons of the Covid-19 pandemic have exposed just how thinly stretched this workforce has become.

The numbers are sobering. Globally, there is an estimated shortage of about five million nurses, with sub-Saharan Africa accounting for about 89 per cent of this gap, despite having only about 3.0 percent of the world’s 27.9 million nurses.

In Africa, the density stood at about 17.78 nurses per 10,000 people (2020). In Kenya, the situation is even more constrained. The country has about 12 nurses and midwives per a population of 10,000, far below the WHO’s recommended ratio of 30.5 per 10,000.

These shortages translate directly into unsafe nurse-to-patient ratios on the ground. In Kenya, a single nurse may attend to 30-60 patients per shift in outpatient or general wards.

In maternity units, one midwife may simultaneously manage three to five labouring mothers, far above safe standards of one-to-one care during active labour. These are not exceptional cases; they are daily realities, particularly in rural and under-resourced settings.

The causes are well known yet insufficiently addressed. First is the allure of opportunities abroad. Better pay, safer working conditions, and clearer career pathways continue to attract Kenyan nurses and midwives to high-income countries. While migration is a personal right, its cumulative impact leaves local systems depleted. Referral hospitals have lately experienced waves of resignations as staff leave for overseas employment.

Secondly, burnout is taking a heavy toll. Long working hours, emotional strain, and understaffing are pushing many out of the profession.

Applause cannot compensate for exhaustion. Those who remain feel demotivated, forced to work in survival mode rather than delivering optimal care.

Third, training capacity has not kept pace with demand. Limited faculty, infrastructure, and clinical placement opportunities constrain how many professionals can be trained each year.

Even with the growth in training institutions, output still falls short of national and global needs. Finally, recruitment into the public sector often lags behind reality.

Equity Group Holdings has reported a 23.8 percent growth in profit after tax for the first quarter ended March 2026, riding on cost-cutting, as the listed lender’s asset base crossed the Sh2 trillion mark despite a slowdown in lending.

The lender with operations in Kenya, Rwanda, Uganda, Tanzania, South Sudan and the Democratic Republic of Congo (DRC) reported a profit of Sh18.3 billion, up from Sh14.8 billion.

The profit jump followed a 19 percent drop in interest expenses to Sh10.7 billion from Sh13.3 billion a year earlier, despite a 12 percent expansion in deposit base to Sh1.48 trillion from Sh1.31 trillion.

This followed a faster cut in deposit rate paid to customers than the price charged on loans, resulting in wider interest margins, especially in Kenya. The bank’s net interest margin (difference between its lending and deposit rate) in Kenya expanded to 8.4 percent from 7.4 percent.

The group’s interest income grew by 4.5 percent to Sh43.7 billion from Sh41.8 billion even as its loan book expanded 8.5 percent to Sh873.4 billion.

The growth in loan book has however been slow resulting in the bank holding half its assets base, Sh1 trillion, in cash and near cash instruments.

‘If you add cash and cash equivalent with government securities, it means out of the 2 trillion, Sh1 trillion is available for disbursement. We have Sh150 billion going into cash and cash equivalent demonstrating our readiness and capability to fund growth and to support our customers because of being cash rich,’ said James Mwangi the group’s chief executive.

The bank’s loan to deposit ratio declined to 47 percent from 53 percent signalling slower conversion of liabilities to assets. This is especially so in Kenya where the bank’s liquidity ratio rose to 81 percent, against a statutory requirement of 20 percent, indicating it was holding excess cash.

Despite a cut in interest rates credit uptake in Kenya has been slow to pick up, with private sector lending up 8.1 percent in March, as business and individuals hold for an improved economic environment.

Equity groups operating costs grew by 4.3 percent despite a 34.6 percent jump in staff costs, signalling a tight rein in other operational expenses.

Jump in staff costs follows salary hikes in the second half of last year as the lender sought to align to industry levels following years of lagging behind.

The lender cut provisions held for bad loans by 16.9 percent as its bad debts declined following a write off of Sh27.4 billion in the year ended December 2025.

‘We are cognisant it is best practice to write off loans when they are not performing so that you remain a clean balance sheet -you recognize losses as they occur,’ said Mr Mwangi.

Other operating expenses declined by 9.6 percent which management attributed to increased use of self-service digital banking.

‘Customers are moving away from channels that have variable costs (for example ATMs and agents), like the way they moved away from fixed channels, to self-service and that tells you more about the efficiencies we are likely to move to have when you remove fixed cost and variable cost’ said Mr Mwangi.

The Kenyan unit recorded a 20.8 percent profit growth to Sh10.3 billion to remain the group’s most profitable business.

Tanzania in which the subsidiary injected an additional capital of Sh4 billion last year recorded the fastest profit growth in the first quarter, up 150 percent, to Sh1 billion.

DRC recorded a 32 percent net profit growth to Sh5 billion while Rwanda grew 36 percent to Sh2.5 billion.

Uganda was the only subsidiary to record a profit drop of 20 percent to Sh800 million, following a decline in net interest rate margins to 8.4 percent from 9.2 percent.

The group’s insurance business recorded a 53 percent increase in profit before tax to Sh636 million riding on premium growth.

Taxpayers are facing a Sh390 million payout to an Indian consultancy firm that designed the multi-billion shilling Mwache Dam project at the Coast after the Attorney-General lost a legal battle over unpaid consultancy fees and interest.

The High Court ordered the government to settle a 14-year-old debt owed to Consulting Engineering Services (India) Private Limited for feasibility studies, designs and tender documents prepared for the flagship water project.

The court rejected the government’s attempt to disown the consultancy contract, ruling that signed agreements, project addenda, processed invoices and official correspondence proved the State had fully recognized and implemented the deal.

The award relates to consultancy services for the Mwache Multi-purpose Dam in Kwale County, a Sh20 billion flagship water project meant to ease chronic shortages in Mombasa city and surrounding areas and now targeted for completion in 2027.

The dam, co-financed by the government and World Bank, is expected to supply 186,000 cubic metres of water daily to the Coast region and support irrigation and flood control once completed.

While allowing a claim filed by Consulting Engineering Services (India) Private Limited, the court ordered the government to pay the firm $3,017,908 (Sh389.3 million), together with interest pegged on the London Interbank Offered Rate plus two percent.

The court ruled that the Ministry of Regional Development Authorities had entered into a valid consultancy contract with the firm but failed to honour payments.

Court records show the ministry awarded the consultancy tender to the Indian firm on May 31, 2010, at a contract sum of $4.3 million for feasibility studies, detailed designs and tender documents for the Mwache Dam project.

The contract was later revised upwards through two addenda. The first addendum, signed in 2012, introduced additional irrigation works worth $431,346 while the second, signed in 2013, added services linked to World Bank sponsorship valued at $1.24 million.

The consultant told the court it completed the feasibility report in September 2011 and later submitted final study reports and tender documents in February 2017. It said it raised 19 invoices under the contract but the government only paid eight invoices amounting to half the contract value, with the last payment made in December 2012.

The company accused the ministry of ignoring repeated payment demands despite several written acknowledgments admitting the debt.

In defence, the Attorney-General and the ministry denied the existence of a valid procurement contract and argued that no lawful tendering process had been undertaken.