Category: Business Daily

In the din of the controversy over the government’s decision to divest part of its stake in Safaricom, fundamental questions have been oddly muted: How exactly will the proceeds be spent, and who will authorise that spending?

Is the proposed infrastructure fund the product of a coherent, long-term national investment strategy, or is it simply being improvised to warehouse cash from the Safaricom transaction and the planned privatisation of the Kenya Pipeline Company? Where, in fact, did this idea originate?

Recently, in search of clarity, I reached out to a contact at the National Treasury for an off-the-record conversation. He declined-only to later send me by email a document titled By Generations, For Generations: 50 Years of Temasek.

Temasek Holdings, Singapore’s sovereign investment holding company, is widely credited as one of the institutional innovations behind the country’s dramatic economic rise.

When you zoom out-when you listen to President William Ruto’s recent public statements about creating a sovereign wealth fund, when you review proposals for an infrastructure fund, and when you digest the drastic structural changes introduced by the newly enacted Government Owned Enterprises (GOE) Act-the conclusion becomes difficult to escape: the current push to divest from large, profitable State enterprises and channel the proceeds into an infrastructure fund mirrors, almost point-for-point, the logic that led Singapore to create Temasek Holdings.

It is the same logic behind President Donald Trump’s 2024 statement that he would use revenue from tariffs to create a sovereign wealth fund for roads, airports, and defence technologies. Around the world, governments confronted with fiscal pressure increasingly view sovereign funds and state-holding companies as tools for development.

But the clearest signal that Kenya is trying to imitate the Temasek model came when the President assented to the GOE Act, 2025. What is the significance of this legislation in the changes unfolding before us?

The centrepiece of the new law is simple but transformative: it repeals the Acts of Parliament that created most of our commercial parastatals. We once had the KPA Act, the KenGen Act, the Ketraco Act, and many more. All of them now stand repealed.

In policy jargon, this is ‘corporatisation’-the deliberate conversion of state-owned enterprises from statutory bodies created by specific Acts of Parliament into companies incorporated strictly under the Companies Act.

The government remains the owner, but only through shares, not statute. In this new structure, the State exercises influence through boards, not through ministers.

The implication is profound: corporatisation quietly unlocks large-scale asset monetisation without Parliament having to vote on each sale. It becomes the legal on-ramp for fast-tracking privatisation.

The pathway to selling equity becomes automatic and administratively streamlined.

If this is the road Kenya has chosen, then the country deserves an open, candid debate-not the shallow shouting match that currently dominates the airwaves. Temasek’s experience offers both inspiration and caution.

Temasek did the hard work first. Singapore stripped ministries of all direct control over commercial enterprises. Ownership was consolidated into a single shareholder: the State acting strictly as an investor, not a political operator. Performance-measured ruthlessly-became the organising principle.

As Kenya enters the public participation period on the Safaricom divestiture and infrastructure fund proposal, we must elevate the quality of debate. The key question is not whether divestiture is good or bad. It is: What exactly is this infrastructure fund?

Is it being set up as a serious, independently managed national investment institution? Or is it merely a temporary parking bay for windfall proceeds from one-off asset sales?

We must revisit the intellectual and legal origins of Kenya’s Sovereign Wealth Fund (SWF) idea. The first Sovereign Wealth Fund Bill of 2014, drafted by the Presidential Taskforce on Parastatal Reforms, adhered closely to global best practice.

It conceived a sovereign investment institution owned by the people of Kenya, aligned with the Santiago Principles developed under the IMF. It was to be insulated from day-to-day politics, professionally governed, and accountable.

What came later was a steady dilution. Successive National Treasury teams reframed the SWF as little more than a specialised Treasury bank account at the Central Bank-established under the PFM Act and capable of being dissolved at the stroke of a Cabinet Secretary’s pen.

Which brings us back to the most consequential question of all: Who will decide how the infrastructure fund is spent? The Cabinet? Parliament? Or a professional investment board insulated from politics? Without airtight governance rules, such a fund risks becoming a large and efficient political slush fund-only this time financed by the family silver.

Kenya stands today at the same fork in the road that confronted Singapore decades ago. Do we want a serious national investment holding model built for generations? Or a convenient cashbox for whichever administration happens to be at the National Treasury.

Although over 60 companies are listed on the Nairobi Securities Exchange (NSE), most investors struggle to track the companies’ earnings calendars and key activities. This challenge stems from persistent underinvestment in Investor Relations (IR), which is often viewed as a minor, reactive function within Finance.

Consequently, market activity is concentrated in a few blue-chip stocks, such as Safaricom and banks like Equity, which account for over 70 percent of daily trade turnover, leaving many other listed firms invisible, illiquid, and unable to attract the global capital needed for NSE’s strategic growth.

A stock that trades only once a week isn’t ‘fundamentally weak,’ it is simply invisible. A market with dozens of invisible companies isn’t ‘small,’ it is underdeveloped, and cannot attract global capital.

This lack of professional transparency has led to tangible consequences. The market is currently experiencing a historic withdrawal of international capital, with foreign participation in equity turnover averaging just 30.12 percent in Q3 of this year, a 15-year low. This retreat resulted in a net portfolio outflow of Sh 3.84 billion for the quarter.

Foreign investors are not leaving Kenya because companies are fundamentally flawed. They are reallocating due to inadequate communication.

When investors cannot reliably know ‘when earnings will be released, whether guidance is coming, how management interprets quarterly performance,’ they do not invest. They wait, and prolonged uncertainty leads them to exit the market.

Also, retail investors are projected to increase with NSE targeting 9 million participants by 2029 through the introduction of fractional share purchases. If listed companies do not provide effective IR, they create information asymmetry, discouraging this growing retail base from sustained, informed participation.

Addressing the lack of mandated professional investor communication structures is no longer optional. A world-class market cannot be built on silence and spreadsheets alone.

However, recognition without action is insufficient. IR is a strategic communication tool that creates value through transparency. It bridges management’s vision and market confidence, and serves as an investment that improves valuation, attracts capital, and drives liquidity.

The solution is for listed companies to urgently elevate the IR function from a compliance checklist item to a strategic, board-level priority. To beat this crisis, listed companies must take specific, non-negotiable actions.

First, they must announce and strictly adhere to an annual IR calendar, clearly outlining the dates for earnings releases, dividend declarations, and Annual General Meetings at the start of every fiscal year.

They should also appoint and empower a single, named point of contact for investors on the company website, with dedicated phone and email channels, replacing the current fragmented approach.

Third, listed companies must exceed minimum legal disclosure by adopting Integrated Reporting and ESG (Environmental, Social, and Governance) disclosure guidelines. This approach communicates the company’s holistic value creation strategy to socially conscious investors, both global and local.

Fourth, the Capital Markets Authority(CMA) should mandate annual Board review of the IR strategy and link senior management compensation (CEOs/CFOs) directly to performance on key IR metrics, such as investor satisfaction scores and stock liquidity. This ensures IR is treated as a profit driver rather than a compliance cost.

For the Kenyan retail investor, always demand transparency.

Use your vote at Annual General Meetings (AGMs) to challenge boards on their lack of professional IR, disclosure standards, and the allocation of resources to this critical function. Stop accepting the bare minimum. Only by holding boards accountable for their silence will the market’s basement issues be truly fixed.

The Central Bank of Kenya (CBK) has cut its inflation outlook further for the next 12 months as it sees continued stability in consumer prices and the exchange rate.

The apex bank said on Wednesday that it expects the cost of living to fall steadily to reach lows of 3.7 percent in June 2026, having previously forecast inflation to fall to 4.3 percent in the same month.

Safaricom has borrowed $138 million (Sh17.8 billion) from Standard Bank to fund the expansion of its subsidiary in Ethiopia.

Africa’s largest bank by assets, operating in Kenya as Stanbic, is the sole arranger and lender of the loan. Safaricom will invest the capital towards expanding digital infrastructure and services in Ethiopia.

Primary health facilities in Kenya waited an average of 24 days to receive essential medicines and medical supplies in the year ended June 2025, forcing patients to either buy drugs from private pharmacies at a higher cost or go without treatment.

Supply delivery time or lead time is the total duration from placing an order with a supplier to actually receiving the goods or services, encompassing order processing, production, shipping, and final delivery.

Essential medicines are those that satisfy the priority healthcare needs of the population.

Latest data shows that the order turnaround time-the number of days between when a facility submits an order and when supplies actually reach the facility, more than doubled the official 10-day target increasing by 14.2 days in the financial year 2024/2025.

This represented about a 43.2 percent increase from the 16.9 days recorded three years earlier.

This worsened to 20.1 days in 2023/24, representing a 10-day delay, before reaching 24.2 days in the year ended June 2025.

The 14.2-day delay represented a 142 percent deviation from the target, signaling systemic problems rather than isolated operational challenges.

‘Targets were not met due to low on-time order integration, especially for program orders that led to long order processing,’ said the State Department for Medical in its sector report.

Consequently, the product availability, measured by the fill rate-the percentage of ordered items that Kenya Medical Supplies Authority (Kemsa) actually has in stock and can supply when facilities place orders, fell below the planned targets.

The performance data shows that only 55 percent of ordered items were supplied to facilities, far below the 90 percent national benchmark.

From 66 percent in 2022/23, already 24 percentage points below target, performance dropped to 62 percent in 2023/24 and jumped to just 55 percent in the next financial year.

This represented an 11-percentage-point decline over three years, with performance at barely half the benchmark that health planners considered essential for functional service delivery.

‘Though the order fulfillment rate for Kemsa Capital essential commodities has been decreasing, this can be attributed to low stock availability occasioned by long supplier payment times, due to strained cash flow/lack of adequate capitalisation,’ read the report.

It also said the low tracer commodity availability to the county was due to underfunding and debts owed to Kemsa by county governments, highlighting systemic financial management problems at the devolved level.

According to the State Department for Medical Services, pending bills owed to Kemsa by the Ministry stand at about Sh1.9billion.

As a result, the availability of essential medicines at the facilities stood at a low of 40.3 percent, meaning that fewer than half of essential medicines were available at health facilities when patients sought care, despite the billions spent on procurement and distribution.

Over the three years, the Authority successfully procured Health Products and Technologies worth Sh113.28 billion and delivered commodities totaling Sh115.11 billion across the country.

These supplies reached an average of 11,540 healthcare facilities and testing sites spread across all 47 counties, ensuring national coverage.

It’s 6:30am and I’m standing on a stretch of road where, on an ordinary morning, more than 400,000 cars rip through fourteen lanes of traffic.

Today, instead of engines roaring, a DJ deck blares music so loud the bass seems to vibrate through the asphalt.

The government is planning to hand over the modernisation of the country’s driving licence system to a private investor after years of underperformance by the National Transport and Safety Authority (NTSA).

This is after the NTSA missed the target for issuance of chip-based driving licences (DLs) for the second time in three years, blaming the underperformance on motorists’ growing preference for electronic (system-generated certifications) driving licences.

The cost of constructing houses has shot up by up to 16 percent in just 10 months, dealing a major blow to the homeownership dream of many Kenyans who are also keeping away by high mortgage terms.

A fresh update by the Architectural Association of Kenya (AAK) shows that the price of putting up homes, including bungalows, maisonettes, and luxury apartments, has climbed sharply in the 10 months to October.

The unit cost of a bungalow and maisonette grew by about 12 percent, driven by high fuel costs and inflation, piling fresh pressure on Kenya’s housing market. Putting up a bungalow now costs Sh54,730 per square metre while the cost for a maisonette is Sh59,868 per square metre.

‘The cost of constructing a standard bungalow increased from Sh48,750 per square meter in 2024, representing a 12.27 percent rise. Middle-class maisonettes recorded a more moderate increase of 11.28 percent, moving from Sh53,800 to Sh59,868 per square meter,’ said AAK.

Construction costs across all major residential building categories continued to rise between 2024 and 2025, the association has said, at a time when only a tiny fraction of households can qualify for costly mortgages.

‘Higher-end units registered sharper escalations, with luxurious maisonettes rising by 16.35 percent from Sh84,000 to Sh97,730 per square meter,’ said AAK.

‘Standard low-rise apartments experienced a 13.9 percent increase, from Sh60,435 to Sh68,837 per square meter, while luxurious apartment blocks saw their construction costs climb by 15.53 percent, from Sh77,910 to Sh90,013 per square meter,’ the lobby added.

The higher cost reflects pressure on prices of construction material such as sand for a better part of 2025.

For example, data by the Kenya National Bureau of Statistics (KNBS) shows that the cost of construction input rose at the fastest pace in nearly two years during the third quarter of 2025, lifted by higher prices of steel, electrical fittings, sand, and bitumen, signaling budget pressure on construction projects.

The Construction Input Price Index (CIPI) increased by 1.27 percent between July and September this year, marking the quickest quarterly rise since December 2023.

The index stood at 121.27 points, up from 119.75 in the previous quarter and 120.38 in the same period last year.

The CIPI measures the price changes in the inputs used in construction, such as materials, labour, and equipment. The index helps to track overall construction costs.

The increase in CIPI, between July and September, was driven mainly by steel and reinforced bars, whose prices rose by 5.2 percent, while electrical fittings increased by 5.1 percent.

Prices of bitumen macadam and sand rose by 4.7 percent and 3.6 percent, respectively.

The cost of cement and timber, however, eased by 1.39 percent and 2.71 percent, respectively, helping to marginally moderate the overall rise in input costs.

KNBS data also showed that the Building Cost Index, which measures changes in material prices for structural works, rose by 1.48 percent to 121.29 points, while the Civil Engineering Cost Index climbed to 121.79, reflecting higher prices of bitumen and petroleum products.

This marked the sharpest quarterly movement in 21 months, reversing a period of relative price stability that had held since early 2024.

The last comparable increase was in December 2023, when construction input prices rose by 1.66 percent. AAK warns that the rising cost of materials, labour, and transport is not only inflating project budgets but also widening the gap between households and affordable home ownership.

With developers passing increased costs onto buyers, market prices for newly built homes continue to climb at a pace outstripping wage growth and household savings.

This trend is locking many first-time buyers out of the market and deepening reliance on rental housing, especially in urban centres where demand remains high.

“These increases reflect higher material costs, labor adjustments, and the general inflationary environment within Kenya’s construction sector. The trend demonstrates that residential development costs continue to rise, even with relative stability in the exchange rate,’ added AAK.

Domestic carrier Safarilink Aviation is expanding its regional footprint with the launch of a new Nairobi-Entebbe service via Kisumu, set to take off on Monday.

The move by the airline comes amid evolving tourist patterns across East Africa and the growing demand for seamless safari-to-safari and safari-to-coast travel connections.

KCB Kenya has received Sh19.5 billion ($150 million) financing from the African Development Bank Group (AfDB), allowing it to expand its lending, especially to women-led entities and green businesses.

The country’s largest lender, by asset base, said Sh12.9 billion of the funds will be subordinated debt. Subordinated debt is classified as tier two capital and contributes to a bank’s total capital position that determines the amount of lending a bank can do.