Category: Business Daily

A final decision on the Diageo-Asahi transaction remains in limbo.

Two critical developments unfolded last week. Appearing before the National Assembly Committee on Finance and National Planning, Competition Authority of Kenya (CAK) CEO David Kimei publicly disclosed for the first time conditions Asahi and Diageo must meet before securing deal approval.

First, the regulator wants the companies to establish a dedicated financial reserve-equivalent to at least four percent of the transaction value-ring-fenced to cover third-party claims, regulatory actions, and historical disputes. Second, the merged entity must allocate 20 percent of its retail refrigerator space to rival products in bars, supermarkets, petrol stations, and hotels rated two stars and above.

A second, more alarming development followed: Parliament openly deviated from its mandate. Rather than sticking to its role of making policy, enacting legislation, and scrutinising regulatory oversight, lawmakers actively attempted to dictate the specific outcome of a case that remains pending before the antitrust authority.

The committee, chaired by Kuria Kimani, pressured Mr Kimei to introduce binding contracts to protect interests of EABL’s existing suppliers such as local sorghum farmers.

The MPs also directed CAK to submit to them documentary evidence of proposed safeguards for farmers and distributors within seven days. In response, Mr Kimei promised MPs that farmer contracts would be honoured and that the merged entity would reserve one-fifth of its retail fridge space for its rivals.

In a functioning competition regime, merger remedies are not negotiated in a committee room of parliament to appease a committee chairperson. They must stem from published market analyses and transparent, evidence-based proceedings where affected parties have a fair opportunity to respond.

A final determination should explicitly identify specific anti-competitive harms and demonstrate how each proposed remedy mitigates them. To date, none of this evidence has been presented to the public.

A regulator that negotiates merger remedies in a parliamentary committee-rather than publishing and defending them on the public record-invites a chilling question now being asked across the business community: are these conditions grounded in competition economics, or are they simply the product of whichever lobby reached the microphone first?

Parliament has every right to summon regulators and demand accountability for how laws are enforced. But it has no business co-authoring remedies for individual corporate transactions.

That is not oversight; it is political interference masquerading as accountability.

The long-term consequences are severe. If every high-profile corporate transaction becomes subject to parliamentary bargaining, international investors cannot rely on consistent, rules-based outcomes. Parliament is fundamentally unequipped to define relevant markets, assess substitution effects, or evaluate countervailing buyer power-the core analytical tools of merger control.

The transaction itself is straightforward: two willing multinationals agreed to an equity transfer. Diageo seeks to exit its controlling stake in EABL and UDV Kenya, while Asahi seeks to acquire it.

No production facilities are closing, no brands are being retired, and no workforce layoffs have been announced. Yet eight months later, the transaction remains trapped in a fog of parliamentary summonses, court injunctions, and regulatory improvisation.

The four percent reserve fund requirement-calculated against a transaction valued at nearly Sh300 billion-is particularly troubling. Who will control this money? Who decides where it is invested, and under what conditions will it be disbursed?

Placing vast sums of capital under discretionary control inevitably creates opportunities for rent-seeking. The public deserves to know the fund’s precise legal basis, its designated administrator, its investment guidelines, its intended beneficiaries, and the exact triggers for its release.

Regulatory remedies especially where the only change happening is in the shareholding register must remain proportionate, evidence-based, and strictly tied to demonstrated anti-competitive risks. I ask: where is the evidence to show that change of ownership from Diageo to Asahi will put existing farmer contracts or distributor agreements are at risk?

While Kenya’s competition regime has made commendable progress, it still lacks transparency in how merger remedies are designed, monitored, and enforced.

The CAK frequently summarises major merger decisions in brief press releases, keeping underlying economic reasoning, market data, and enforcement frameworks hidden from public view.

In a cross-border transaction involving a willing buyer and seller-where operating businesses remain open and the market’s physical structure stays unchanged-the burden of proof rests entirely on the regulator to justify why he is belatedly attaching hyper-specific and deeply invasive conditions such as sharing of refrigerator spaces in this transaction.

Kenya will need to grow its citizens’ average incomes by at least 10 percent every year for the next 35 years to attain the high-income status dream outlined in President William Ruto’s Vision 2060.

This is the verdict of a government-backed team of experts guiding the 30-year plan to transform Kenya into an industrialised economy by focusing on increased farm productivity, expanded export-oriented manufacturing, and deeper technology and innovation.

The 2030-60 plan seeks to position Kenya as a politically stable state with an efficient civil service, respect for the rule of law, macroeconomic stability, and sustainable public debt, according to an outline of the proposal.

The new economic blueprint, for which the President launched public participation on Wednesday, has set a target of $80,000 (Sh10.3 million) for average yearly income for Kenyans, matching the current level in Singapore.

This is up from the current level of about $ 2,000 (Sh258,500), thrusting Kenya into a high-income economy status.

The team of experts, led by former International Monetary Fund (IMF) economist and mission chief for Kenya, Prof Hiroyuki Hino, has revealed that Kenya’s gross national income (GNI) per person will need to grow by up to 40 times between now and 2060 to reach the desired vision.

‘We will need a 10 percent annual per-capita income growth, sustained every year for the next 35 years,’ Prof Hino said at the launch of the national conversation on Vision 2060 on Wednesday.

The 10 percent growth rate has rarely been attained in Kenya’s history, according to World Bank data.

Last year, Kenya’s average GNI, also known as GNI per capita, grew by 6.2 percent from $2,070 to $2,200, adds the multilateral lender.

This was the fastest rate since 2021, when the economy was emerging from the Covid-19 slump.

Since independence, Kenya’s GNI has grown by double digits only 21 times, meaning just once every three years. The fastest growth was recorded in 1996, when GNI per capita grew by 25 percent from $280 to $350.

To sustain the double-digit growth annually, the team of experts says Kenya must prioritise a ‘prudent fiscal strategy, substantial infrastructure and major projects, and a business-friendly regulatory environment’.

In addition to increasing average income, the vision also aims to improve the quality of learning by 27 percent; raise the percentage of the population with access to basic services like water and healthcare from the current 61 percent to 100 percent; and put an end to child malnutrition.

According to Prof Hino, the three non-income targets are attainable by 2063, lifting Kenya to Singapore’s level, but ‘matching Singapore’s income will be the steep climb’.

The experts outlined four priorities that Kenya must do differently to attain the Vision 2060 first-world status goal, beginning with nurturing self-management to raise productivity.

The experts have also urged the State to embrace informal enterprises by letting small businesses ‘grow on their own terms,’ to eradicate corruption, and to correct income inequality.

President William Ruto said inequality is particularly a major challenge for Kenya, and part of the major barriers to improving the lives of its people, with roughly 20 percent of the population accounting for over half of the income in the country.

‘A very serious challenge in our nation is inequality…we cannot progress as a nation when we cannot take care of the vulnerable,’ Ruto said. ‘We have to pay attention.’

Ruto expressed optimism that the goals are attainable, vowing to incorporate Kenyans’ views into the development of the roadmap to Vision 2060, and to implement issues raised by Kenyans.

The 2030-60 plan will succeed the two-decade Vision 2030 initiative.

The State says it will develop a law and an independent oversight body designed to prevent future administrations from abandoning the plan, a pattern that undermined the implementation of the Vision 2030 strategy.

Ruto’s administration has prioritised major infrastructure investment in roads, railways, and ports through a new National Infrastructure Fund, which already holds Sh349 billion from state asset sales. A separate sovereign wealth fund is also planned to safeguard national resources for future generations.

Agriculture is the foundation of millions of Kenyan livelihoods, national food security and rural prosperity. Yet it is also the sector most exposed to climate risk.

Every planting season is increasingly a gamble against drought, floods, pests, diseases and unpredictable weather.

This year, erratic rainfall has devastated harvests. In Nakuru, one maize farmer harvested 120 bags from five acres last season but only 26 bags this year using similar practices on the same land.

In Taita Taveta, crop failure has left tens of thousands facing food insecurity, while in West Pokot, thousands of households require food assistance.

For farming families, crop failure means depleted savings, inability to repay loans, children withdrawn from school and increased dependence on humanitarian assistance. This is why agricultural insurance must become a central pillar of Kenya’s agricultural transformation agenda.

Last year, Kenyans spent Sh2 billion insuring crops and animals, according to the Insurance Regulatory Authority. Although this nearly doubled the previous year’s figure, fewer than one per cent of farmers reportedly insure their crops.

Agricultural insurance is more than compensation after disasters. It gives farmers confidence to invest in improved seed, fertiliser, irrigation and mechanisation, knowing catastrophic weather will not wipe out their investment. It also strengthens the wider agricultural value chain by improving farmers’ access to credit and reducing the burden of emergency relief.

Technology can help expand coverage. Satellite imagery, remote sensing, automated weather stations, artificial intelligence and digital claims assessment can improve accuracy and speed up payouts.

Parametric insurance can trigger automatic payments when rainfall, temperature or vegetation indicators reach agreed thresholds. Kenya’s mobile phone and mobile money infrastructure provides a strong foundation for digital distribution.

Scaling agricultural insurance requires coordinated action by government, counties, insurers, banks, saccos, agribusinesses and development partners. Farmers must also see insurance not as an optional expense but as an investment in resilience.

For a long period of time, businesses have operated within clearly defined industry boundaries. Organisations continue to operate independently within their own sphere of influence, banks providing financial services, school focused on education and telecommunications companies connecting people.

Today’s customers do not experience life through industries but through needs, moments and journeys. A parent paying school fees, or a patient seeking healthcare, does not think in terms of sectors. They simply expect services to work seamlessly together in processing this.

This shift is redefining the role of financial institutions and creating one of the most significant opportunities for economic growth in our generation: the emergence of business ecosystems.

The future of banking will be shaped by how effectively institutions collaborate to solve customer challenges and create integrated experiences. Across East Africa, digital transformation has fundamentally changed customer expectations.

Consumers are now expecting convenience, speed, personalisation, and accessibility as a priority. They are accustomed to digital platforms that simplify complex processes and bring multiple services together in a single experience. They increasingly expect the same level of integration from financial services.

The challenge is that many customers’ needs extend beyond the traditional boundaries of banking. Things like access to quality healthcare require affordable financing solutions. Small businesses require access not only to credit but also to markets, insurance, technology and logistics support to grow.

No single institution can effectively address these needs on its own. To remain relevant institutions will need to recognise this reality and position themselves not simply as service providers, but as ecosystem enablers.

The banking sector is uniquely positioned to play this role. Banks help facilitate transactions for both individuals and businesses, they support investments and enable commerce. This position gives them a unique advantage in connecting customers to broader solutions and opportunities.

However, being at the centre does not mean acting alone. It means having key partnerships with organisations across industries like: healthcare, education, insurance, telecommunications, hospitality, agriculture, and technology to develop more accessible and affordable solutions.

This approach is often described as ecosystem banking, but implications extend far beyond the financial sector.

At its core, ecosystem banking recognises that sustainable growth occurs when institutions work together to address customer needs holistically rather than in isolation. Research consistently shows that economies grow faster when institutions work together to create integrated solutions.

For emerging markets such as Kenya, where financial inclusion and digital adoption continue to advance rapidly, ecosystems offer shared growth.

The value generated extends far beyond the participating organisations. Customers gain better access to services while businesses expand their reach, communities benefit from stronger economic participation, and entire sectors become more competitive.

Looking at some of the world’s most successful organisations, they have demonstrated the power of ecosystem thinking. Companies such as Apple, Amazon and Ping An have shown that long-term competitive advantage increasingly comes not from owning every capability, but from orchestrating networks of partners and creating seamless customer experiences.

Their success underscores an important lesson: value is no longer created by institutions acting in isolation, but by ecosystems working together to solve customer needs.

The objective is to identify meaningful intersections where collaboration can solve real problems, improve outcomes and create measurable value for customers and communities. Perhaps the most important aspect of ecosystem thinking is its potential to drive inclusion. Many continue to face barriers related to affordability, accessibility, information and connectivity.

Coordinated ecosystems can help bridge these gaps more effectively by combining expertise, infrastructure, technology and customer reach. This creates opportunities to extend services to previously underserved populations, support entrepreneurship, strengthen local economies and improve social outcomes.

The future clearly and for sure, belongs to organizations that are willing to move beyond transactional relationships and embrace collaborative value creation.

The United States has reclaimed its spot as Kenya’s top coffee export market, overtaking Belgium as remote working and the need to save money are leading to an increase in coffee consumption in American homes.

Agriculture and Food Authority (AFA) data show that the US purchased 10,844.1 tonnes of Kenyan coffee, worth Sh7.42 billion, during the season, accounting for 21.4 percent of the country’s total coffee export value.

Belgium, previously the leading market, bought 8,332.5 tonnes worth Sh7.62 billion, representing 16.44 percent of the total export value.

The shift comes as a survey from the US National Coffee Association showed 85 percent of the people in the country who said they drank coffee in the past day did it at home, the highest ?amount on that classification since 2012.

The survey also showed that among those declaring they drank coffee out-of-home, most said it was at their offices or in transit (drive-through), with a smaller part saying they walked into a coffee shop.

Hybrid lifestyles, with less commuting, and the economic pressure felt by part of the population are two major factors driving the increase in home consumption of coffee.

US coffee drinkers consume an average of 2.8 cups per day, resulting in more than 500 million cups of coffee served every day in the country.

The shifts coincided with Kenya’s coffee export earnings hitting a record Sh43.89 billion in the year to June 2025, a 9.9 percent increase from Sh39.95 billion the previous year, underlining coffee’s role as a key foreign exchange earner.

The change marks a significant recovery for the US market, which was Kenya’s biggest buyer in the year to June 2023.

Belgium’s market was considerably smaller in 2023, purchasing 5,026 tonnes worth Sh3.91 billion, or 10.48 percent of the total coffee export value.

American buyers favour specialty and premium coffee, giving local exporters access to higher-value global market segments.

US buyers are building more direct links with Kenyan cooperatives and estates, which could reduce dependence on intermediaries in the supply chain.

The rise in US demand comes as Kenyan coffee faces competition from major producers such as Brazil, Colombia, Ethiopia and Honduras.

Kenya’s export growth was driven more by higher prices than by a big jump in output. Export volumes rose just three percent, from 49.2 million kilograms in 2023/24 to 50.68 million kilograms in 2024/25. Yet export earnings climbed nearly 10 percent.

Global coffee markets have seen increased volatility in the past two years, as poor weather hit output in several major producing countries.

The resulting supply shortages have pushed international prices to record highs, benefiting producers amid the fall in export volumes.

? jwaweru@ke.nationmedia.com

Kenya has revived talks with the International Monetary Fund (IMF) for a new support plan that will unlock loans and set up taxpayers to painful conditions.

The Central Bank of Kenya (CBK) on Wednesday said it was expecting an IMF team to visit Nairobi soon for talks, when the two sides will also discuss the country’s request for ?a new support programme that will include a lending component.

Kenya requested a new ?IMF programme after its previous $3.6 billion deal ended in April last year on the back of failure to meet agreed conditions, prompting the Treasury to omit loans from the fund in the national budgets to 2029.

CBK Governor Kamau Thugge said an IMF staff team was expected ‘shortly’ in Nairobi to initiate Article IV consultations-a surveillance tool that allows the fund to monitor the economic and financial policies.

‘We expect an IMF team to visit Nairobi shortly, initiating the Article IV consultation discussions,’ Dr Thugge said on Wednesday.

‘In the context of those consultations, we will have further discussions about our relations going forward and in particular on having a fund-supported programme.’

The World Bank reckons that the benefit of the IMF programme to Kenya goes beyond loans, arguing that policing from the fund and its reforms agenda are critical for the country.

The IMF tends to set the toughest engagement terms of the two multilateral lenders, including reforms on State corporations, spending cuts and increased revenues, signalling new taxes, an aggressive pursuit of tax evaders and cheats and roping in of traders and workers in the informal sector.

The World Bank, on its part, has relatively softer terms, mostly requiring support for socioeconomic outcomes like climate change mitigation, placing competition curbs on firms, and the integration of minority groups like refugees.

The multilateral lender in June said it would play mediator in efforts to close ranks between the IMF and Kenya over the Article IV consultations.

Kenya last year postponed the consultations, which allow the IMF to assess a country’s economic health and evaluate financial risks.

‘At the request of the Kenyan authorities to prioritise discussions on their programme request, the 2025 Article IV consultation was rescheduled for a later date,’ the IMF said in September last year.

A dedicated team of IMF economists visits a member country annually to gather economic data and hold discussions with government and central bank officials.

Following the visit, the staff prepares a comprehensive country report, which triggers conditions attached to soft loans from the fund.

Kenya has lacked IMF support since March 2025, when the fund terminated a standing arrangement, denying the country Sh110 billion ($850 million) in financing. Fresh discussions have been protracted.

‘Delays in reaching a new IMF programme could weaken the credibility of the fiscal framework,’ the World Bank said in a report accompanying its fresh disbursement.

‘The World Bank and IMF continue to work closely to coordinate policy dialogue, analysis, and technical assistance,’ added the multilateral lender in a report that gave the IMF funding hitch prominence.

The push for a new arrangement with the IMF is seen as more important from a reform perspective, where the fund would instill discipline in spending and revenue mobilisation beyond financial support.

Kenya did not include any new funding from the IMF in the budget for the year starting July 1 as it looked to escape tough lending conditions attached to the fund’s support, including higher taxes, job freezes and spending cuts.

This saw Kenya approach fresh IMF talks with caution after the termination of the earlier loan facility due to breached conditions.

The World Bank sees risks to Kenya’s macroeconomic outlook, including a prolonged conflict in the Middle East, which could further raise fuel and fertiliser import costs and dampen diaspora remittances.

The August 2027 General Election is expected to increase political risks and dim fiscal consolidation efforts.

‘Should financing conditions tighten or refinancing costs rise, private sector credit would be crowded out, investor confidence could weaken, and the anticipated recovery in domestic demand could lose momentum,’ the World Bank said.

The IMF had dished out painful conditions in the wake of its surging loans post Covid-19 pandemic, including the need to increase tax revenues, cut budget deficits, and restructure State-owned enterprises.

Kenya has turned more towards the World Bank for budget support in the absence of new IMF funding, where it faces less stringent conditions.

In June, the World Bank approved the disbursement of a Sh97 billion ($750 million) loan to Kenya after the country overcame hurdles that stalled the loan package throughout 2025.

? kmuiruri@ke.nationmedia.com

Eveready has recorded the largest share price loss this year at 26.3 percent to trade at Sh1.01 per share on Wednesday, followed by WPP ScanGroup at 19.2 percent to Sh2.06 and Home Afrika at 17.2 percent to Sh1.11 per share.

In what has been a bumper year, the other 49 actively traded firms have made gains that have yielded a valuation increase of Sh1.03 trillion or 35.1 percent to Sh3.98 trillion for the NSE.

Top gainers in percentage terms include Car and General at 325 percent to Sh217 per share, Britam at 94 percent to Sh17.65 and Africa Mega Agricorp at 76.2 percent to Sh124.75.

The NSE’s top five firms by market capitalisation – Safaricom, Equity Group, KCB, EABL and Co-operative Bank-have gained between 2.9 percent and 56 percent this year, adding Sh517.5 billion in valuation.

This has seen equities beat other asset classes such as government securities, property, cash deposits and unit trusts in returns to investors.

Treasury bonds issued in the last seven months have paid investors annual interest of between 12 percent and 14.2 percent, while Treasury bills buyers have earned between 7.4 percent and 9.2 percent in annualised interest.

Interest rates on fixed deposit accounts in banks fell to 6.84 percent in June 2026 from 7.03 percent in December 2025.

In the property sector, average rental and sales prices in Nairobi and its satellite towns were in the single digits of up to 6.6 percent in the first half of the year on muted demand, while land sale prices grew at up to 5.2 percent, as per data compiled by real estate firm HassConsult.

Read: Dominance of big five NSE stocks cut to 62pc

The nine firms that have shed value have performed as follows:

Eveready East Africa

Eveready leads the market with a price loss of 26.3 percent to Sh1.01 per share, resulting in a Sh75.6 million decline in valuation to Sh212.1 million in the year to date.

Years of losses have left the company with a negative equity position of Sh101 million as at March 2024, the latest available financials show. Earlier this year, the company said it is pivoting from battery distribution to clean energy and electric vehicle financing in a bid to turn around its fortunes.

WPP ScanGroup

Marketing services firm WPP ScanGroup’s share price has fallen 19.2 percent to Sh2.06 this year, cutting its valuation by Sh211.8 million to Sh890.2 million. This decline has come as the firm’s net loss widened to Sh713.67 million in the year to December 2025 from Sh506.74 million in 2024.

The wider loss was largely due to the loss of key client Airtel Africa, which accounted for nearly a fifth of the company’s annual sales.

Home Afrika

The real estate firm has shed 17.2 percent of its value or Sh93.2 million this year to settle at Sh449.83 million, despite making a net profit for the last two years. The stock is, however, coming off a large gain of 262.2 percent in 2025, when it was among the top five gainers in the market.

Umeme

The cross-listed Ugandan power distributor has seen its share price fall by 11.5 percent to Sh6.92, reflecting its lack of revenue after its 20-year concession with the Ugandan government expired in March 2025. Its valuation has thus declined by Sh1.46 billion to Sh11.24 billion since January.

The company is also involved in an arbitration case in London against the Uganda government over terminal payments relating to the concession. Last month, Umeme issued a profit warning, saying that its loss in the half year to June 2026 will be wider than the loss of Sh5.8 billion in June 2025.

Kurwitu Ventures

The investment firm has seen only one price change since its listing nearly 12 years ago, having gone for years without registering a trade at the NSE.

On July 9, the company traded 111 shares, with its price falling by 9.7 percent to Sh1,355 from Sh1,500, marking the first price movement since its first day of listing on November 13, 2015. The company’s valuation has fallen by Sh14.8 million to Sh138.6 million after the price movement.

Nairobi Business Ventures

NBV has recorded a decline of 5.4 percent or Sh108.3 million in investor wealth to Sh1.88 billion this year on the back of challenging business conditions that forced it to halt its trading business last year. In the half-year to September 2025, the company reported a net loss of Sh78.3 million, compared to a loss of Sh99 million a year earlier.

Liberty Kenya Holdings

Similar to Home Afrika, the insurance firm has suffered from a price correction after recording large gains of 81 percent in 2024 and 43 percent in 2025.

Liberty’s valuation has fallen to Sh5.15 billion from Sh5.45 billion in January, after recording a 4.8 percent decline in share price to Sh9.62.

The company is the only one among this year’s losers that is currently paying a dividend, having maintained a distribution of Sh0.50 per share despite a 65 percent decline in net profit to Sh659 million in the year ended December 2025.

Express Kenya

Express Kenya’s net loss widened to Sh125 million in the year ended December 2025 from Sh108 million a year earlier. Its share price has fallen 4.1 percent to Sh7.10 in the year-to-date, cutting its valuation by Sh14 million to Sh338.8 million.

The firm is eyeing property developments and a sale of three acres in Nairobi valued at about Sh300 million to strengthen its financial position.

Olympia Capital Holdings

Valuation has fallen from Sh328.8 million to Sh320 million this year, following a 2.7 percent decline in share price to Sh8 per unit this year.

The stock was also coming from a large gain of 156 percent in market capitalisation in 2025, when prices on small cap stocks were boosted by demand from speculating local retail investors.

Lower revenue of Sh428.75 million in the year ended February 2026-from Sh457 million a year earlier- cut its net profit to Sh10.4 million in the period from Sh17.6 million.

At least five startup founders who spoke to Business Daily said they are considering registration in South Africa or Mauritius, which they say have more accommodating regulatory regimes for early-stage businesses, if they fail to raise the required capital by the November 4 deadline.

‘It could be possible to raise the funds, but it’s very difficult. The process of raising funds is complex and takes time, so for many local builders, November is not a deadline; it’s an expiry date,’ said Eric Michubu, founder of Taran App, which enables crypto users to exchange stablecoins and other virtual assets for local currencies in East Africa.

Mr Michubu said his startup had applied for licensing as soon as the VASP Bill was signed into law last year, but the publication of the regulations means it is no longer eligible to obtain an operating licence in Kenya unless it can meet the new capital threshold, despite already having several users in the country.

Under the VASP regulations, Taran would need a minimum paid-up capital of Sh100 million to obtain a Virtual Asset Exchange licence, an amount Mr Michubu says the startup does not have.

Paid-up capital is money that shareholders have actually contributed to a company in exchange for shares. Startups that cannot meet the requirement from their own resources can raise the funds from venture capitalists or private equity investors, usually in exchange for a stake in the company.

Other startups covered by the regulations face similarly steep capital requirements. Stablecoin issuers will need a minimum capital of Sh300 million, crypto wallet providers Sh150 million, payment processors Sh10 million, and crypto asset managers Sh20 million.

The capital requirements are intended to ensure that licensed virtual asset service providers have sufficient financial capacity to operate, protect customers and absorb losses. However, startups argue that applying relatively high fixed thresholds across the sector risks shutting out early-stage firms that have yet to attract significant investor funding or clientele.

They also argue that investors typically are more comfortable in firms that already have a license to operate than those still seeking it.

The potential loss of these startups comes as Kenya’s crypto market is growing. Currently, Kenya is ranked 21st globally in the global crypto adoption index by American blockchain research firm Chainalysis, up from 28th in 2024. In Africa, Kenya is fourth after Nigeria, Ethiopia and South Africa.

South Africa’s regulatory regime for crypto assets, unlike Kenya’s, does not prescribe a specific fixed capital requirement for virtual asset service providers. Instead, applicants are assessed on whether they have adequate financial resources for the nature and scale of their operations.

Mauritius also has minimum capital requirements for some virtual asset activities, but its thresholds are significantly lower than Kenya’s. An exchange in Mauritius, for instance, would require roughly Sh18 million in minimum capital, while a broker would need about Sh5.5 million and a virtual asset custodian about Sh14 million.

Several categories under the Mauritian framework, including wallet providers, issuers and advisory service providers, do not have a fixed minimum capital requirement. Instead, firms are required to demonstrate sufficient working capital, giving smaller businesses greater room to enter the market.

In Kenya, on the other hand, even payment service providers need to have a significant paid-up capital to get a licence. Tando, a startup that enables Kenyans to pay using Bitcoin into M-Pesa personal and merchant accounts, says it may also struggle to meet the Sh10 million threshold set for crypto payment service providers.

Jason, Tando’s founder and chief executive, said other than the steep thresholds, it is particularly problematic that the paid-up capital requirement is denominated in fiat currency for businesses that earn much of their income in Bitcoin and other cryptocurrencies.

‘What they should be doing is pricing fees and capital requirements not in shillings, not in euros, not in dollars, but in bitcoin,’ he told the Business Daily.

‘It makes no sense strategically to put any hurdles or roadblocks in the way, financially or otherwise…Kenya is in a global competition. We should be trying to win, and we’re currently losing, and that’s sad. We have the talent and the tools; now we just need a clear track without blockades.’

The Kenyan crypto industry opposed the capital requirements at the proposal stage during the public participation process, arguing that the thresholds could lock out smaller firms.

In its submissions to Treasury, the Virtual Assets Chamber of Commerce (VACC) proposed a tiered capital requirement for licensing based on the scale of operations and age of companies, similar to the system used for commercial banks.

The final regulations reduced some of the initially proposed capital requirements by up to 40 percent, following consultations with industry players. Startups, however, say the reduced thresholds are still too high for many of them.

‘It’s not that the regulators were completely deaf to the proposals and outcry from the community,’ said Tony Olendo, chairperson of VACC.

‘It’s a really delicate balance they were dealing with. On one hand, you don’t want to put the requirements too low and end up cannibalizing the ecosystem, but you also don’t want to put it too high and squeeze out innovators.’

Mr Olendo, who also owns a crypto startup and is racing against time to raise capital to obtain a licence, however, argues that the high capital requirement should not restrict innovation in the crypto industry, as there are still several areas, such as crypto betting, that remain largely unrestricted.

The National Treasury did not respond to questions on how startups that fail to raise the required capital will be treated, whether exemptions will be issued, or whether it is considering accepting Bitcoin or other cryptocurrency-denominated capital.

The International Monetary Fund has previously pointed to Mauritius’ virtual asset regulatory framework in its recommendations on crypto regulation for Kenya, citing the need to balance regulatory oversight with the promotion of innovation.

For Kenyan startups such as Taran, Qadi and Tando, however, that balance is now becoming a race against time. Unable to raise the capital required under Kenya’s new framework, they are considering markets such as Mauritius and South Africa in an attempt to secure legal recognition and continue operating after the Kenyan regulations take effect.

Advocates and certified secretaries will lose their licenses for fraudulent filings at the Business Registration Service (BRS) under a proposed code of conduct.

The move also aims to allow lawyers and governance compliance experts to make such submissions without seeking consent from company directors.

Following a consultative meeting with the Institute of Certified Secretaries (ICS) and the Law Society of Kenya (LSK), BRS agreed to jointly develop a conduct and implementation structure that would restore direct filing by professionals without directors’ consent.

The direct channel was suspended under an updated BRS system, known as BRS II, after fraudulent filings saw shareholders lose stakes worth billions of shillings in companies without their knowledge.

Under the initial version of the filling system, known as BRS I, advocates and certified secretaries could lodge and process applications without seeking consent from directors.

But this changed under the new automated system, through which individual company directors receive a one-time password (OTP) on their mobile phones for verification.

‘The meeting further discussed and resolved to…jointly develop and implement, within August 2026, a Code of Conduct and an implementation framework to guide the reinstatement of a structured Green Channel on the BRS Version II platform for qualified and in good standing practitioners,’ said BRS Director-General Kenneth Gathuma.

‘The framework will define clear roles, responsibilities, and accountability measures for all parties,’ added Mr Gathuma. Advocates and secretaries act on behalf of company directors in making several filings, including transfers of shares and changes in directorships.

Under the old system, BRS version I, they used to lodge directly without the consent of directors, on the faith that as certified professionals, they were expected to do the right thing.

However, there have been complaints of fraudulent filings across the country and in companies affected by fraud, including cases where directors were replaced without their knowledge or consent, in a clear case of identity theft.

Shareholders have also learnt of their shares being transferred to other parties without their authorisation.

The increased cases of fraudulent submissions prompted the State to end direct filing, including by advocates and secretaries, requiring them to first obtain consent from directors, a requirement that has prolonged the delivery of post-registration services.

Under the changes being made, instead of each director giving separate consent, the same will be done by the advocate or secretary.

However, other citizens will still have to obtain consent from directors to make the changes at BRS.

BRS version II has an automated system in which directors being replaced will, for example, receive a one-time password (OTP) on their mobile phones for verification-a shift from the earlier arrangement where notifications were sent by email or individuals were required to physically visit BRS offices.

‘The enhanced process will automate the end-to-end confirmation of new director appointments, as well as the resignation of directors and transfer of shares, through multi-factor authentication using a one-time password,’ said BRS Director-General Kenneth Gathuma.

BRS said this new component (OTP) was critical in safeguarding investments by the public in the form of shares and curbing incidents of identity theft and fraudulent lodgements.

Besides company registration, BRS’s day-to-day mandate extends to post-registration services, including facilitating the appointment of new directors or the removal or replacement of existing ones, as well as updating company secretary details.

The State agency also records changes in share ownership, including the sale, transfer or issuance of new shares, and updates registers to reflect the ultimate beneficial owners.

Officials at the BRS noted that the automation will significantly reduce the turnaround time for post-registration services, with the time it takes to effect directorship changes expected to fall from approximately 14 working days to five working days.

Some weeks ago, I watched a problem die inside a bank. It was a critical issue, and solving it would have cost the bank almost nothing. No millions.

Instead, it moved from desk to desk collecting refusals, each one perfectly defensible. A phone call was then made to the chief executive, the kind of call that spends years of banked social capital, and the matter was resolved in a day. Everybody won.

Which leaves the question this column exists to ask: why could nobody inside the system see it, and why could nobody act?

Once you notice this pattern, you meet it everywhere. I have sat in a tax dispute that swelled through objections, judgments and costs for five years, until alternative dispute resolution finally placed the problem on the table.

What process could not untangle in five years, ADR resolved in eight weeks because someone applied a founder’s view. The same script runs through hospitals, where decisions climb from the ward floor to the chief executive’s desk, sometimes too late for the patient. Institutions full of intelligent people keep producing unintelligent outcomes.

Call it the orphaned institution. Every organisation was once a startup. Someone once held the whole of it in one mind: customer, cost, risk, purpose and trade-offs.

Then it grew and was orphaned of its founder’s reasoning. The people remained capable; judgment stopped circulating. The structural proof is simple: put your team on the other side of the counter and they will instantly see the better decision. The eyes work; the seat forbids.

Why? Because institutions convert judgment into procedure, and procedure cannot see. An employee is rarely punished for a blocked solution but always exposed by an unauthorised one, so the rational clerk optimises for defensibility rather than outcomes. Founder reasoning is the opposite wiring: whole-problem sight, ownership of the result, and permission to weigh trade-offs. Remove any of the three and judgment dies quietly at the desk.

This is why founders struggle to let go. We are lectured about delegation. But the founder who grips too long is often not an ego case but a judgment-scarcity case: he has tested the structure and learned that his reasoning does not survive his absence. Last week, I argued that a creed carries values beyond the founder. This week’s harder question is what carries thinking.

The world is wrestling with the same question. Silicon Valley calls it founder mode. Critics call Elon Musk a micromanager, and sometimes he is.

But underneath the insult sits the unresolved problem: nobody has scaled founder judgment without the founder. Haier in China went furthest, dissolving itself into micro-enterprises so every employee faces the market like a founder. Yet orphanhood persists in the largest banks, telcos and ministries. Perhaps scale itself thins the blood.

Widen the lens and the pattern turns civilisational. Africa itself can read as an orphaned institution.

Our forefathers ran sophisticated leadership pipelines: age-sets that formed judgment in cohorts, councils of elders that transmitted it deliberately, and succession earned through initiation.

Colonialism severed the pipeline, and independence handed us the coloniser’s institutions, stripped of our own founding logic. So the continent keeps returning to the house that orphaned it, expecting it to supply the judgment we once formed at home.

Then comes this era’s provocation. If the founder’s reasoning cannot be transmitted through training manuals, could it be transmitted through machines? It is now possible to build a founder’s digital twin: an AI trained on the founder’s decisions and corrections, answering: what would the founder do here, and why?

I find the idea promising, and I do not trust it. A twin can carry logic. It cannot carry liability. My reasoning worked because I bore the consequence of being wrong.

Judgment without ownership is a suggestion box with better grammar. So the answer is probably a stack: the creed to carry the values, the twin to circulate the reasoning, and shared ownership to give the person at the desk a reason to use both.

Intelligence spreads fast. Skin in the game must still be distributed the old way.

Until then, the test of every institution remains embarrassingly simple. It is the day the clerk solves the founder-sized problem without anyone needing the chief executive’s number. It becomes an heir. So, one day, might a continent.