Milk shortage: Managing surpluses to strengthen year-round supply

Kenya’s current milk shortage is a reminder of a problem the dairy sector has faced for years: we have not yet learned how to effectively manage the seasonal nature of milk production. Formal milk deliveries to processors fell from 84.4 million litres in June to 81.3 million litres in July 2026 as dry and cold conditions reduced pasture and fodder availability.

Yet Kenya periodically faces the opposite problem. During good rains and abundant fodder, milk production can exceed what processors and the market can immediately absorb. The sector has long experienced a cycle of oversupply during wet seasons and undersupply during dry seasons.

The question should not simply be how we increase milk production. It should be how we manage milk production throughout the year.

Kenya needs greater investment in milk powder and other shelf-stable dairy products during peak production periods.

Instead of allowing surplus milk to depress farm-gate prices or go to waste, processors should have enough capacity to convert excess fresh milk into powder. This creates a strategic reserve that can be reconstituted when production falls.

We also need stronger cold-chain infrastructure and milk aggregation systems. Investment in cooling centres, efficient collection networks, storage and transport can reduce post-harvest losses and enable processors to collect more milk during high-production periods.

Farmers, meanwhile, need stronger incentives to invest in fodder conservation. Silage, hay and other preserved feeds should become a routine part of dairy farming rather than an emergency response to drought. Extension services should place greater emphasis on fodder budgeting, water harvesting and climate-smart dairy production.

There is also a cultural issue to confront: the perception of milk powder. Many consumers automatically consider fresh milk superior, while powdered milk is viewed as a second-class alternative. Properly processed milk powder is a safe, convenient and valuable dairy product that helps ensure year-round milk availability.

The current shortage should be treated not merely as a crisis, but as a lesson in food-system resilience. When milk production rises again, Kenya should use that abundance to prepare for the next dry season. When farmers have too much milk, Kenya should save it; when they have too little, Kenya should have a reserve to fall back on.

Intrigues in KQ investor hunt as Kamal departs

Conflicting interests have delayed Kenya Airways’ turnaround plans even as the national carrier’s acting CEO George Kamal exited abruptly after eight months on the job.

Multiple insiders familiar with the airline’s turnaround plans revealed behind-the-scenes intrigues that saw a strategic investment offer scuttled in January 2026 after interest groups demanded that the ‘field be opened to more players’.

At least four firms had expressed interest in KQ, as the airline is popularly known, with proposals including cash injections or providing airplanes in exchange for a strategic equity stake in the airline.

‘There was an investment offer around January that was about to be sealed, but some interest groups emerged and started pushing for opening doors for more parties,’ a source told Business Daily.

Sources said this tussle prompted the airline to revert to a tender system to recruit a strategic investor, further delaying the turnaround plans.

Consultancy firm KPMG was picked to prepare an investment memorandum to guide the tender, with the KQ board approving the document.

The international tender for a strategic investor is, however, yet to be floated nearly seven months after the earlier investment offer was scuttled.

KQ board chairman Kiprono Kitonny said the tender plans remain on course and denied claims of fallouts over the strategic investment following Mr Kamal’s abrupt exit.

‘We are all on the same page. We have the investor memorandum that has been done by KPMG, and now we’re in the process of appointing a transaction advisor,’ Mr Kittony told the Business Daily, adding that the open tendering process is the ideal situation since KQ is a publicly listed company.

KQ has been searching for a strategic investor for years, with the latest push coming as the airline grapples with mounting financial pressures and negative equity. The carrier posted a Sh17.2 billion net loss in 2025, reversing a Sh5.4 billion profit a year earlier, while its first-half loss widened further to Sh16.1 billion in 2026.

The plan has also evolved from a search for a single cash investor into a broader exercise that could involve different forms of capital and strategic support.

President William Ruto’s government had previously sought a strategic investor for its 48.9 percent stake in KQ. In December 2022, Dr Ruto met executives of Delta Air Lines in Washington, amid efforts to attract the US carrier as a potential strategic investor. The discussions crumbled as the carrier explored a merger with South African Airways, which also failed to materialise.

‘There was an investment offer around January that was about to be sealed, but some interest groups emerged and started pushing for opening doors for more parties,’ a source told Business Daily.

Sources said this tussle prompted the airline to revert to a tender system to recruit a strategic investor, further delaying the turnaround plans.

Consultancy firm KPMG was picked to prepare an investment memorandum to guide the tender, with the KQ board approving the document.

The international tender for a strategic investor is, however, yet to be floated nearly seven months after the earlier investment offer was scuttled.

KQ board chairman Kiprono Kitonny said the tender plans remain on course and denied claims of fallouts over the strategic investment following Mr Kamal’s abrupt exit.

‘We are all on the same page. We have the investor memorandum that has been done by KPMG, and now we’re in the process of appointing a transaction advisor,’ Mr Kittony told the Business Daily, adding that the open tendering process is the ideal situation since KQ is a publicly listed company.

KQ has been searching for a strategic investor for years, with the latest push coming as the airline grapples with mounting financial pressures and negative equity. The carrier posted a Sh17.2 billion net loss in 2025, reversing a Sh5.4 billion profit a year earlier, while its first-half loss widened further to Sh16.1 billion in 2026.

The plan has also evolved from a search for a single cash investor into a broader exercise that could involve different forms of capital and strategic support.

President William Ruto’s government had previously sought a strategic investor for its 48.9 percent stake in KQ. In December 2022, Dr Ruto met executives of Delta Air Lines in Washington, amid efforts to attract the US carrier as a potential strategic investor. The discussions crumbled as the carrier explored a merger with South African Airways, which also failed to materialise.

Kenyan pastry chef who found success in New York, California

This month, Bhavana Rao is heading to California to take up a job as head pastry chef at a newly built restaurant. It is a big step in a journey she nearly did not take, having initially been steered toward the seemingly more stable world of business.

There is also some irony in the destination. When she was in culinary school, pastry was the one area where the 28-year-old Kenyan chef struggled. Her cooking and knife skills were exceptional, and she excelled at savoury dishes, but baking and sugar work often fell short.

Today, after four years as pastry sous chef at two-Michelin-starred Blue Hill at Stone Barns in New York, she is preparing to take charge of a pastry kitchen in California.

‘I have always had a fascination with food, not just as a product that you create, but also with the ingredients,’ she says. ‘I’ve always wanted to know where they’re coming from, how long they take to grow, and why they are grown the way that they are.’

That curiosity would eventually take her from Cape Town to New York, Singapore, Marseille and now California.

The road not taken

Bhavana’s interest in food began early. In high school, she chose food and nutrition as an elective and later hoped to attend Le Cordon Bleu in Europe. The cost, however, made that difficult, while her parents were unsure that culinary school was the right first move.

Instead, she enrolled in a business programme in Cape Town.

A part-time job as a hostess at a fine-dining restaurant soon changed her plans. Watching the kitchen and interacting with chefs deepened her curiosity about food until she decided she wanted to cook professionally.

She found a culinary school offering a three-year programme, but was told she would have to wait until the following year to apply. Then her work at the restaurant provided an unexpected opening.

Its chef, Luke Dale Roberts, a prominent figure in South Africa’s culinary scene, wrote her a recommendation letter, helping her secure admission.

‘I chose the three-year programme and only told my parents about it after admission,’ she says.

Paying for the course meant saving the money she earned from her part-time job while covering her living expenses in South Africa.

How pastry found her

That transformation began in 2020 when Bhavana started an apprenticeship at Salsify at the Roundhouse in Cape Town under chef Ryan Cole.

She initially worked on savoury dishes. Then one day, when the person responsible for pastry was unavailable, Cole asked her to take over.

‘I basically got thrown into the deep end,’ she says.

The experience forced her to confront the area she had struggled with at culinary school. With guidance from Cole and chef Nina, she began to understand the foundations, concepts and techniques behind pastry rather than simply following recipes.

Her work also brought her into contact with unfamiliar varieties of fruits and vegetables from a farm supplying the restaurant. Seeing produce she had never encountered before deepened her interest in farming and where food comes from.

A farmer noticed her curiosity and recommended a book by chef Dan Barber, whose thinking about food, farming and sustainability broadened her understanding of the relationship between the kitchen and the farm.

Meanwhile, the demands of professional kitchens were becoming clear. Bhavana was working up to 90 hours a week when Cole offered her a leadership opportunity at a new project, Cabo Beach Club.

She became its pastry sous chef, leading a team and gaining experience in weddings, banquets and other large-scale events.

After three years away from Kenya, however, she wanted to return home. She resigned and came back intending to explore private cooking and farming. Instead, an unexpected email changed the direction of her career.

The Blue Hill breakthrough

The message came from the head chef at Blue Hill at Stone Barns, the New York restaurant founded around chef Dan Barber’s farm-to-table philosophy.

The timing stunned her. She had recently read Barber’s book, which had transformed how she thought about food, and had updated her LinkedIn profile and circulated her CV.

‘This opportunity would have me working with Chef Dan Barber,’ she says. ‘I’d just read his book and it had transformed my thinking.’

After an online interview and a visa process, Bhavana moved to New York. In July 2022, she joined Blue Hill as pastry sous chef. The restaurant sits on about 80 acres of a non-profit farm, giving her the opportunity to work directly with farmers and ingredients.

‘I wasn’t just cooking in the kitchen, I was also picking ingredients on the farm and talking to the farmers,’ she says.

Chef Bhavana Rao, who worked closely with farmers to develop dishes, holds up seasonal produce from the farm at Blue Hill at Stone Barns.

Pool

Four years at Blue Hill also gave her opportunities to develop her creativity. One of her most memorable assignments was a wedding for a bride with Indian roots who wanted her heritage reflected in the desserts. Bhavana turned to her own family for inspiration, calling her mother for recipes from her grandmother.

‘I was calling my mum, asking her to pull out my grandmother’s recipe for desserts we would make when I was seven years old,’ she recalls.

The result was a carrot halwa doughnut, one of the creations she is most proud of.

After four years at Blue Hill, she wanted something simpler and more personal. In early 2026, she and her partner moved to Marseille, France where they worked at Tuba Club, a seaside restaurant supplied by fishermen bringing their catch directly from the Mediterranean.

She also used the trip to explore restaurants and pastries she had bookmarked since culinary school.

Now back in Kenya, she spends her weeks exploring restaurants, talking to chefs and bakers, developing recipes.

What the journey has cost

The achievement has come with sacrifices, including years spent away from family.

‘Cooking is not a job, it’s a lifestyle,’ she says. ‘I’ve had to give up every Christmas in the last seven years, all the festivals, holidays, and birthdays. I even missed my niece’s birth.’

The demands of professional kitchens have also taken a physical toll. After several episodes of burnout and developing stomach ulcers, she has learnt that longevity in the industry requires looking after herself.

‘A professional kitchen is a high-stress environment, but to keep doing what you love, it’s important to protect your body first,’ she says. ‘And sometimes, it’s as simple as taking a deep breath and drinking some water.’

For Bhavana, California is another step rather than the destination. Her long-term ambition is to keep learning, collaborate with people who share her passion and eventually bring that knowledge back to Kenya.

‘Kenya is not lacking in any means,’ she says. ‘We have everything we truly need, including the golden hands of our farmers. The bigger mission is to provide answers to the problems we have through my knowledge and skills.’

The lessons she has picked up along the way now shape the advice she gives.

‘Take up space, don’t accept any disrespect, speak up for yourself and ask for more,’ she says. ‘And don’t be shy about taking credit for something you’ve done or created.’

How irrigation project landed contractor in Sh1.3bn tax fight

A government irrigation project in Tana River County has become central to a Sh1.38 billion tax battle between a contractor- Jilk Construction Company and the Kenya Revenue Authority (KRA).

At the centre of the dispute is the Bura Irrigation and Settlement Scheme Rehabilitation Project, a government contract that Jilk took over from Afrikon Limited.

Afrikon had been awarded the contract in June 2019 for sheet piling and associated works but could not complete the contract, leading to its assignment to Jilk.

The project accounted for Sh649.6 million of the wider dispute pitting Jilk against KRA, with the company arguing that the project was zero-rated when it took over the contract and that the client – National Irrigation Authority -had wrongly withheld VAT.

The case followed a KRA audit covering Jilk’s corporation tax from January 2019 to December 2023 and PAYE, VAT and withholding tax from June 2020 to December 2024. KRA issued an audit notice on February 20, 2025, followed by a pre-assessment notice and assessment dated July 4, 2025.

The demand comprised Sh948.6 million in principal taxes, Sh47.4 million in penalties and Sh385.9 million in interest.

Jilk lodged a manual notice of objection in August 2025 and KRA partially allowed its objection before the company appealed to the Tribunal.

Jilk said it had taken over a contract originally awarded to Afrikon by the National Irrigation Board with preferential tax treatment.

The Tribunal heard that it took over the development project from Afrikon Company Ltd through a Deed of Assignment dated August 27, 2021. It maintained that the project was zero-rated for VAT at the time of the assignment, relying on the tax treatment that applied to the project under the VAT (Exemption) Order, 2018.

Jilk argued that the National Irrigation Authority, which had taken over the functions of the National Irrigation Board, wrongly withheld VAT on payments for the project, creating what it described as an artificial VAT liability of Sh649.6 million.

The company said it had already declared the output VAT in the relevant periods when it issued its invoices, while some of the VAT withheld by the authority related to supplies from earlier years, creating timing differences that KRA failed to reconcile.

However, the Tribunal found that Jilk did not provide the invoices linking the disputed supplies to the withholding-VAT certificates, nor evidence of the specific gazetted tax exemption applicable to the Bura project.

It also did not show that it had asked the National Irrigation Authority or KRA to cancel or amend the certificates it claimed were wrongly issued.

The Tribunal further noted that Jilk had claimed and benefited from the withholding-VAT credits arising from those certificates, which it found inconsistent with the company’s claim that the withholdings were erroneous.

‘The respondent failed to consider material evidence including invoices and interim payment certificates, payroll records and muster rolls for casual site workers, and contracts and the Deed of Assignment confirming zero-rated supplies, rendering the objection decision procedurally unfair and legally defective,’ argued the contractor.

KRA rejected the explanation, saying Jilk had failed to provide invoices linking the disputed transactions to the withholding-VAT certificates.

In addition, KRA said Jilk had not produced evidence showing that the Bura supplies qualified for the claimed tax treatment.

The Tribunal agreed with KRA and said a taxpayer claiming preferential treatment must prove that the supplies qualify under the law and connect transactions to disputed certificates. It found that the tax assessment was not excessive or erroneous.

Jilk failed to overturn the Sh1.38 billion demand after the Tribunal found that key explanations about the irrigation project, VAT certificates, customer invoices and labour payments were not supported by the required documents.

The Tribunal held that KRA’s assessment retained its presumption of correctness because Jilk had not produced competent and relevant evidence sufficient to displace it.

It found that Jilk had not produced supporting invoices or demonstrated a link between the invoices and withholding-VAT certificates.

‘The appellant provided a copy of the contract and the Deed of Assignment, but did not submit the supporting invoices or demonstrate a linkage between the invoiced transactions and the Withholding VAT certificates,’ said the Tribunal dismissing the appeal.

It also found that Jilk had not produced the relevant gazetted tax exemption order or evidence that it had asked the National Irrigation Authority or KRA to cancel or amend the certificates. The Tribunal noted that Jilk had claimed and benefited from the withholding-VAT credits generated by the certificates.

‘A taxpayer cannot approbate and reprobate,’ the Tribunal said, holding that Jilk could not benefit from the credits while disowning the sales that generated them.

For corporation tax, KRA initially identified a Sh979 million variance between Jilk’s declared sales and purchases claimed by customers. Jilk said much of it resulted from duplicate or erroneous customer claims.

KRA accepted evidence supporting more than 91 percent of the variance. It allowed Sh50 million linked to duplicated Kenya Breweries claims, Sh841 million in duplicated or overclaimed Kenya Ports Authority invoices, and Sh128,296 involving an Export Processing Zone invoice.

But Sh87.6 million remained. KRA said Jilk had not provided confirmation from KPA showing that the underlying invoices had been wrongly claimed.

The Tribunal upheld that position because Jilk did not produce invoices, payment schedules, later billing records, ledger extracts or KPA correspondence supporting its explanation.

Jilk also challenged a Sh35.4 million disallowance for subcontractor fees. The Tribunal made an important distinction.

It said failure to deduct withholding tax, by itself, was not a lawful reason to disallow an otherwise deductible business expense. The remedy was recovery of the unremitted tax, penalties and interest.

‘Had the matter rested there, the appellant’s complaint would have carried force,’ the Tribunal said.

But Jilk had not provided its general ledger or proof of payment. The Tribunal therefore upheld the disallowance because the company failed to prove that the expenditure was incurred.

The PAYE dispute concerned differences between wages claimed as expenses and amounts declared in PAYE returns between 2020 and 2023.

Jilk said the differences represented casual workers whose wages were below the PAYE threshold. It provided schedules showing workers and amounts paid but did not provide the payment evidence KRA requested.

The Tribunal said Jilk had supplied sign-out schedules for only one week of the four-year audit period. It also did not place muster rolls, transfer records or mobile-money and bank confirmations before the Tribunal.

KRA corrected computational errors during the objection process, reducing PAYE principal tax from Sh235 million to Sh228.5 million. The Tribunal found no basis for a further reduction.

Jilk argued that KRA failed to give reasons for its objection decision, but the Tribunal found that KRA had addressed each objection and explained why items were allowed or rejected.

On Jilk’s decision to invoke the constitutional right to fair administrative action, the Tribunal said it could not determine whether KRA had violated Article 47 because constitutional interpretation and judicial review belong to the High Court.

Kiambu set for tallest building outside Nairobi

Kiambu County could have the tallest building outside Nairobi after Tatu City proposed two high-rise towers, the taller rising to 30 floors, in Ruiru, opening up a race to the skies beyond the capital.

The mixed-use high-rise development will be built on 9,518 square metres of land at Tatu Central’s CBD in Ruiru, Kiambu County, at an estimated cost of Sh7.09 billion, according to regulatory disclosures.

Dubbed Jabali Towers, the taller tower will rise to a height of 136.8 metres with 30 floors, while the shorter one will be 99.1 metres high with 20 floors.

‘The proposed Jabali Towers will feature two high-rise residential towers, one with 20 floors and the other with 30 floors,’ said the disclosures dated February 2026.

‘The project site is located within Tatu City, approximately at Latitude 1.0901 and Longitude 36.5419 at Tatu Central, within the Central Business District (CBD) of Tatu City in Ruiru, Kiambu County,’ the report adds.

If completed, this will be the tallest building outside Nairobi City. The country’s tallest building by height is Britam Tower, located in Upper Hill, Nairobi, with 31 floors. Chinese-owned GTC Office Tower is the second tallest, at 184 metres, but has the highest floor count at 43.

Other skyscrapers in Nairobi include UAP Old Mutual Tower, which rises 163 metres across 33 floors; 88 Nairobi, standing at 150 metres with 47 floors; GTC Hotel Tower, which is 143 metres high with 35 floors; Times Tower, at 140 metres and 38 floors; and Prism Tower, which rises 133 metres across 34 floors.

The race to the skies in Nairobi has been driven partly by the scarcity and rising cost of land in the capital, pushing developers to build upwards to maximise the value of prime urban plots.

Kiambu County, part of the Nairobi Metropolitan Area, has benefited from the spillover of investment from the capital, as farmland is increasingly converted into real estate.

Tatu City sits on more than 5,000 acres of land that was formerly occupied by coffee farms off Thika Road.

The acquisition of the land to turn it into Tatu City, a master-planned mixed-use development, was inspired by the Kibaki administration’s Vision 2030 infrastructure drive and the construction of the Thika Superhighway.

But as investors have flocked into the city, the developers are increasingly looking upwards, with the Jabali Towers project reflecting Tatu City’s push for compact, high-density development.

‘The project is consistent with Tatu City’s masterplan, which emphasises sustainable land use and compact development,’ said Tatu City.

Jabali Towers will be largely residential, with studios and one-, two- and three-bedroom apartments, alongside amenities including a fitness centre, infinity pool, landscaped gardens, wellness facilities, co-working spaces and public plazas, as well as shops and restaurants.

The project comes as Tatu City has attracted more than 100 businesses and over 7,000 residents, with development in the 5,000-acre mixed-use Special Economic Zone now valued at more than $3.5 billion.

The race to the skies stalled at some point after plans for The Pinnacle in Upper Hill stalled.

The Sh20 billion mixed-use project was designed around a 67-storey, 320-metre tower that would have been Africa’s tallest building, alongside a second 45-storey tower housing a Hilton hotel, residential units and other commercial space.

But the race upwards is also facing resistance in parts of Nairobi, where residents in areas such as Kileleshwa, Kilimani, Lavington and Westlands have challenged high-rise developments over zoning, congestion and pressure on neighbourhood infrastructure-a debate that could increasingly follow the rapid vertical growth of Kiambu.

KQ, Jambojet lose Sh976m in 2-day airport workers strike

‘Over the three days, the airline cancelled 63 flights and experienced more than 160 flight delays, with average delays exceeding six hours,’ said KQ board chairman Kiprono Kittony.

Its subsidiary, Jambojet, which is the leading domestic air operator, told Business Daily that it lost roughly Sh70 million after cancelling at least 60 flights on Sunday and Monday alone, when the strike was full blown.

‘With high demand in August, most flights were full with about 90 to 97 percent load factor. This is close to 5,000 passengers,’ Jambojet CEO Karanja Ndegwa told Business Daily.

KQ controls about 48 percent of international passenger traffic in Kenya, while Jambojet controls roughly 60 percent of the domestic air travel market. Their losses represent a significant impact on the market.

Other carriers, both local and international, also reported significant disruptions to their operations, as they struggled to clear the backlog of delayed and suspended flights on Saturday, Sunday, and Monday.

Renegade Air, which operates flights to Wajir, Kisumu, and Homa Bay out of Wilson Airport, also said its operations were brought to a standstill due to the industrial action, costing it millions in revenue loss.

‘We are yet to quantify the revenue loss, but I know it’s a lot. It definitely impacted our connecting customers who were relying on us to get them to Nairobi for connecting international flights,’ said Patrick Oketch, Renegade Air’s commercial director.

The impact went beyond airlines. Fresh produce exporters said they lost $3 million (Sh388.2 million) for each day of the strike, as storage service providers charged up to Sh25 per kilogramme for storage.

Experts have warned that the impact of the strike might go beyond the quantifiable revenue loss, into reputational damage for Kenya as a tourist destination and transit hub, and for Kenya Airways, the country’s flag carrier.

‘The long term impact will be felt for a long time. Kenya Airways already has a bad reputation for reliability among African business travellers and this nightmare will unfortunately encourage most to continue booking away from them,’ argued Sean Mendis, an aviation commentator.

The Kenya Aviation Workers Union (Kawu) had cited unresolved labour issues for the two-day strike, including a stalled collective bargaining agreement (CBA), disputes over union agency fees, and its recognition dispute with Jambojet. The union also raised concerns over workers’ welfare and employment conditions.

The strike affected JKIA and Wilson Airport in Nairobi, Moi International Airport in Mombasa, Eldoret International Airport and Kisumu International Airport. The disruption was particularly severe at JKIA, which serves as Kenya’s main international aviation hub.

Arthur Oginga on the firm’s pricing issue, fraud challenge and plan to dispose real estate stocks

Old Mutual Holdings recently disclosed that it had decided to deliberately let go of some business from its books that was poorly performing, bringing to focus the issue of price undercutting in the insurance industry.

Business Daily spoke to Arthur Oginga, the group’s chief executive officer, on the pricing issue in the company, the challenge of fraud and the progress in the company’s plan to dispose of real estate holdings.

One of the problems associated with the insurance business is price undercutting – from where you sit, how big a challenge is it, and what is the way forward for the industry to address it?

However, when it is done at the expense of service and customer trust, it is a problem. Our industry is built around a promise – a promise to indemnify a customer in the event of a loss event. That is about trust, and when we are unable to maintain trust through service delays and/or delays in fulfilling our promise, then we have a problem which impacts the industry.

Our challenge is that we are a highly fragmented industry with low product differentiation, so price ends up being the only competitive lever.

The industry should pass on efficiency gains where that is real but refrain from pricing that leads to erosion of the very foundation on which we are dependent. An appropriate sharing of value is what ensures long-term sustainability.

What was the key driver to Old Mutual turning around to post profits in its core business of underwriting?

Yes, our underwriting margin rose from a negative position in the last three years to 2.8 percent as of June, and one of the factors in turning profitable was pricing.

We have now priced our portfolio properly after looking at it on a case-by-case basis. At the end of the day, some people said we were too expensive and went to get services elsewhere, resulting in our top line remaining flat, but we accepted those decisions because we were losing money on some of those accounts. So pricing remediation is important.

There was supplier rationalisation as well. For example, we are now talking to pharmaceutical companies about the cost of drugs, particularly for chronic disease patients. We’ve also introduced pharmacy first, so rather than go to a hospital, go to a pharmacy first, and that’s picking up.

How has AI impacted your business?

We can say AI is now really embedded in our medical business, and it is very important to us in managing fraud and waste. We are processing claims faster as a result of AI. We are identifying exceptions quicker and then reviewing them for fraud.

Enhanced fraud detection helps protect both customers and shareholders across the group. AI is also improving how we understand customer needs, personalising engagement, and providing actionable insights to our teams.

We have six AI use cases now operating at scale, and have delivered just under Sh400 million in value this year. So AI is no longer an experiment; it’s becoming a core capability that improves customer outcomes, operational efficiency, and business performance.

There was word of staff restructuring. Was this the case?

I don’t know who said that, and I keep hearing that story, but we have not had any restructuring and are not planning for one.

You have become one of the first insurance companies to disclose the statistics on fraud in your business – what advised you to publish your fraud numbers?

Some people have misunderstood what we are doing when we are publishing our statistics around fraud. Within the insurance industry, fraud is a threat, and we want to be more transparent about what we are doing to combat fraud, because fraud costs not only shareholders but also customers in premiums.

So we are continuing to improve our fraud risk management and deliver stronger results. In the first half of this year, confirmed fraud losses dropped 69 percent, external fraud losses declined 90 percent, and we prevented over 60 million in attempted fraud. So these outcomes are reflecting our sustained investment in controls, governance, and awareness, while we continue to focus on insider risk and the overall control environment.

We hope that even other players will start disclosing their figures, then we can all join hands in an honest conversation to fight this threat.

You have been in the market selling some of your properties – what is the progress?

We are in good discussions with potential buyers of the tower. As you may know, with these kinds of transactions, until it is signed, you can’t bank it.

We have some offers that we are reviewing as well on some of the other properties that we are selling, like in Uganda. We will see a lot of progress in the coming months, and hopefully we should close by mid next year.

You have communicated of closing business in South Sudan. How soon do you see yourselves disposing of property in the young nation?

South Sudan is a difficult market, so obviously we do not see this happening soon enough. The reasons why we are exiting South Sudan are clear to everyone, so we have many other investors who are thinking the same way.

So circumstances are very difficult to find buyers for properties, especially given the size of our building in South Sudan. So that might be something that we will hold on to a lot longer, but the building is intact.

We’ve got a property manager running it now, so even after we exit, we will have a few staff there past December whose job mainly will be around the property and the liquidation of the company.

You injected Sh1.2 billion in Faulu Microfinance Bank earlier this year at a time when the micro-financing space has been invaded by banks and digital lenders. Can microfinance compete with banks and digital lenders?

Faulu just completed the implementation of a new core banking system, and together with a digital platform, that should make Faulu more competitive in the digital lending landscape.

The capital injection was to support the turnaround actions and the core banking system implementation so that Faulu, which has predominantly been lending to county staff, will lend to government staff while becoming a digital lender focusing on growth.

Kenyans travel is changing medical insurance choices

If you spend any time on TikTok, Instagram or any of the other social media platforms-and chances are you do-you’ve probably noticed a growing trend.

Young Kenyans are planning and taking international trips simply because they can, and because travel has become far more accessible than it once was.

There is a young woman documenting her solo bus journey from Kenya to Ethiopia to prove it’s possible. Another couple is exploring Africa by motorcycle. One adventurer has driven a Land Rover Defender all the way to the United Kingdom, while a Kenyan journalist seems to spend as much time in the air as he does ‘on air’.

These stories reflect a broader shift in priorities, where young professionals no longer hold wealth accumulation as their only aspiration.

Many are increasingly choosing to invest their disposable income in experiences. The rise of remote and hybrid work since the pandemic has made this even easier.

At the same time, multinational companies continue to expand across borders, giving employees opportunities to travel and relocate more frequently than previous generations ever imagined.

This changing lifestyle presents an important challenge for service providers, particularly in healthcare and insurance. As more people live, work and travel internationally, they naturally expect their medical cover to move with them. After all, healthcare needs do not stop at immigration.

Meeting these expectations requires a different approach to health insurance and that is where International Private Medical Insurance (IPMI) comes in. Unlike traditional health insurance, IPMI is designed to provide continuity of healthcare across borders, giving internationally mobile individuals access to medical treatment wherever life or work may take them.

Historically, these solutions were often arranged through offshore insurance structures that offered limited visibility to local customers.

Today, however, expectations have changed and clients want the confidence that their international medical cover is supported within Kenya’s insurance regulatory framework. That reassurance becomes particularly important when claims arise, as dealing with familiar, locally regulated institutions provides an added layer of confidence and accountability.

Meeting those expectations requires far more than simply offering an international insurance product. Structuring compliant international medical solutions is as much about relationships as it is about regulation.

It requires trusted partnerships with leading global insurers, a deep understanding of the international insurance landscape and the expertise to integrate world-class healthcare access into insurance arrangements that fully comply with local regulatory requirements.

In practice, this means ensuring that every solution is supported by appropriately licensed insurers and authorised market participants. It means helping clients understand how their IPMI benefits fit within the local statutory healthcare framework.

It also means designing programmes for multinational employers and internationally mobile professionals whose healthcare needs may span several countries.

At the same time, these solutions must comply with privacy, consent and data governance requirements for managing sensitive medical information across jurisdictions.

These considerations are often invisible to clients until they begin exploring international health cover for themselves. Many discover only then that a globally recognised insurance brand and a locally compliant insurance solution are not always the same thing.

The real value lies in bringing both together by combining international standards of healthcare access with the confidence that comes from operating within Kenya’s regulatory environment.

The more people understand how these solutions work, and how they fit within the country’s insurance framework, the better equipped they will be to choose healthcare cover that truly travels with them.

Ruto consolidated cargo fee directive throws KRA into a spin

A directive by President William Ruto for the minimum customs charge for containerised consolidated cargo to be lowered back to the old cap of Sh2 million has triggered a fresh challenge for the Kenya Revenue Authority (KRA), which is already under pressure to improve collections and streamline customs administration.

The President on Wednesday ordered the reduction of the customs benchmark from Sh3.2 million to Sh2 million, pushing it even lower than the Sh2.5 million that had been in place over the last six years before the KRA reviewed it upwards, sparking protests by small traders.

Insiders said that the directive is expected to pile pressure on KRA because customs collections are a key driver of domestic revenue performance.

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‘The directive caught us off-guard, and there will be a lot of reviews to correct the mess from the development. The new rates had already been factored into collection projections, and placing the rates back to levels of more than six years ago will certainly cause setbacks,’ an insider at KRA told Business Daily.

‘Customs is a key mover for our overall numbers, and any variations on such rates reflect on the bigger picture,’ the source added.

Data shows that in 2025/26, customs generated Sh988.8 billion, marking a 12.4 percent growth compared to the previous year and exceeding its target by Sh7.99 billion. In 2024/25, the tax head collected Sh879.33 billion, an equivalent of 11.1 percent growth compared to the previous year and exceeding its target by Sh48.96 billion.

KRA has attributed the strong performance of customs to a shift where it opted to charge consolidated cargo per transaction effective March 1, 2023, rather than Sh200 per kilogramme, which had previously been in place.

Sources revealed to Business Daily that the KRA Customs team were on Thursday locked in meetings to review the impact of the Presidential directive amid pressure by traders to implement the lower Sh2million benchmark.

The President’s directive came barely days after KRA defended the Sh3.2 million customs benchmark valuation, saying it factored in emerging issues in the cost of freight, foreign exchange, insurance and the regional taxation landscape.

‘We have had this benchmark revised over the years, and the number is arrived at based on analysis, trends, and looking at the different categories of items that are commonly imported by consolidators. The last time that we reviewed these numbers was in 2023, with Sh2.5 million being the number assigned to a 40-foot container,’ KRA’s Customs Commissioner, Lillian Nyawanda, said on August 27, 2026, ahead of protests by traders.

‘This number could vary depending on the content of the container. Between 2023 and 2026, so much has happened in the tax landscape, including changes in the exchange rate, freight cost, insurance cost, and at the regional level we have had stays of application. The Sh3.2 million is a number arrived at based on this analysis.’

The KRA’s customs decisions are guided by the Fourth Schedule of the East African Community Customs Management Act, which provides methods used for cargo valuation.

These methods include the Transaction Value approach where the customs value assigned is pegged on the price actually paid for the goods imported; the Deductible Value approach where the customs value assigned is pegged on identical or similar goods imported into a partner state and the Computed Value approach where the customs value assigned to imports is pegged on the cost of materials, fabrication and processing used in the production of the imported goods.

Sh500m KU children’s hospital project lies unfinished a decade later

A Sh500 million project to build a dedicated children’s hospital at the Kenyatta University Teaching, Referral, and Research Hospital (Kutrrh) has stalled at the foundation stage for a decade, leaving the facility incomplete nearly seven years after its planned completion date.

Kenyatta University records list July 2014 as the project’s start date, with completion originally expected in December 2019.

‘Further correspondence between the hospital and the university revealed an additional allocation of Sh500 million to start the project by 2015, which was utilised for the construction of site houses, the provision of amenities such as water, the purchase of equipment and building materials, and the construction of the hospital foundation. However, a review of documents and a physical verification in December 2024 revealed that the project stalled in 2016 at the foundation stage,’ said Auditor General Nancy Gathungu in her latest report the hospital for the year ending June 30, 2025.

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Ms Gathungu also questioned the expenditure, saying value for money for the Sh500 million spent on constructing the children’s hospital could not be confirmed.

According to the audit, Kenyatta University started the project and received the Sh500 million but had not handed it over to Kutrrh. This, the Auditor General said, created challenges for the hospital in securing sufficient funding and implementing the project.

As a result, the project stalled once the initial funding had been spent, and subsequent funding failed to materialise.

Parliament had previously recorded that the children’s hospital was to be financed through annual government allocations of Sh500 million under the management of Kenyatta University.

Read: Sh500m set for Kenyatta varsity children’s hospital

The situation was further complicated by the separation of the hospital and the university, affecting the management of projects initiated by the university.

Parliament has noted that establishing Kutrrh as an independent parastatal organisation created differences in management structures, priorities and budget lines, which affected the implementation of the children’s hospital project.

The children’s hospital was originally conceived as part of Kenyatta University’s plans to develop a medical hub, alongside the university hospital and a proposed women’s hospital.

University records from that time show that the facility was intended to provide 300 beds and support the institution’s expansion of medical training and healthcare services.

The stalled project is located within the Kutrrh complex, which covers 64.53 hectares, 11.57 of which are allocated to the children’s hospital.

Kutrrh was established as a state corporation in 2019, operating as a 650-bed national referral hospital that offers highly specialised healthcare services and is designed to provide referral services, training, and research, as well as helping to ease overcrowding at Kenyatta National Hospital and county hospitals.