Category: Business Daily

A few years ago, I was walking by the poolside at the Muthaiga Country Club to my table, when I spotted my dear friend Bob Munro, (now deceased). He was there with his family and with his friend Michael Hopkins, to whom he introduced me.

Since then, Prof Hopkins and I became close friends as well, but equally sadly he too passed away recently- a few weeks before his eightieth birthday.

For the last few years, Prof Hopkins had been living part of his time in Malindi, part in Nairobi and part in France near the Swiss border, in each location continuing to pursue his passion for corporate social responsibility (CSR), where he had been a pioneer in developing sustainable frameworks.

He authored numerous books on the subject, including periodic updates, and he was also a visiting professor at many universities, including Management University Africa here in Nairobi.

He also published a series of blogs, condemning the awfulness of Brexit, which he later collected into a book called Brrrexit!.

Prof Hopkins was greatly in demand for interacting with students on the highly topical subject of sustainability, as well as with corporates around Europe, in India, Mauritius and elsewhere. He was also in demand with me, as he became my guide on CSR and sustainability, plus the closely related ESG issues – on Environment, Social and Governance.

I particularly admired him for his ‘systems thinking’, urging those with whom he interacted to integrate their ESG strategies with their overall ones. And another point he liked to make was not to confine CSR activity to the for-profit private sector but also to not-for-profits and to the public sector. Great thoughts! Plus to have sufficient but not excessive regulations for it.

I quoted him in a couple of my articles on such subjects in this column, and we participated in a joint book launch at the Westgate bookshop, he-with his CSR volume, ‘From the Margins to the Mainstream’ and I-with a collection of my articles on ESG.

Prof Hopkins and I linked up in several other related ways. He introduced me to Prof Mike Saks, his UK colleague who also specialised in such fields, and the three of us co-founded the UK-centred International Responsible Leadership organisation, which promotes such kind of leadership around the world.

Prof Hopkins may have been a much-respected academic in his field, but I don’t think I’ve ever come across such a jolly fellow, whose laughter so often filled the room.

He was a joker, not least about himself, and he and I would always have such a happy time together, whether just on the phone or in person.

His jolliness, his very firm values and his areas of interest also led me to introduce him to my Rotary Club of Nairobi, where he would nudge us into building sustainability into our community projects. Not surprisingly, his commonest phrases were to ‘treat others the way you want them to treat you,’ and to ‘treat all key stakeholders responsibly’, very aligned with Rotary thinking.

Prof Hopkins became a very popular member, often staying behind after our weekly lunch meetings to chat further, with a few members. And when he passed away, a great sense of sadness swept over the club.

Just recently Rosemary Wahome, herself in the sustainability business, asked me if I’ve thought about how to honour Prof Hopkins contributions to sustainability, and it immediately occurred to me to propose a sustainability award in his memory to our Rotary Club. Discussions on this are under way.

On November 16 – Prof Hopkins’ 80th birthday – a memorial service was held in Malindi to celebrate his life, with his son William and daughter Eve present.

And following this, his cremated remains were carried out on a boat and sprinkled into the Indian Ocean. Unfortunately I couldn’t be there to eulogise my buddy, but happily I have this opportunity to write about him.

We will continue learning from Prof Hopkins about CSR and sustainability through his writing and remembering what he taught us, and it will keep reminding us of his permanently on-display sense of humour and his jolly laughter.

The battlefields of 2020s and beyond are currency corridors, energy chokepoints and strategic resource chains. The economy is not a parallel theatre; it is the theatre.

The most serious threats to Kenya today do not just wear boots, suicide vests or carry rocket-propelled grenades, cross borders, or announce themselves on intelligence advisories.

They arrive quietly – through markets, cables, grids and pin-stripe suits wielding contracts and commercial agreements we clap for without reading the fine print.

Modern power doesn’t storm the gates; it buys the land around the fortress until the fortress is an island. It builds a moat around the resource, not to protect but to exploit it. We have already been warned by reality, more than once.

When our Eurobond yields shot up and rolled us into an expensive corner, it wasn’t simply a ‘market reaction.’ It was a lesson: sovereignty can be squeezed through interest rates and access to capital. Financial pressure is a form of state pressure.

We negotiated, refinanced, extended, repackaged – but beneath the financial engineering was a truth we didn’t say out loud: our economic flank is exposed, and exposure is a security issue, not just a fiscal one.

It doesn’t help that Kenya is still lurking in the dark corridors of anti-money laundering and counter terrorism financing grey list globally; the implication isn’t just enhanced scrutiny on financial transactions and increased cost of compliance – it is a strainer on inbound capital itself.

A potential reason for capital flight.

Then the lights went out – repeatedly – and not in remote corners of the republic, but at the nerve centres of our economy. Nairobi went dark. Jomo Kenyatta International Airport fell silent, runways dead, terminals lit by backup systems not designed to carry a nation’s reputation.

The grapevine on internet platforms like X (formerly Twitter) about the reasons for such wide-sweeping blackouts has not helped Kenya’s reputation either. No foreign adversary needed to test our airspace; the country demonstrated, unprovoked, how to bring itself to its knees.

Multiple times. It should never take more than one airport blackout for a serious state to update its doctrine on energy as a national security asset. It is an opinion that having Kenya Power Company as the only national utility scale power distributer is a national security concern in itself.

Our mineral story – or more accurately, our mineral habit – is another window into how casually we treat the assets that the world considers strategic. In a century defined by rare earths, lithium, cobalt, niobium and graphite, we still sign mining licences as if they are real estate leases.

Other nations treat those resources as bargaining chips for their future industrial capacity. We treat them as ribbon-cutting opportunities. The difference is philosophical, not administrative.

It is the difference between seeing minerals as revenue and seeing them as leverage. It is now out there, global powers like China and the US showing a keen interest in our rare earth reserves, estimated to be worth about two thirds of our current debt stock, about $62 billion.

Minerals licences are not merely commercial instruments; the world treats them as geopolitical assets. Mrima Hills is certainly atop US Vice President JD Vance’s agenda when he visits. We will concede ground, given the president’s blunder in foreign relations with former Us President Joe Biden. But what will we get in return for the conceded ground? Or perhaps, forgone revenue?

There will be national security consequences to this – but econnomic in nature and may fly over the heads of the current state bureaucrats.

Instead of allowing a non-exploitation concession on the rare earth elemsnts, we could get into a mutually beneficial relationship into building a rare earth refinery – setting us up for major defence, space and global electronics supply chain race.

The economic multiplier around that would be able to inject over $240 billion into the Kenyan gross doemstic product over the next 10-15 years and creating thousands of jobs in the process. That is a strategic national security imperative.

When you look beyond us, the Nord Stream sabotage in Europe didn’t just destroyed two pipelines; it rewired the continent’s entire thinking about energy, alliances and vulnerability.

China’s export controls on rare earths, gallium, germanium and advanced battery technology weren’t mere trade decisions – they were strategic manoeuvres, to remind the world that controlling supply chains can be more decisive than controlling armies. Energy and minerals are now geopolitical instruments. This is not theory. It is the operating system of modern power.

In Kenya, we have structured our national security imagination as if the only legitimate threats are those that can be confronted in uniform. Defence, intelligence and policing remain vital pillars – but power has migrated, and our thinking has not caught the flight. As it stands, we have perfected exceptional talent in mastering structure instead of leverage.

So what would a state that actually intended to keep its future look like?

A serious republic would not design a national security architecture that excludes the custodians of its currency, its energy lifelines and its economic bargaining chips from the core of strategic decision-making. You cannot defend a country’s sovereignty if the stewards of the economy and the stewards of the energy system sit outside the room, where security strategy is defined.

Imagine a small, concentrated office: an advisor who is not ornamental but obligatory, whose job is not to whisper in corridors but to convene the minds that can translate risk into plan, and plan into executed contingency.

Imagine Treasury on the core panel of security decisions because finance is where coercion often begins.

Imagine Energy at the table because when the lights go out, the social contract frays faster than the printed slogans in our press conferences. Imagine a requirement – not a suggestion – that any strategic concession, infrastructure contract, or cross-border asset transfer arrive with a security-impact assessment and a mitigation plan.

You manage risk by naming it, by assigning authority, and by making failure expensive and public. The alternative is improvisation in the teeth of catastrophe, and improvisation is the luxury of those whose options have not yet been exhausted by miscalculation.

A state that confuses the comfort of ceremony, with the rigor of preparedness is a state that will discover its limits in messy, irreversible ways. Put Treasury and Energy into the National Security Council by law. Institutionalise a National Security Advisor to integrate defence, intelligence, finance, energy, cyber and minerals.

This is not bureaucratic cosmetics. It is how sovereign states survive the century. National security is no longer a uniformed domain – it is a whole-of-state discipline. It requires a mind at the centre that integrates defence, intelligence, economic resilience, energy stability, technological sovereignty and resource strategy into a single national posture. Many countries call that role a National Security Advisor.

We treat it as optional decor. A third-rate aide to the president, when this is the individual that ought to consolidate military, civilian, economic and energy intelligence into a presidential daily advisory brief.

The state must stand tall at all times as an organ of resilience. Regimes fail; the state must always endure. There is dignity in admitting that the world has changed, and Kenya must change with it or perish.

As Europeans started getting comfortable living in Kenya in the early 1900s, they gradually established private member clubs, where settlers would gather to enjoy games and to dine as they socialised.

After independence, the clubs shifted from being a whites-only affair, though the elites of the young republic maintained the traditions of their erstwhile colonisers.

Today, as some of the clubs mark a century of existence, there is the burning question of whether they are locking out the youthful populations through their pricing policies and the rules of engagement.

‘There are some clubs where most people are old generation and the young men have not come in,’ says Mr Felix Okatch, one of the directors at the United Kenya Club.

Mr Okatch, who has been a member of one club or another since 1983, says clubs should make it conducive for young people to join as they form the majority of the population.

‘I encourage young men to join, particularly those who have started business,’ Mr Okatch notes.

Private member clubs, which are designed to be a confluence point for the wealthy, exist for various reasons.

‘One benefit is social, where people of a class come together – those who are capable or the top cream,’ says Mr Okatch, who is also an author.

‘Over time, these clubs have developed facilities like golf, squash, cricket, lawn tennis, swimming pool, gym, and many more activities. The clubs also have bars, restaurants, accommodation, and some have apartments.’

The clubs also help businesspeople as they can be used to host crucial meetings.

‘You come with a car, you park, then you secure a deal,’ says Mr Okatch.

Another benefit is that a member of a club in one part of Kenya can travel to another part of the country and enjoy benefits of another club if the two have a reciprocating arrangement.

‘If somebody’s in Eldoret Club, he can go to Nyanza Club, to Nyeri Club, Mombasa Club, Kitale Club, and enjoy like the other [members],’ says Mr Okatch.

The clubs are also known for the strict rules they enforce. There are guidelines on the dress code, conduct within the premises, welcoming guests, among others.

In a number of the clubs, making a phone call in some spaces can earn someone a fine. Some do not permit wearing a cap in some areas while others prohibit donning denim clothing. A collarless T-shirt is hardly allowed in most clubs, as are sandals.

A recently determined court case, pitting lawyer Donald Kipkorir against the Muthaiga Country Club, revealed how stringent some of the requirements can be. Mr Kipkorir was denied entry at the club in August 2024 on various grounds.

Mr Kipkorir later sued the club, saying the manner in which he had been turned away went against his right to dignity as no sufficient explanation was given.

The court heard that the lawyer visited the premises to meet his clients who are members of the club. However, on that day, he was denied entry. The club argued that it reserved the right of admission, noting that even though its more than 6,500 members are free to invite guests, its by-laws prohibit admission of non-members who are not in reciprocating clubs.

The club said an earlier incident in October 2022, where the lawyer was also denied entry but later allowed in, informed their decision.

Mr Kipkorir said he was treated ‘like a stray dog, a homeless hound that had trespassed on the hallowed grounds of the privileged elite’. A Nairobi court agreed with the lawyer’s arguments and awarded him Sh1 million in damages.

With strictly enforced laws and an old guard not willing to depart from the traditional way of doing things, younger Kenyans in the private clubs ecosystem have sometimes been dismissed as lowering the standards. A former chairman of a private club who spoke with Nation Lifestyle held this view, though he did not wish to share his remarks on record.

We spoke to Jessy Ndegwa, the chairman of the Ruiru Sports Club, and asked him: ‘Is your club doing enough to attract younger members?’

He was candid enough to admit that there are no products targeting youth of 35 and below.

‘However, this being a family-oriented club, we have conversions from junior members to single members. And we have a lot of those. When you have a family [package], the club allows your children to transition to single membership after 25 years. So, what we have, we don’t let go of. We encourage them to graduate and take responsibility for their own membership,’ he says.

Graduating junior members to the senior category after the age of 25 is a common phenomenon in private member clubs across the country. The Wadi Degla clubs-Kenya, a recent entrant in the space, also considers 25 as the age when junior membership ends.

‘They will only pay a subscription [upon converting to single members]. They will not pay entry fees,’ says Mr Ndegwa.

To obtain family membership at the Ruiru club, one needs to pay Sh600,000. To become an individual member, on the other hand, one needs to pay Sh450,000. On top of the membership fee, a member of Ruiru Sports Club should pay an annual subscription fee of Sh24,000 for the family package and Sh16,000 for the individual package.

That isn’t too far from what other clubs charge. As per the last published rates online, the Royal Nairobi Golf Club that has been in existence since 1906 charges a joining fee of Sh595,000 and an annual subscription of Sh61,460.

The Parklands Sports Club, which will be 120 years old next year, charges a full member admission fee of Sh775,000.

The United Kenya Club, on the other hand, charges Sh150,000 to admit a member living in the city, with a Sh20,000 annual subscription required.

Asked whether the fees are too high to discourage younger Kenyans, Mr Ndegwa says: ‘True and not true.’

He notes that besides the option of juniors graduating to full members after their 25th birthdays, there are occasional membership discounts that prospective signees can grab.

‘Sometimes we have [recruitment] drives. So, for those who want to join and they do not have resources right now, I encourage them to keep looking out for when we have drives. And during drives, sometimes we give up to 50 percent of the classes that we present to potential members,’ he says.

A top contributor to younger Kenyans joining private clubs is the fact that some corporates have been buying membership for some of their staff.

Mr Okatch, who is a marketer by profession, joined his first club because his employer paid for it.

‘The aim then was for me to meet people who matter in business circles. In the club, there was encouragement for me to play golf as my children were busy enjoying swimming and other things,’ he says.

The United Kenya Club, where he is a director, has a package for corporate membership where a company can pay Sh650,000 to admit up to five employees. This is followed by an annual subscription of Sh100,000 for the members.

The thinking behind some employers getting their staff in such clubs, he says, is to give them access to potential clients.

‘It’s not to sell your product, but to meet the who-is-who. It opens ways for you to get into the marketing field,’ argues Mr Okatch. ‘Corporate organisations can pay for their members up to Sh1 million.because you meet those who matter.’

Dr Mike Iravo, a specialist in human resources management and a lecturer at the Jomo Kenyatta University of Agriculture and Technology, says there are many benefits that an employer gets from buying club membership for an employee.

He adds that such an arrangement can improve “productivity, motivation, among many other things that an individual employee would benefit [from]’.

Asked what portion among the 2,800 members of Ruiru Sports Club were brought in by corporates, Mr Ndegwa says there is less than five percent. He attributes this to the fact that Ruiru has not been widely known.

‘Ruiru, until recently, was not known in the circles of clubs. The clubs that were known were Muthaiga, Karen, Limuru, and Sigona,’ he says, noting that the club – which sits on 235 acres of land – is currently on a rapid expansion drive, driven by a 45-year masterplan.

The benefit a corporate gets by buying club membership for staff, Mr Ndegwa says, is that it gets ready buyers.

‘Being a member, knowing that you are going to interact with these people day in, day out, every other week, gives you an opportunity for people whom you would not have spoken to if you met in the streets just like that. But in the evening here, if you join a table, you join as a member and it is very easy to start a conversation. And they already trust you and you already trust each other,’ says Mr Ndegwa.

The World Bank Group has linked entrenched market dominance and weak competition in sectors such as electricity, telecommunications and fertiliser distribution to stagnating investments and expansion of formal jobs in Kenya.

The multilateral lender said in a report that domination by a few powerful players in the key economic sectors is raising business costs, suppressing investments and constraining expansion of firms that drive formal employment.

The World Bank’s latest Kenya Economic Update unveiled Monday lists Safaricom in telecommunications and Kenya Power in electricity distribution among firms operating under weak competition policies.

Kenya Power, the report states, retains a near-monopoly over electricity distribution and influences tariffs and reliability of energy.

This translates into high prices, limited alternatives, and slow efficiency gains, which curb growth in investments in labour-intensive sectors such as manufacturing.

Manufacturers- who have one of the biggest potential to generate large volumes of formal jobs- have over the years partly blamed high cost of electricity as a barrier to scaling operations.

Safaricom’s tight grip on mobile money and data services, the World Bank’s report suggests, has shaped pricing and market access in ways that smaller digital players struggle to overcome.

The lender says that Safaricom’s mobile broadband prices for monthly bundles, for example, are higher than those of its competitors in Kenya and in key regional markets such as Ghana, Nigeria, Rwanda and Zambia.

These distortions, the report goes on, are feeding directly into Kenya’s shrinking share of formal jobs.

‘Kenya has the foundations of a strong economy but unlocking its full potential requires reducing distortions, further opening markets and ensuring that policy frameworks are transparent, predictable and grounded in evidence,’ World Bank Country Director Qimiao Fan said during the launch of the Kenya Economic Update.

Citing data from the Kenya National Bureau of Statistics, the report shows that despite Kenya creating 782,000 jobs in 2024, nearly nine of 10 jobs created were informal. The share of Kenya’s formal employment has fallen from 18.5 percent in 2010 to 15.5 percent in 2024, a trend the bank attributes partly to weak competition that raises input costs and limits firm growth.

The report identifies Kenya as having the most restrictive product market regulations among all countries with available global data, with an overall Product Market Regulation (PMR) score of 2.92.

This poor scoring – driven by firms operating behind protective barriers rather than earning market share through efficiency, innovation, or better products – has stifled private investment, limited new entries, and slowed formal job creation.

The result is an economy where the informal sector – characterised by low-productivity activities with limited earnings, security and prospects for growth – dominates job creation.

‘When you have competition, prices go down and Kenyans can buy more for their money. And that means more demand for goods and services which means more jobs within the economy,’ World Bank economist for finance competitiveness and investments Ryan Kuo said.

Mr Kuo added that competition also improves productivity, enabling firms to generate more value per worker and pay higher wages.

‘When competition is fair and vigorous, it means firms are always trying to improve their productivity. The net effect is that average wages go up,’ he said.

Kenya, the economist said, has unusually high gross operating surpluses – higher than in competitive advanced economies – indicating that dominant firms in Kenya could be charging above-cost prices due to low competitive pressure.

The report cites the State-funded fertiliser subsidy programme – which relies on a narrow distribution chain controlled by leading suppliers Yara and ETG – has created geographic distortions, reduced availability of high-demand blends and locked out many private players.

The weak competition in the subsidised input market, the World Bank says, has suppressed agricultural productivity, thereby slowing growth in formal jobs in agri-processing, logistics and retail sectors.

Kenya’s transport sector, on the other hand, suffers from opaque licensing, regulatory fragmentation and barriers to market entry, raising logistics costs which hurt margins for manufacturers and exporters.

Albert Mwenda, the director-general for budget, fiscal and economic affairs at the Treasury, said that Kenya’s dominant micro and small-sized enterprises have made it difficult to enforce competition policies because they ‘fear formalisation’ and prefer to operate outside structures where competition policy can reach them.

‘Competition works well if there are more people working in the formal economy. Competition policy will be effectively implemented if we have more people working in the formal economy,’ Mr Mwenda said. ‘We have a challenge especially in the informal sector – the MSMEs – where the experience we have seen, through the credit guaranteed scheme, is that there is a fear of formalising operations.’

Competition Authority of Kenya (CAK) director-general David Kemei said in a speech that the agency was widening its focus beyond enforcement to advocacy in collaboration with other regulators.

‘Pro-competitive reforms have the power to unlock growth by removing unnecessary barriers and improving market access,’ Mr Kemei said in a speech read by CAK’s director for competition and consumer protection, Amenya Omari.

‘Businesses already have enough hurdles to jump towards success, so we collectively have a duty to reduce legal and policy issues that increase chances of failure rather than success.’

Betty Maina, the East Africa director at Genesis Analytics and a former Trade Cabinet Secretary, cited a lack of a strong consumer constituency to counterbalance large firms, represented by powerful industry groups such Kenya Association of Manufacturers (KAM) and Kenya Private Sector Alliance (Kepsa) as a challenge in enforcing competition policies.

‘Without a strong consumer body, it is difficult to manage those conversations on competition when they confront strong bodies like the KAM,’ Ms Maina said.

When one steps back and observes the collapse of the Nairobi Bus Rapid Transit (BRT) deal, originally worth Sh7.76 billion and backed by the United States through the Millennium Challenge Corporation (MCC), it becomes painfully clear: President Donald Trump has not only undermined Kenya’s development ambitions but also dealt a heavy blow to the trust between Nairobi and Washington.

The abrupt cancellation of this funding represents more than a policy shift; it is an affront to Kenya’s sovereignty and its people’s aspirations.

The agreement, signed under Trump’s predecessor, was hailed as a milestone in Kenya-US relations.

Through the MCC, the US had pledged to support the development of a modern BRT system for Nairobi, a project envisioned to unclog the city’s notorious traffic, reduce pollution, enhance safety, and provide a more equitable transport option for women, low-income commuters, and marginalized groups.

Kenya had already committed significant resources of its own, demonstrating genuine partnership and ownership of the initiative.

Then came the reversal.

When the Trump administration cancelled the MCC Threshold Program as part of its foreign-aid review, the BRT project was abruptly thrown into uncertainty. Kenya’s Treasury confirmed receiving the termination notice, leaving a carefully negotiated, legally binding project in limbo.

Such a sudden withdrawal is not merely bureaucratic reshuffling; it is a profound injustice.

Why is it unjust? First, because Kenya loses most. Nairobi’s transport crisis is not a theoretical concern; it affects millions of people every day. Congestion drains productivity, worsens air quality, and makes commuting a daily struggle.

The BRT system was not just an infrastructure upgrade; it was a lifeline for a city desperate for modern transit. When the US backed out, it was ordinary Kenyans who paid the price in lost opportunity and prolonged hardship.

Second, the move reflects a troubling lack of commitment. International partnerships depend on predictability. When a change of government in Washington can instantly nullify agreements signed in good faith, developing countries are left exposed.

This unpredictability weakens Kenya’s long-term planning capacity and discourages the kind of transformative projects needed to push the country forward.

Third, it damages US credibility on the world stage. For decades, America positioned itself as a development partner that honors its commitments and supports governance reforms through reliable assistance.

By abandoning the BRT deal, the Trump administration signaled that US development partnerships are conditional not on mutual goals but on domestic political whims. That makes it difficult for Kenya or any country to trust the U.S. with ambitious, multi-year projects.

This is precisely why Kenya and many other nations have increasingly turned to China for infrastructure. It is not because China offers the cheapest or simplest deals, but because it offers certainty.

When China commits to build a road, a railway, a port, or an energy installation, it rarely reverses course due to leadership changes or shifting domestic priorities. Western governments often criticize Beijing’s approach, citing concerns over debt or geopolitical influence, but from the perspective of developing nations, reliability is priceless.

Kenya cannot afford to wait endlessly for partners whose policies shift every four years. It needs roads, energy grids, railways, ports, and modern public transit – and it needs them delivered without sudden cancellations. When the US tears up agreements, China naturally steps in to fill the vacuum. The BRT saga is simply another example of a broader trend: countries gravitate toward consistent partners.

Trump’s decision to halt other USAid contracts in Kenya – affecting sectors such as education, energy, and civic engagement – only strengthens this perception.

Cuts totaling tens of billions of shillings in development commitments weaken vital sectors and leave long-term projects stranded. These abrupt contractions send a clear message: American support is not guaranteed.

Some may argue that every administration has the right to review foreign aid and reallocate funds. That is true. But renegotiation is different from abandonment.

When deals are terminated without meaningful consultation, without transition plans, and without regard for the people affected, it shows disrespect. It suggests that Kenya’s development priorities can be dismissed at the stroke of a pen.

Kenya is not simply a recipient of aid; it is a strategic partner with clear development ambitions. By signing the MCC compact, Nairobi demonstrated faith in long-term cooperation with the US The cancellation of the deal undermines that faith.

The MCC was designed to support countries committed to reform and good governance. Kenya met those conditions. America did not meet its own.

In the broader geopolitical picture, Trump’s actions reveal a failure of US soft power. Development diplomacy is not about rhetoric; it is about delivering real infrastructure and helping partner nations achieve tangible progress. When America falters, others rise to the occasion.

Ultimately, the scrapping of the Sh7.76 billion BRT deal is not only a broken promise – it is an injustice to Kenya’s development agenda and a betrayal of Nairobi’s commuters who deserve better.

It weakens trust, undermines collaboration, and accelerates Kenya’s pivot toward partners who offer more consistent engagement. If the United States wants to remain relevant in Africa, it must learn that reliability, not rhetoric, is the foundation of meaningful partnership.

My last visit to Addis was in 2023. But what I found in my latest visit jolted me. The face of this city has been completely changed lately. A flashback may help to challenge us to be bolder in pushing to improve our urban spaces.

When I first visited this city in 2006, there was not much to admire, save for some scattered high rise buildings. Its growth seemed embryonic, with pockets of mundane rural houses scattered at different places.

There were expansive zones with temporary dwelling units too, you could call them informal, though not as densely populated as in the Kenya sense.

But over a time, I began to notice a rapid increase of high-rise buildings within the city centre and its environs. Construction was continuous. Gradually, the rural zones within the city gave way.

And the informal settlements too. It was like there were clinical interventions to ‘pluck them out’. I am yet to really know where the people affected were taken to. Given that land in Ethiopia belongs to government, moving such people out is never quite a problem. Nothing like we face while trying to move people in our urban areas.

By the end of 2015, the Addis Ababa city light rail system was launched. It took a few years to build, yet traversed heavily developed parts of the city. Those mega compensation issues that would have obstructed construction Kenyan cities in weren’t on the table.

Yet, right now, Nairobi city would do with such a system, and many towns in Kenya should have road constructed bypasses. Slow traffic will continue to constrain urban movement and undermine urban economies if we do not figure out how best to open up transport corridors and provide for rapid and mass movement of urban workers.

What currently strikes visitors to Addis Ababa is the city’s Corridor Development Project, now into its third year of implementation. It has focused on improving urban mobility and quality of life.

This project is transformative and has involved the redesign of streets and public spaces, beautification and the repainting of buildings. It has gradually changed the face of Addis Ababa, lifting it above that of many other African cities that I have toured. It has involved road widening, the construction of walkways, bicycle lanes and comprehensive street lighting.

The project has delivered public seating spaces, street art, recreation areas and beautiful green spaces too. There’s been riverside infrastructure, greening and lighting. All buildings have had to be repainted in uniform white and grey.

Addis Ababa is alive and pleasant. One walks easily, and can find decent comfortable seating spaces. Street lighting works and gives the city a happy and pleasant landscape at night.

The redesign and construction has involved planning, resistance and costs. But it’s been done. Our urban managers have hard lessons to learn from Addis Ababa City Administration.

Pension funds nearly doubled their exposure to alternative investments such as private equity (PE) funds, offshore assets and real estate investment trusts in the year to June 2025, as they sought to diversify their portfolios to bring in high growth assets.

An industry report by the Retirement Benefits Authority (RBA) for the half year ending June, shows that the investment in these assets rose by 91.8 percent to Sh126.6 billion in June 2025, from Sh66.01 billion in June 2024.

Offshore assets account for the largest share of alternative investments for the schemes at Sh84 billion, having grown by 115.2 percent from Sh39.04 billion in June 2024.

The growth was bolstered by the stable shilling against the dollar, which protected the external assets from valuation losses.

PE investments grew by 129.2 percent to Sh20.1 billion, driven by funds seeking high returns, while the value of Reits investments was up 14.2 percent to Sh12.7 billion.

Other alternative assets held by the pension funds include commercial paper-whose outstanding value grew by 62.3 percent to Sh5 billion and unquoted shares which grew by 14.2 percent to Sh4.5 billion. Smaller assets, which are referred to as ‘other assets’ by the RBA, grew five-fold to Sh300 million, from Sh60 million in June 2024.

‘Alternative assets offer schemes avenues for diversification. Although uptake has been slow over the years, there was a noticeable increase in activity across some classes between June 2024 and June 2025,’ said the RBA in the industry report.

‘The significant uptick in offshore investments and private equity, reflects a strong shift toward high-growth opportunities. The drastic growth in the ‘other assets’ category was mainly driven by investments in Shariah-compliant funds, which have received increased interest from schemes.’

However, despite the growing popularity of the alternative investments, pension funds remain highly exposed to traditional assets such as government bonds, guaranteed funds, listed equities and property, which offer both a guarantee of long term low risk and stable returns for their savers.

By the end of June, the investments in these traditional assets accounted for 94.2 percent of the sector’s total assets of Sh2.53 trillion, led by government securities at Sh1.33 trillion, guaranteed funds at Sh495.9 billion, listed shares at Sh255.2 billion and property at Sh235.6 billion.

Other traditional asset allocations include fixed deposits at Sh64 billion, cash at Sh20.3 billion and listed corporate bonds at Sh3.8 billion.

Overall, the sector’s total assets grew by 27.9 percent fromSh1.98 trillion over the one year period.

The RBA attributed the growth in assets to a stable macro-economic environment, pointing to a mix of a stable exchange rate, favourable interest rates, and mild inflationary pressure.

Bonds and shares saw significant capital gains in the period, helping boost the value of portfolios even as the funds accessed higher inflows from members thanks to higher deductions towards the National Social Security Fund (NSSF).

The third-year implementation of the NSSF Act, 2013, which saw the lower limit contribution go up to Sh8,000 and the upper limit to Sh72,000 also boosted the cash available to schemes for investment.

By the end of June, the NSSF held assets worth Sh558.07 billion, up from Sh402 billion in June 2024.

Out of these assets, Sh517.96 billion is externally overseen by private fund managers on behalf of NSSF, while Sh40.11 billion is internally managed by the State controlled fund.

Kenya’s top eight commercial banks saw their lending margins widen by Sh24.2 billion in the nine months to September, as they cut returns to depositors at a faster pace compared to reduction in the cost of loans.

The lending margins of the banks, including KCB Bank Kenya and Equity Bank Kenya, rose to Sh149.7 billion in the review period compared to Sh125.5 billion a year earlier, according to analysis of the results published so far.

Depositors saw their interest income drop by Sh42.7 billion or 25.2 percent to Sh126.7 billion despite increasing their savings by Sh152.8 billion to Sh4 trillion.

The interest income from loans meanwhile fell at a slower pace of 6.3 percent or Sh18.5 billion to Sh276.5 billion, allowing the banks to expand their lending margins in absolute and percentage terms.

Their loans in the review period rose by Sh159.8 billion to Sh2.88 trillion.

The growth in net interest income shows that depositors have been squeezed more while borrowers have not gained a proportionate benefit from the central bank’s policy to lower interest rates in the economy.

Faced with reduced competition from other asset classes such as short-term Treasury bills -whose returns have halved to below eight percent- banks have been able to cut returns paid to depositors more aggressively.

‘Despite reducing interest rates for customers, the yields have improved significantly because of the cost of funds. So, when the government decided to lower its borrowing rates from 17 percent to currently in the regions of 10 percent the cost of funds went down and net interest margin has driven Kenya,’ said Equity Group chief executive James Mwangi during the bank’s investor briefing at the end of October.

‘As rates came down, we passed that to the customers and reduced loans by 300 basis points, so income has only grown by 3.0 percent. But interest expense has gone down by 21 percent, giving us a 16 percent growth in net interest margin from Sh80 billion to Sh93 billion,’ he added.

Data from the Central Bank of Kenya (CBK) shows that the banking sector’s average deposit rate dropped to 7.63 percent in September 2025 from 11.24 percent a year earlier.

The sector’s average lending rate on the other hand declined marginally to 15.07 percent from 16.91 percent in September 2024.

The growth in lending margins has helped the large banks to report higher earnings in the nine months to September.

Equity Bank Kenya’s net profit grew 51.2 percent to Sh31 billion in the review period as interest margin widened to 8.1 percent from 6.6 percent.

KCB Bank Kenya reported a 6.4 percent profit growth to Sh33.7 billion, supported by its interest margin widening to 7.1 percent from 6.5 percent.

KCB and Co-operative Bank of Kenya were the only large banks to record growth in interest income. KCB recorded a 17 percent expansion of its loan book while other banks saw their lending to the private sector shrink, signalling a difficult business environment.

‘Total revenue grew by five percent supported by 12 percent growth in net interest income on the back of a drop in interest expense,’ said the group’s chief executive, Paul Russo, in a note to investors.

Stanbic Bank recorded the widest drop in the cost of funds of 48 percent, which helped it absorb a 24 percent slump in interest income.

NCBA Bank Kenya recorded a 45.5 percent drop in interest expenses compared to a 16.4 percent decline in interest income. NCBA said it had been rejecting expensive deposits which saw customer savings held in its vaults drop by Sh31.4 billion.

The CBK has been pressuring banks to lower their interest rates to spur private sector lending in a bid to support economic growth.

The CBK’s monetary policy-making committee has in the past nine consecutive meetings cut its base rate to 9.25 percent from 13 percent in June 2024.

Besides rate cuts, it has also reduced the cash banks are required to hold as reserves with the regulator so as to increase liquidity and increase lending to the private sector.

Banks have, however, been slow to pass the benefits of reduced cost of funds and a lighter cash requirement, drawing rebuke from the CBK which has told them to stop giving excuses and lower lending rates.

The regulator is also banking on a new loan pricing formula, which takes effect starting next month, to see banks transmit rate cuts by the monetary policy to the public in full and promptly.

Some of the hurdles, cited by banks, to cutting interest rates on loans include different base lending rates and the poor development of the risk-based pricing framework.

Commercial banks are expected to adopt a new industry loan-pricing standard dubbed the Kenya Shilling Overnight Interbank Average (Kesonia), which is hooked to the rate banks lend to each other.

Banks have used the wider interest margins to protect their profit levels, which are under threat from slow credit growth, loan defaults and a dip in forex income.

The lenders were emboldened to reject expensive deposits as they were not growing their loan books. Taking cash out of banks to invest in Treasury bills also became less attractive for cash-rich individuals and companies as the returns on the sovereign debt declined.

Slow lending has seen banks hold record cash levels, with average liquidity ratio rising to 59.8 percent at the end of August, up from 54.4 percent a year earlier.

This is the highest liquidity ratio recorded for the industry and is against a regulatory requirement of 20 percent.

The liquidity ratio -which captures the amount of cash or near-cash assets held by banks in comparison to their short term deposits- reflects how efficiently a bank is deploying customer savings to make profits.

A new requirement for importers to provide certificates of origin could clog the port without catching rogue traders who undervalue goods to pay low taxes, the Parliamentary Budget Office (PBO) has warned.

PBO notes that while making it mandatory for importers to have the document before goods can be processed by customs offers assurance on where that have been sourced, the government has not proved how the requirement will curb undervaluation.

In the Finance Act, 2025, the government amended the Tax Procedures Act making it mandatory for importers to have certificates of origin issued by a competent authority in the exporting country and now the Kenya Revenue Authority (KRA) must first verify the document before processing imports.

Enforcement of the certificates of origin commenced in October.

‘The mandatory certificate of origin requirement is designed to curb undervaluation and improve customs compliance, but its success will depend heavily on enforcement. If poorly managed, it could create delays at ports and increase bureaucracy without solving the problem,’ the office says.

In a report analysing the government’s budget implementation for the current fiscal year, the PBO is calling on the government to keep an eye on customs clearance times to tell if the policy will affect efficiencies at the port.

The office also observes that to measure its impact, a growth in import duty collections will signify increased compliance among importers.

‘To measure its impact, it will be necessary to keep an eye on customs clearance times, which reflect efficiency. The share of consignments flagged for undervaluation will show if enforcement is improving,’ the PBO says.

KRA has for years concentrated on deployment of advanced scanning technologies at ports of entry to nab tax evaders, though the strategy has not been impactful in cargo valuation.

The PBO observes that resistance to policy changes and new technologies from stakeholders has been one of the main challenges for KRA, in dealing with undervaluation of imports.

Last year, Kenya imported goods valued Sh2.7 trillion, KNBS reported.

‘However, the accurate valuation of import cargo continues to face major challenges, primarily due to widespread undervaluation of goods. High-value commercial and excisable goods are often declared at artificially low values, making accurate valuation difficult and leading to substantial revenue losses,’ the PBO says.

The amendment gave KRA powers to seize goods that lack the certificate of origin.

The PBO reckons that the deeper challenge for the government lies in enforcing strict verification and ensuring that declared values truly reflect market realities, rather than merely asking for the certificate of origin.

‘The mere presence of a certificate of origin does not necessarily guarantee accurate cargo valuation, as importers may still declare lower values despite presenting the correct origin documentation,’ it says.

The office notes that the real challenge is for the government to address underlying issues such as resistance to new policies and technologies, potential corruption, or lack of proper compliance incentives.

‘It will be critical to observe whether this measure leads to an increase in revenue collection and effectively curbs revenue losses arising from undervaluation. Only time will tell if this legislative change solves the long-standing problems or simply reinforces existing challenges under a new legal framework,’ the PBO says.

Shortly after taking office for a second term, US President Donald Trump scrapped a $60 million (Sh7.76 billion) deal his predecessor signed with Kenya’s William Ruto, throwing the Nairobi Bus Rapid Transit (BRT) project into uncertainty.

New disclosures from the Treasury reveal that the Millennium Challenge Corporation (MCC) Threshold Program, originally earmarked for implementation in Kenya, is now slated for termination.

The agreement was signed on September 19, 2023 in New York and entered into force on May 23, 2024, following President Ruto’s state visit to the White House.

The programme, designed to run from January 7, 2024 to June 30, 2027, aimed to improve urban connectivity, promote economic growth, and provide safer, climate-friendly transport options for underserved groups in Nairobi.

Under the agreement, the US government, through MCC, was to contribute Sh5.8 billion, while Kenya committed Sh1.56 billion.

President Ruto’s White House visit in May 2024 saw at least four agreements signed with then US President Joe Biden, covering education, health, security, climate, and trade.

The MCC grant was a key component of the climate and urban transport deal, supporting safer and urban transport deal, supporting safer pedestrian options, gender-inclusive transit, and the acquisition of buses for the emerging BRT network.

‘The programme is earmarked for termination, and notice of termination has already been received,’ the Treasury said last week in the Sector Budget Proposal Report for FY 2026/27.

MCC threshold programmes are designed to help partner countries demonstrate commitment to democratic governance, economic freedom, and investments in their people through targeted policy reforms and capacity-building initiatives.

In Kenya’s case, the programme aimed to strengthen institutions, improve long-term urban planning, and promote integrated, accessible, and safer transportation.

‘The Government of Kenya is committed to the activities and reforms that make up our Threshold Program, which we jointly designed with MCC,’ said Njuguna Ndung’u, the Treasury Cabinet Secretary at the time of signing.

‘This planned investment will strengthen our transport and land sectors and generate benefits for the people of Nairobi and all Kenyans.’

President Trump returned to office on January 20, 2025 after defeating Democratic presidential candidate Kamala Harris.

His administration began reversing deals signed by the previous Democratic administration, including dismantling the United States Agency for International Development (USAID) and reviewing foreign aid programmes worldwide.

Mr Trump announced that his administration would eliminate more than 90 percent of USAid’s foreign aid contracts and $60 billion (Sh7.75 trillion) in overall US assistance globally.

In Kenya, the termination of the MCC grant is part of a broader wave of cancellations affecting US government contracts and foreign aid agreements under the Trump administration.

The value of big-ticket contracts terminated by the US government in Kenya has crossed Sh108 billion.

The Nairobi BRT project, a critical component of Kenya’s efforts to modernise urban transport, is among the most severely affected.

Planned improvements included dedicated lanes for high-capacity buses, safer pedestrian pathways, and gender-inclusive transit facilities.

The programme also aimed to fund climate-friendly buses for the growing network, integrating with the city’s transport infrastructure to reduce congestion, cut emissions, and improve urban mobility.

‘Today’s signing ceremony [in 2023] marked an exciting milestone in the growing partnership between Kenya and the United States,’ President Ruto said at the time.

The BRT programme has largely stalled due to funding shortfalls, which have delayed payments to contractors. Nairobi’s BRT network is set to feature five key lines.

Line 1 (Ndovu) will run from Limuru through Kangemi and the CBD to Imara Daima, connecting to Athi River and Kitengela, with dedicated infrastructure along the Nairobi Expressway.

Line 2 (Simba), which to be partly funded by the MCC grant, will serve the Rongai-Bomas/Lang’ata-CBD-Ruiru-Thika-Kenol corridor, featuring 10 intermediate stations along Thika Road and park-and-ride facilities.

Line 3 (Chui) stretches from Tala and Njiru through Dandora and the CBD to Showground and Ngong, backed by pound 320 million (Sh43.4 billion) from international partners, with plans for 120 electric buses and 14 stations.

Line 4 (Kifaru) connects Mama Lucy Hospital, Donholm, and the CBD to T Mall, Bomas, Karen, and Kikuyu, and is supported by the African Development Bank under Nairobi’s transport master plan.

Line 5 (Nyati) will follow Ridgeways through Balozi to Imara Daima along the Outer Ring Road, costing an estimated Sh7.3 billion financed by the Korean Exim Bank.

Collectively, the lines will feature dedicated lanes, stations, footbridges, park-and-ride facilities, EV-charging depots, CCTV, and enforcement systems, aimed at enhancing commuter safety, reducing congestion, and promoting sustainable transport across Nairobi.

The Transport ministry says it has completed construction of the Business Management Centre at Kasarani Depot, a key element of BRT Line 2 operations, which was intended to run from Rongai to Bomas, the CBD, Ruiru, Thika, and Kenol.