Category: Business Daily

The Kenya Union of Savings and Credit Co-operatives (Kuscco) has issued compensation of Sh152.4 million to saccos after offloading non-core assets and stepping up loan recoveries, marking the latest phase of its effort to refund co-operatives facing a major loss in the financial heist.

The umbrella body of saccos says the amount builds up on Sh216.9 million paid out last year and brings the total compensation to the affected saccos to Sh369.3 million.

Saccos had invested billions of shillings in Kuscco, but a forensic audit made public early in the year revealed the entity suffered a Sh13.3 billion heist under the watch of former officials who have since been charged in court.

Kuscco targets to recover at least 70 percent of the Sh8.8 billion principal amount that Saccos had invested in the umbrella entity within the next three years and has, for the start, relied on the sale of non-core assets, auctions, and loan recoveries to process the refunds.

The latest payout includes Sh112 million as fixed deposit compensation, which has seen 116 saccos receive between Sh9.23 million and Sh1,680 depending on how much they had invested.

In addition, Sh35.4 million has been paid out to individuals who had invested money in the Kuscco Housing Fund for the purchase of houses. A further Sh5 million has been distributed to those who had saved money under the Front Office Savings Activity account called Kusasa.

‘We are releasing this money after the PricewaterhouseCoopers verified that indeed these are genuine claims. You will see us sustain, if not step up these payments, as we move forward,’ said Arnold Munene, managing director at Kuscco, in an interview.

‘The payment demonstrates that our initiatives to dispose of non-core assets, auction houses of defaulters, and implement cost-cutting measures at Kuscco are for the good of the sector.’

The top five recipients from the latest distribution are Hazina (Sh9.23 million), Njiwa (Sh9.23 million), UN Sacco (Sh7.58 million), IG Sacco (Sh7.56 million), Ndege Chai (Sh5.35 million), and Mhasibu Sacco (Sh4.39 million).

Kuscco sold over 32 vehicles, reduced the number of branches to five from 17, and trimmed the staff size to 79 from 250. Mr Munene said these initiatives have helped generate money and also cut operating costs.

Kuscco and Sacco industry officials are in Mombasa for the Kuscco Annual Leaders’ Summit. The launch of the summit was by Cooperatives and Micro, Small and Medium-sized enterprises cabinet secretary Wycliffe Oparanya, who said the target is to have saccos receive all their investment back.

‘This fiscal distribution is part of the journey to ensure that saccos receive their principal investment held at Kuscco. This refund, calculated on a prorated basis, inaugurates a renewed covenant of transparency for the entire cooperative movement,’ said Mr Oparanya.

‘The funds were derived from the sale of non-core Kuscco assets and the resolute pursuit of recovery against loan defaulters who ignored legal processes. This refund demonstrates that integrity is our non-negotiable, immutable foundation.’

Last year, Kuscco paid out Sh216.9 million -mostly to small saccos. Out of this amount, Sh132.2 million was towards partial settlement of fixed deposit savings, while Sh84.7 million went to repaying investments in the Kuscco Housing Fund (KHF).

Kuscco is betting on several initiatives, including the sale of a 60 percent stake in Kuscco Mutual Assurance -the insurance subsidiary- to recover more money.

Other initiatives include the auction of houses and land held by defaulters of mortgages issued under the KHF and the recovery of loans from saccos who had defaulted on payment.

Continued recovery will see the payout hit about 70 percent in three years and rise to the entire saccos’ principal investment in the Kuscco by the fifth year, according to an earlier plan shared by the entity.

Kuscco is currently auctioning houses and parcels of land valued at about Sh1.7 billion in the hands of 684 individuals who have defaulted on loans issued through its housing fund.

The Kuscco heist prompted the intervention of the government to avoid the collapse of the country’s co-operative movement that holds over Sh1 trillion deposits.

Mr Oparanya said his ministry extended the term of the interim board of Kuscco for a term of two years to give them ample time to develop and implement a recovery strategy, reconstruct the books of accounts, oversee statutory and forensic audits, and amend the union’s bylaws.

He has been pushing for the merger of small co-operatives in order to strengthen their operations and also ensure closer supervision to avoid governance lapses.

Vodacom Group expects the advance dividend it gave the government as part of the Safaricom share sale transaction to be repaid within two or three years, signalling expectations that the telco will increase the size of its cash distribution to shareholders in the short term.

In a conference call with analysts, the South African firm said that it considered expected dividend flows over three years in order to arrive at the size of the facility to lend to the government, while also factoring in a return of about 16.5 percent.

The accelerated dividend of Sh40.2 billion is part of the deal in which the multinational is also buying a 15 percent stake in Safaricom from the Treasury for Sh204.3 billion or Sh34 per share through a Kenyan investment vehicle known as Vodafone Kenya. Vodacom will then get rights to Sh55.7 billion worth of future Safaricom dividends that will accrue on the government’s remaining shareholding of 20 percent, giving it a discount of Sh15.5 billion.

‘We took a percentage of expected dividends over a three-year period, and then we discounted it at an internal rate of return (IRR) of 16.5 percent. The way it works is if those dividends are more than the percentage, and it will pay down the facility quicker, in which case the IRR will go up,’ said Shaun Biljon, the group financial controller at Vodacom.

‘However, we’re capped at 18 percent IRR. So, we actually fully expect it to be paid down in just over two years.’

IRR is a discount rate that allows a company to calculate the present value of future cash flows, effectively allowing a firm to estimate the annualised return that an investment is expected to generate over a set period.

Therefore, from Vodacom’s point of view, it is effectively lending the dividend facility at a rate of 16.5 percent per annum.

In the year ended March 2025, the Treasury banked full-year dividends worth Sh16.83 billion from its 14.02 billion shares in Safaricom, which paid shareholders Sh1.20 per share for the period. The payout was split between an interim dividend of Sh0.55 per share and a final dividend of Sh0.65 per share. If the telco were to maintain the same dividend rate going forward, the Treasury would be in line to earn Sh9.6 billion annually from its reduced stake of 8.01 billion shares, meaning that it would take about six years to offset the dividend rights sold to Vodacom.

However, a higher payout per share would allow Vodacom to recoup its lending to the government much sooner.

Vodacom disclosed that the dividend payout is being financed through a loan facility from a local bank.

For the share purchase transaction, Vodacom is utilising a credit facility from Vodafone Luxembourg.

This will fund both the government share deal and the concurrent purchase of a five percent stake in Safaricom that is held by its parent firm, Vodafone Group, at the same price of Sh34 per share.

Once the twin transactions are concluded, Vodacom will raise its ownership in Safaricom to 55 percent, giving it control after spending a total of Sh272.4 billion on the share purchases. The Vodafone stake will cost it Sh68.1 billion.

Speaking on Friday, Treasury Cabinet Secretary John Mbadi defended the cost of the dividend overdraft, saying that Kenya factored in the value of an upfront payment that is based on a future cash flow that is not guaranteed to materialise.

‘That figure (Sh15.5 billion) is based on the assumption that the current profitability will be maintained. It may or may not; the markets are dynamic; the dividend is not guaranteed,’ said the CS in an interview with the Business Daily.

‘But we have gotten money in advance, which will be recouped. I think it has been properly valued.’

Safaricom has been one of the most consistent dividend-paying companies on the Nairobi Securities Exchange (NSE) over the years.

Last month, Safaricom disclosed that it will maintain its policy of paying out 80 percent of its net profit as dividends, despite dipping into the debt market with a Sh40 billion green bond programme.

For the current financial year, Safaricom announced that its net profit for the six months to September 2025 rose by 52.1 percent to Sh42.7 billion, helped by a smaller loss in Ethiopia and M-Pesa’s double-digit growth. The company usually announces its interim dividend within the first quarter of a calendar year.

On December 1, Kenya’s banking sector shifted to a new interest rate pricing regime. Banks have since issued public notices through the newspapers, emails, SMSs and posts in their websites, notifying their customers and the general public of the change in how the cost of borrowing will now be determined.

The news is, for the first time in Kenya’s financial history, the interest rate a borrower pays will be significantly influenced by their own individual behaviour, discipline and overall creditworthiness, as determined by their credit score.

Until this year, lending rates were largely assessed at portfolio level, using broad borrower segments and product categories, that did not differentiate between good and bad behaviour within the same bracket. Under the new regime, this approach has been replaced with a single-obligor assessment model, where each borrower is evaluated independently based on their performance across all credit relationships.

The primary tool used in this process is the credit score, a numerical representation of one’s repayment behaviour, reliability and consistency in meeting financial obligations.

Credit scores are determined by the CRB from a holistic view of the borrower based on how they borrow and repay in banks, digital credit providers, trade and insurance and, importantly, Sacco loans.

This development places Sacco members in a highly advantageous position. For decades, Saccos have encouraged a culture of regular saving, disciplined borrowing and mutual accountability.

The very nature of the Sacco model promotes stable financial behaviour, and as Sacco loan data becomes more deeply integrated into the credit information ecosystem, members with strong Sacco histories now enjoy higher scores and, consequently, access credit at lower interest rates in the banking sector.

Today, Sacco loans have NPLs of below 8.5 percent against over 16 percent for commercial banks, and over 30 percent in microfinance and digital credit provider institutions.

As a result, borrowers with at least one Sacco loan, have 10 percent better credit scores than their counterparts without Sacco loans.

In Kenya, the word ‘Sacco,’ just like the word ‘bank,’ carries a specific legal and social weight. These are protected titles that cannot be used casually or carelessly. One cannot simply register a company and call it a Sacco without meeting strict regulatory thresholds.

Even investment cooperatives are designated as SICOs, while transport cooperatives are referred to as TRANS-COOPs.

Standards required to operate as a Sacco are intentionally high, reflecting the level of trust placed in this sector by both regulators and the public. Few industries in the country enjoy the depth of confidence, cultural significance and societal legitimacy that the cooperative movement in Kenya commands.

The strength of Saccos is rooted in Kenya’s history.

The cooperative movement emerged in the 1930s during the colonial era, when African farmers and workers were deliberately excluded from formal markets. Cooperatives became a vehicle through which communities pooled limited resources, accessed markets and created their own financial systems in the face of deep structural discrimination.

The democratic nature of Saccos, with the principle of one member, one vote, plays an important role in entrenching accountability.

In credit transactions, Saccos use guarantee models to generate collective responsibility, which also acts as an internal control system that boosts borrower behavior.

This social capital is now an asset in credit pricing. The shift to risk-based pricing now formally rewards this model and the resultant discipline it builds.

Starting or joining a Sacco is not hard. The journey of a Sacco typically begins with a handful of individuals who feel excluded or underserve by the existing financial structures. They may start as a small chama.

Over time, as membership, trust and capital grow, the group formalizes into a closed Sacco, later graduating into a non-withdrawable deposit-taking (NWDT) Sacco and, eventually, a fully licensed deposit-taking (DT) Sacco. This organic progression is part of the maturity of the credit character.

Kenya’s Sacco regulatory regime is progressive. Regulators are now focusing on the next phase of the Sacco evolution, which is digital enablement. In recent engagements with officials from the Sacco Societies Regulatory Authority (Sasra), I got to understand they have a plan for the smaller Saccos.

Recognizing the high cost of digital transformation and automation, they have proposed to rollout a shared infrastructure model that will reduce the capital burden associated with modern loan origination systems (LoS), core banking platforms and digital channels.

Through a shared services framework, even smaller Saccos will be able to achieve efficiencies comparable to large institutions. This will lead to improved cost-to-income ratios, enhanced governance, better member experience and stronger competitiveness across the sector.

This digital transformation will have the added benefit of enabling the Saccos to easily transmit the information and data of their members to CRBs for use in credit scoring. So that, even members of smaller Saccos, can start to enjoy the lower interest rates members of the larger Saccos are already enjoying.

Today, in the new era of risk-based credit pricing, being a Sacco member is a big asset. More importantly, borrowing responsibly and honoring credit obligations boosts your credit score, which leads to greater access to loans and other forms of credit at a significantly lower cost.

The hyper-connected, open-plan, always-online workplace makes it easy to confuse camaraderie with career growth.

We all want to be liked at work. We gravitate toward people who laugh at our jokes, vent with us about tough clients, and maybe even share a matatu route home. But when it comes to professional development, liking someone, or being liked, is not enough.

The hard truth is this: if your goal is to grow, lead, and thrive in your career, you do not need a bestie in the office. You need a mentor.

Having a work bestie can feel like the perfect safety net. They ‘get’ you. They have seen your bad days, covered for you when you were late, and exchanged a thousand memes with you during long afternoons. They may even be your constant companion at team lunches.

But this comfort, while emotionally satisfying, can quietly stall your progress. Work besties are usually peers-people at the same level of experience and influence. That means they’re often in no better position than you are to help shape your career strategy or guide your next step. In fact, they may unconsciously prefer things to stay as they are, because your growth could shift the balance of the friendship.

A mentor, on the other hand, is not invested in maintaining the status quo. Their role is to challenge your assumptions, stretch your vision, and push you, gently or firmly, out of your comfort zone. As human-resource consultant and career coach James Watare puts it: ‘Look for someone who has been where you want to go and is willing to show you how they got there. Mentors do not just approve your ideas; they question them, refine them, and help you act on them.’

His experience coaching young professionals in Kenya reinforces that mentorship is not a ‘nice to have’ but a fundamental step in career growth.

‘A mentor brings something your bestie often cannot: perspective. They have experience, both in your industry and within the organisation, and can help you see opportunities and pitfalls you might otherwise miss,’ he says.

While a bestie will validate your feelings after a difficult meeting, a mentor will ask what you might do differently next time. A bestie will sympathise with your frustrations; a mentor will encourage you to find solutions.

‘Too often, I see young professionals message recruiters or seniors with ‘Hi, any job?’-no structure, no clarity,’ Mr Watare notes. ‘The same lack of intention shows up when they choose mentors. They look for someone nice instead of someone strategic.’

None of this diminishes the value of emotional support. In high-pressure environments, having someone to talk to can make the difference between burnout and balance.

But emotional support is not the same as professional development. Besties may always be on your side, but mentors are on the side of your progress, and that sometimes means hearing what you don’t want to.

Kenyan cultural challenges

The Kenyan workplace brings its own cultural challenges to mentorship. Hierarchies, age gaps, and unspoken rules can make approaching a senior colleague feel intimidating. There is a fine line between being eager and being seen as overly ambitious.

But mentorship does not have to be formal. It often starts with curiosity, observation, and small conversations.

Mr Watare advises professionals to notice how seniors respond to client push-back, handle negotiations, or lead discussions. ‘Then ask for five minutes after a meeting: ‘What would you have done differently?’ That’s how informal mentorship begins,’ he says.

As the continuous voter registration exercise is ongoing across the country, civic education should be a priority in addressing high voter apathy among Kenyan youth. Low voter registration among the young is worrying,

Preparing youth to be responsible citizens and participate in elections and governance is important. However, due to a lack of information, many youths are left out.

The low turnout of Kenyans coming up to register to participate in elections provides the obvious justification for the robust civic education and should motivate all players to engage the electorate, especially the youth, to register.

The target of the Independent Electoral and Boundaries Commission (IEBC) is about six million eligible voters. However, voter registration is dismal, especially among the youth.

The IEBC should intensify civic education to interest, reach and register more young people.

Civic education and registration drives should target communities, universities, colleges, youth events and online platforms to ensure that Kenya’s largest demographic takes its rightful place at the ballot box in 2027.

Youth are by far the largest component of Kenya’s population and voters. Civic education would enlighten young people on the ins and outs of the Constitution, the democratic and electoral processes.

More should be done to reach the youth, at their formative stages-catch them young, as the saying goes.

Kenya can borrow some lessons from Ghana, which has rolled out civic education clubs. The clubs are designed to encourage students to study the constitution and deepen their understanding of democracy and nation-building.

The clubs were established to engage young people in discussions on the constitution, helping them appreciate its principles and relevance as the country’s supreme legal framework. The initiative is aimed at instilling patriotism and civic responsibility in learners.

Civic education is not only good for free, fair and peaceful elections, but it is necessary for the fulfilment of citizens’ civic duty and the consolidation of Kenya’s elections and governance system. Also, civic education would help to strengthen youth civic values and contribute positively to national development.

Former Chief Justice Willy Mutunga, while addressing the National Youth Leaders Convention, remarked that the folly of the country’s political class has put the youth in a moral vacuum, with no idea of what is right and what is wrong.

Indeed, the complex nature of Kenya’s elections that require voters to elect six representatives, coupled with charged and polluted political campaigns and limited non-partisan information, makes it difficult for citizens to tell what is true and what is untrue.

Civil society has an important role in educating the public on democratic values and behaviour.

Equally important, civil society’s public education and engagement campaigns on elections are critical for citizens’ informed participation in the electoral process.

Credible and peaceful elections require concerted effort. The public, the Executive, Parliament, the Judiciary, political parties, civil society, religious leaders, the media and the private sector, with support from development partners, must all come together to deliver the best elections for Kenya.

Kenya’s 2027 elections will benefit in a big way from the support and diligence of credible national and international civil society and electoral observers. Therefore, the country has no excuse to lock out credible and worthy support.

In 2001, when then President Daniel arap Moi tried to stifle civic education programmes, members of the opposition parties, led by Mwai Kibaki, and the Kenya Episcopal Conference, chaired by Bishop John Njue, realising the importance of public education, stood firm and cautioned the government against the dangers of demonising civic education.

Truth be told, Kenyans can never build a strong democracy and a great country if they are not well-informed. Let us not forget that to vote is not merely to tick boxes.

Most importantly, citizens’ participation in the electoral process must be based on an informed and profound understanding of their rights and responsibilities, not just participation for the sake of participation.

Kenya must support objective, impartial, neutral and independent civic education that aims to enhance citizens’ informed participation in the electoral process and active engagement in their own governance.

Kenyan businessman Paul Wanderi Ndung’u has lost a legal bid to reinstate his 17 percent stake in SportPesa Global Holdings Limited (SGHL) after a London court dismissed his claims of unfair prejudice or harm to minority shareholders.

Mr Ndung’u had sued SGHL, which is affiliated to the Kenyan unit of Sportpesa, and some of his co-directors after his shareholding was diluted to 0.85 percent between 2019 and 2022 in the wake of three rights issue totaling £1.9 million (Sh325.5 million).

The trader, who is also fighting for control of SportPesa brand in Kenyan courts, claims that his fellow directors hatched a scheme through forgery and equity fund raising to dilute his ownership.

He sought restoration of his original 17 percent stake, rectification of SGHL’s share register, damages for financial losses and wrongful dismissal as a director as well as legal costs for the mega suit.

However, the London court ruled against offering the Kenyan businessman remedies, citing lack of evidence that SGHL directors and majority shareholders run the firm in a manner that was harming the interest of minority shareholders or Mr Ndung’u. It also ruled claims of forgery and falsification of board communications lacked evidence.

It also ruled out cases of forgery and falsification of board communications.

“More specifically, the claimant has failed to establish that there has been any conduct of the affairs of the company which has caused him to suffer prejudice, in his capacity as a member of the company. The failure of the claimant to establish unfairly prejudicial conduct means that the question of remedies does not arise,” said the judge.

Under the UK law (Companies Act) unfair prejudice occurs when affairs of the firm are run in a manner that harms the interest of minority shareholders leading to share dilution, exclusion or breakdowns of trust.

The legal spat was triggered by the three rights issue that started on October 17, 2019 after Sportpesa trading under Pevans stopped operations in Kenya in September 2019 due to a drastic hike in taxes on betting stakes.

Its closure, which also saw rival Betin Kenya end Kenya operations, triggered a financial crunch in SGHL, prompting the three cash calls £500,000, £500,000 and £900,000.

SGHL directors Ivaylo Bozoukov and Kalina Karadzhova authorized three capital injections (£500,000 in October 2019, £500,000 in December 2019, and £900,000 in December 2021) to keep the company solvent.

Kenya shareholders, Mr Ndung’u and Asenath Wacera, did not participate in the issue, leading to dilution of their stakes.

Mr Ndung’u’s stake dropped to 1.5 percent from 17 percent after failing to take up the first and second offers.

Meanwhile, the stakes of Bulgarian investor Guerassim Nikolov rose from 21 percent to 46 percent while that of US shareholder, Gene Grand, increased to 29.88 percent to 21 percent, court records show.

This forced Mr Ndungu to file a petition at the London court seeking restoration of his 17 percent stake.

He argued that the SGBL board minutes showing approval of the first rights issue of £500,000 were falsified. Mr Ndung’u said that he was not informed of October and November 2019 board meetings and that the notice of the first rights issue offer arrived after its expiry, locking him out of the fundraiser.

In the first issue, Mr Ndung’u did not participate because he was not properly notified.

The offer was sent via DHL and to an address which had not been specified by the businessman for the purpose of receiving communications from the company, causing him to miss the deadline.

He received the letter past the deadline date for acceptance and as result his shares reduced from 17 percent to 2.83 percent.

In the subsequent second and third capital raises, he was also willing to participate but there was a tussle on whether allocation of his pre-emption rights was to be based on the proportion of 2.83 per cent or the 17 percent shareholder in the company.

Mr Ndung’u had insisted that the allocation should be based on 17 percent and asked the directors to amend the offer letter.

He also sent the company the form of acceptance letter, dated January 3, 2022 stating he agreed to pay £323,000 to cover all the three right issues (£85,000 for the first Capital Raise, £85,000 for second and £153,000 for the third). He pegged these figures on the belief that his stake was 17 percent.

However, the company and two of his co-directors maintained that he could only subscribe for the amount of shares specified – the reduced shares.

In his court case Mr Ndung’u accused Bozoukov and Karadzhova of conspiring to sideline Kenyan shareholders, alleging exclusion from key meetings and withholding critical financial information.

He also alleged falsification of meeting minutes to justify share dilution. He told the court that his shareholder rights had been ignored and that he had been deliberately pushed out of the company.

Mr Ndung’u alleged the capital raises were engineered to sideline him and weaken the influence of Kenyan shareholders at the company.

But the London court dismissed his petition, while admitting that SGHL breached section 561 and 562 of the UK company law in shepherding rights issues.

Section 561 demands that firms must offer new equity shares to existing shareholders first, proportionally to their existing holdings, before offering them to others, to prevent dilution of their stake.

Section 562 governs the communication of pre-emption offers, requiring them to be sent in hard copy or electronic form, stating a minimum 14-day acceptance period that cannot be shortened, and detailing start dates for these periods.

The court found that the SGHL failed to follow the strict rules governing new share allotments.

However, he reckoned that the breaches were not intentional and that the company did not anticipate that the meeting notices sent to Mr Ndung’u’s email and physical addresses would not reach him.

The judge also found the company and Bozoukov did not deliberately send the offer letter for the first rights issue to a wrong address.

‘The breaches of sections 561 and 562 (the first breach), which occurred in relation to the first offer letter, were inadvertent. There was no deliberate conduct and no scheme to dilute the claimant’s shareholding in the company,’ said the judge.

‘There was no illegality in relation to the third capital raise and no scheme to dilute the claimant’s shareholding in the company. I find that the alleged scheme never existed,’ he added, while giving a similar verdict on the second rights issue.

In regard to fraud or conspiracy allegations, the court found no evidence directors Ivaylo Bozoukov and Kalina Karadzhova intentionally diluted Mr Ndung’u’s stake.

It ruled there was no credible evidence that meeting minutes had been falsified to justify share issuances.

“If the forgery allegations had been established, they would have provided support for the case that the second and third defendants (Ivaylo Petev Bozouko and Kalina Lyubomirova Karadzhova), assisted by Mr Robert Macharia, were working in concert to dilute the claimant’s shareholding in the company,” said the judge.

The court also dismissed the unfair prejudice claim under Section 994 of the Companies Act.

The judge said there was no evidence that SGHL acted in a way that unfairly harmed him as a shareholder.

Mr Ndung’u had not been actively involved in the company’s management before the dispute and had raised no objection to this before the first capital raise.

‘I have difficulty in seeing how this lack of involvement, which does not appear to have generated any protest from the claimant (Mr Ndung’u ) until his discovery of the implementation of the first capital raise, can be said to have constituted unfairly prejudicial conduct,’ the judge observed, dismissing his argument that he had been excluded unfairly.

The judge reckoned that the factions started to fight before the rights issue fall out at Kenya’s Pevans East Africa, which owned the SportPesa brand before its transfer to SGHL.

“The lack of trust which existed between the two groups, at least by 2019, is manifest in the evidence,” said the court.

Ownership structure of Pevans and SGHL was nearly similar.

Trouble at Pevans became public in October 2022, when a general meeting was held in Dar es Salaam, which was convened under a special resolution to expel Mr Ndung’u and Ms Wacera.

The directors of the betting firm then sought from the court, orders stopping Mr Ndung’u and Ms Maina from filing any case on behalf of the company, saying they have no authority having been expelled.

The SportPesa brand returned on October 30, 2020, through Milestone Games. The brand got its first approval from the BCLB, triggering the court fight for the key assets of the gaming firm, including the trademark and web domains.

Online sports betting companies such as SportPesa had grown rapidly in Kenya in the years to 2019, riding a wave of enthusiasm for sports, with the government saying the gaming industry achieved a combined revenue of over Sh250 billion in 2018.

That sparked government concern about the social impact of betting, prompting tax hikes and introduction of new gambling regulations, including restriction on advertising outdoors and on social media.

Founders of Pevans East Africa earned dividends totaling Sh7.6 billion in the four and a half years to June 2019.

The payouts, disclosed in Pevans’ audited financial statements and management accounts earlier seen by Business Daily, created new billionaires and expanded the fortunes of others who were already wealthy.

Among those who scored big are foreign and local entrepreneurs including Ms Wacera, Nikolov, Paul Ndungu, and Ronald Karauri.

Mrs Maina and Nikolov earned gross cumulative dividends of Sh1.6 billion each, based on their stakes of 21 percent each in the company.

Ms Wachera and Nikolov earned gross cumulative dividends of Sh1.6 billion each, based on their stakes of 21 percent each in the company.

The documents show that Pevans started paying dividends in 2015 when it made a distribution totaling Sh1.57 billion. The shareholders had a banner year in 2016 when the firm paid a record dividend of Sh4.3 billion.

The payout fell drastically to Sh290.3 million in 2017 and rose to Sh876.5 million the next year.

Pevans paid a dividend of Sh559.9 million in the half year ended June 2019 and ceased operations soon thereafter when the government clamped down its operations over alleged non-payment of taxes.

Kenyans looking toward 2026 share a broad yet deeply felt hope for economic relief that genuinely touches their daily lives-a hope grounded in the reality that, despite years of growth, many households still struggle under the weight of high living costs, unemployment, and a public debt burden that siphons away resources needed for vital services.The year ahead holds the promise of a 5 percent GDP growth rate, but the central question remains whether this growth will trickle down to ordinary people in the form of stable prices, new jobs, affordable credit, and improved incomes.For countless families across Kenya, the price of basic commodities is a source of daily anxiety. Food, fuel, transport-these essentials have become painfully expensive, eroding the purchasing power especially of low- and middle-income households.The public’s collective wish is simple yet profound: a sustained easing of these costs to relieve the financial squeeze on millions. This cannot be achieved by wishful thinking alone but requires targeted actions such as boosting agricultural productivity, reducing supply chain inefficiencies, and stabilising energy prices. The government and private sector must collaborate to ensure enough food comes to market at affordable prices, and that energy tariffs do not climb unchecked. Otherwise, headline GDP growth risks masking the lived experience of many who still struggle to put meals on the table.Job creation, particularly for the youth, is another hope that burns bright. Kenya’s relatively young population is both a demographic advantage and a challenge. Without formal employment opportunities, thousands of young people are left vulnerable to insecurity and economic insecurity.There is no silver bullet, but structural reforms are urgently needed to stimulate private sector expansion and diversification. Incentives for companies to create jobs, especially in manufacturing, agriculture value addition, and the digital economy, could mobilise latent productivity.Education and skills training must also be reoriented to the realities of today’s job market rather than outdated curricula disconnected from employer needs. The hope in society is that 2026 will bring real progress in turning this youth dividend into sustainable livelihoods. Credit access remains a thorny issue. Although the Central Bank cut its policy rate earlier this year, many businesses and households are yet to see the benefit in their loan and mortgage rates.If banks continue to charge high premiums while maintaining tight lending standards, investment and consumption will remain constrained. Kenyan businesses, especially SMEs which are critical drivers of economic activity, often find themselves priced out of credit or forced to turn to informal, costly sources of financing.There is a window of opportunity as fintech innovations and government-backed credit guarantees are gaining traction, potentially democratising borrowing.Nevertheless, translating Central Bank rate cuts into cheaper credit will require a dedicated effort from financial institutions to pass on savings, and for continued regulatory oversight.Incomes, not just GDP, must rise meaningfully. The aspiration among many Kenyans is for broader prosperity where economic growth reduces poverty and elevates real wages across various sectors. This calls for deliberate policies that promote local value addition, industrialisation, and productivity gains.Too much of Kenya’s growth remains concentrated in capital-intensive or informal sectors where labour absorption and wage growth are limited. Improving workers’ bargaining power and supporting sectors with high employment multipliers is key. Without this, there is a risk that economic growth becomes a hollow statistic disconnected from everyday realities.Fiscal discipline and public debt management feature prominently in the national conversation. Kenya’s public debt has burgeoned rapidly in recent years, with over 65 percent of revenue now committed to debt servicing. This leaves scant resources for public investment in critical infrastructure and social services.Citizens rightly desire more prudent fiscal management-cutting wasteful expenditures, lengthening debt maturities to lower rollover risks, and expanding domestic revenue mobilisation without resorting to additional tax hikes that could stifle growth.The government is walking a tightrope and must continue demonstrating fiscal responsibility to maintain investor confidence and preserve public trust.Macro stability remains a silent pillar underpinning all these hopes. Stable inflation, exchange rates, and consistent policy environments are essential to unlock investments that create jobs and increase production.This stability has multiple dividends: it helps consumers plan and spend sustainably; it reassures foreign and domestic investors; and it reduces economic uncertainty that disproportionately harms the poor.Kenya’s policymakers have made progress in this area, but complacency is not an option in a world where external shocks remain a persistent threat.Many Kenyans also hope the tax system will become less burdensome and fairer. The backlash following recent tax hikes exposed a deep-seated unease that the cost of public services is falling disproportionately on ordinary citizens.The wish now is for the government to focus on broadening the tax base and plugging leaks rather than introducing new, heavy taxes.Enhanced efficiency in tax collection, alongside expanding the formal economy, can increase revenues without squeezing those least able to pay. Vision 2030 and the Medium-Term Plan recognize this need, but delivery must improve. Finally, there is a strong yearning for better social services-healthcare, education, and social safety nets-that target the most vulnerable. Investment in these areas is critical for building human capital and fostering resilience in the face of economic shocks.The Governments Bottom-Up Economic Transformation Agenda rightly prioritizes these sectors with increased budget allocations. However, money alone is not enough; wise management and transparency in public spending will ensure that funds translate into meaningful improvements.These wishes for 2026 encapsulate a larger economic truth: growth alone is not sufficient. Kenya must translate its macroeconomic progress into tangible improvements in everyday life. This requires holistic, integrated policies that address inflation, jobs, credit, incomes, debt, stability, taxation, and social sectors simultaneously.Those in government and the private sector should listen carefully-the aspirations of ordinary Kenyans are not just hopes; they are a roadmap for sustainable development and social cohesion.Success in 2026 will be measured not just by GDP figures but by more affordable food on the market, meaningful jobs created that stimulate economic growth across all sectors, loans disbursed, incomes lifted, debt managed prudently, stable prices, lighter tax burdens, and accessible quality services.The journey ahead is complex and will not be without setbacks. Yet, these economic wishes represent more than just hope-they embody the resilience and determination of Kenyans to build a brighter future where prosperity is shared equitably and sustainably.The collective voice of millions deserves to be heard and reflected in policy choices that prioritize the welfare of the many over the interests of a few. As citizens, businesses, and leaders rally around these goals, 2026 could be a turning point toward a more inclusive Kenyan economy.

The Tax Appeals Tribunal has dismissed a challenge by Jo World Agencies Limited over a disputed tax claim of Sh346.2 million, ruling that the ICT company failed to prove that the Kenya Revenue Authority’s (KRA) assessment was incorrect.

The ruling stemmed from a KRA audit of the company covering 2017 to 2022, during which the authority examined the firm’s filings, bank accounts and financial records.

KRA issued assessments for several taxes, including corporate income tax, PAYE, withholding tax, excise duty, betting tax, and gaming tax.

The company objected to the assessment in September 2024, arguing that KRA ignored crucial explanations and documents.

It argued that KRA disallowed legitimate business expenses and failed to consider exempt income from Official Aid-Funded Projects.

It also contended that KRA’s assessments were based on ‘mechanical exercises’ that did not reflect the nature of its ICT business.

However, the tribunal ruled that the company did not meet the legal burden of proof under Section 56 of the Tax Procedures Act, which requires taxpayers to demonstrate that a tax decision is incorrect.

The tribunal noted that while the company insisted it had provided the Commissioner with supporting documents, it failed to prove that any records were actually submitted during the objection process.

Additionally, the company did not present those documents before the tribunal.

‘In any proceedings. the burden shall be on the taxpayer to prove that a tax decision is incorrect,’ the tribunal stated, quoting Section 56(I) of the Tax Procedures Act.

Jo World Agencies argued that the tax assessment was erroneous and based on undisclosed income tests.

The company claimed it had been ‘condemned unheard’ because KRA ignored the information it supplied during the objection process.

However, the tribunal rejected this argument, noting that the firm provided no proof that it had submitted any documents to KRA or presented them to the tribunal.

‘The appellant neither provided proof that it indeed presented any documents to the respondent nor availed any of the documents to the tribunal at the appeal stage, in accordance with the provisions of Section 30 of the Tax Appeals Tribunal Act,’ the ruling stated.

The tribunal emphasised that taxpayers must maintain proper records under the Tax Procedures Act and found that the company had failed to meet this obligation.

Without documentation, the tribunal said it could not overturn KRA’s decision.

‘The appellant. failed to discharge the burden of proof placed upon it by statute,’ it added.

KRA argued that the law permits it to rely on available information when a taxpayer fails to maintain or submit proper records.

It defended its use of banking analysis and variance tests, citing previous court rulings that deemed bank deposit analysis a reasonable assessment method when applied fairly.

Regarding Jo World’s claim that some of its supplies were exempt under the Official Aid-Funded Projects category, the tribunal found no supporting documentation.

The firm also contested KRA’s use of banking analysis to estimate undeclared income, arguing that cash purchases were wrongly disallowed and that KRA failed to exclude exempt supplies linked to aid-funded projects.

However, the tribunal did not address the merits of these arguments, stating that they lacked documentary evidence.

The ruling stressed that mere pleadings cannot overturn a tax assessment, citing precedent that claims must be substantiated, not just asserted.

The tribunal concluded that Jo World Agencies failed to provide evidence refuting KRA’s figures or demonstrating inaccuracies in the assessment.

It also ruled that the dispute over timelines had been resolved once KRA addressed the objection.

Kenya’s floriculture industry, one of the most valuable export sectors, is confronting a convergence of pressures that threaten its long-term competitiveness.

Without urgent interventions, Kenya risks losing its advantage in a market where quality, compliance, and sustainability now command the highest premiums.

The broader horticulture industry plays a crucial role in the agricultural economy, supporting millions of livelihoods directly and through its extensive value chain, while also serving as a significant source of export earnings.

While the sector remains a cornerstone of the economy, the environment in which flower growers operate has never been more complex. The scale of the industry underscores why safeguarding its competitiveness must be a national priority.

Flower export destinations, particularly in Europe, continue to impose stricter standards as policies evolve. These standards require heightened traceability, lower chemical residues, environmental sustainability, and verifiable carbon management, all factors that increase compliance costs.

For small and medium-sized growers, who form a significant portion of the floriculture base, meeting these requirements can be overwhelming.

The regulatory burdens at home add further strain as multiple taxes, levies, licence fees, and shifting policy directives increase the cost of production and introduce uncertainty into an industry that thrives on predictability.

Infrastructure limitations such as poor road networks, inadequate cold storage, and congestion at export hubs also contribute to rising costs and shrink exporters’ margins.

Disease pressure is escalating as well. Fungal diseases, such as powdery mildew and botrytis, continue to challenge growers, and over-reliance on older, less effective crop protection solutions increases the risk of resistance.

When these products become less reliable, growers are forced to apply them more frequently, which not only increases costs but also raises the risk of exceeding residue limits, jeopardising access to premium export markets.

To build a more sustainable and competitive future, Kenya’s floriculture industry must embrace several interconnected strategies. Innovation in crop protection must be prioritised.

There is a need to introduce newer and more effective tools that reduce reliance on outdated pesticides and chemicals.

The floriculture sector has vast potential, but its resilience depends on modernising the tools available to farmers and all stakeholders across the value chain, which move produce from soil to market, and ensuring that the regulation keeps pace with scientific progress.

This would ensure that floriculture remains a strong pillar of the national economy while protecting the livelihoods of millions of Kenyans.

This must be paired with stronger integrated pest management systems, supported by research institutions to anticipate emerging pest and disease threats.

We have not stood still as an industry. We have been actively responding by investing in modern crop protection solutions with new modes of action that help manage resistance more sustainably.

This must go in tandem with strengthening Integrated Crop Management (IPM) systems, adopting preventive approaches, and incorporating monitoring tools that help predict and respond to emerging disease threats more efficiently.

As an industry partner, we support ongoing regulatory efforts aimed at strengthening efficiency and adaptation, so that innovative, safe, and effective crop protection solutions can be made available to growers promptly.

Across the sector, partnerships between research institutions, agricultural companies such as Corteva Agriscience, and universities will help generate localized data on pests, diseases, and climate impacts, allowing growers to make more informed decisions.

Equipping growers with the knowledge needed to meet global compliance standards, from residue management and documentation to environmentally responsible agronomic practice, is also essential.

Innovation in crop protection should therefore not be a peripheral consideration but a central driver of resilience. Infrastructure development is equally important. Expanding cold-chain capacity, rehabilitating rural roads, and improving efficiency at ports and airports would reduce post-harvest losses and uphold product quality.

Standard Investment Bank (SIB) says the National Treasury is selling its 15 percent stake in Safaricom at a discount of 15.4 percent, based on comparisons of recent transactions of similar assets and the telco’s expected future earnings.

The transaction announced last week is priced at Sh34 per share where the buyer -South Africa’s Vodacom Group will pay the government Sh204.3 billion for the six billion shares.

The investment bank however sees the fair value of the company at Sh40.19, signifying a higher premium to the prevailing market price and Vodacom’s offer price.

‘The transaction price of Sh34 is a premium of 20.6 percent to the current market price but a discount of 15.4 percent to our fair value estimate of the business,’ SIB said in a research note.

The fair value is a measure of an asset’s current market value which assumes a free negotiated price between a buyer and the seller.

The higher fair value estimate of Safaricom suggests that the government could be leaving about Sh37.1 billion on the table by selling its 15 percent stake in the telecom’s operator at Sh34 per share.

The government has also sold its rights to receive Sh55.7 billion worth of future dividends on what will be its residual stake of 20 percent in Safaricom to Vodacom for an upfront payment of Sh40.2 billion, discounting the future cash flows by Sh15.5 billion.

The National Treasury has stood by its valuation of the company amid contention on pricing from various quarters, highlighting the divestiture to an existing partner in Vodacom and low settlement risks.

‘The partial divestiture especially to an existing partner like Vodacom enables the government to realize optimal value from its mature investment by selling at Sh34 per share which represents a significant premium compared to the market price as opposed to an on-market sale which would typically attract a discount to the market price,’ the Treasury said in a sessional paper to Parliament.

‘It has also been agreed that the proceeds generated will be paid in US dollars amounting to $1.577 billion. This transaction eliminates any settlement risk, as Vodacom has a strong financial capacity and proven track record in completing similar investments.’

The shareholding of the South African multinational in Safaricom will rise to a controlling 55 percent from the current 35 percent. The Johannesburg Stock Exchange-listed firm is also buying a five percent stake in Safaricom from its parent firm Vodafone Group at a cost of Sh68.1 billion and at the same price of Sh34 per share.

‘Vodacom Group Limited, will in effect gain control premium on Safaricom Plc, implying that Safaricom financials will be consolidated by Vodacom Group Limited, with the remaining shareholding treated as minority, in line with IFRS standard,’ SIB added.

The government says proceeds from the transaction are expected to be deployed to critical infrastructure investment priorities including energy, roads, water and airports.

The National Treasury has asked Members of Parliament (MPs) to give the transaction the green light and has also highlighted approvals and notifications from relevant regulators and stakeholders including the Competition Authority of Kenya, the Central Bank of Kenya, Communications Authority of Kenya and the Nairobi Securities Exchange.

‘The National Assembly is requested to consider and approve the proposal for partial divestiture by the government of Kenya of its shareholding from 35 percent to 20 percent in Safaricom Plc,’ the National Treasury said.