Category: Business Daily

Nairobi, Kiambu, Murang’a, Nyeri and Kirinyaga counties top the list of regions with the highest insurance uptake as Kisumu, Siaya and Meru sit at the bottom of the access ladder, revealing the country’s socio-economic imbalance.

A Financial Sector Deepening (FSD) survey shows the ratio of Nairobi City residents reporting access to at least one insurance product in their own name, excluding social health cover, stood at 12 percent last year-tying it with Kiambu.

They were followed by Murang’a at 11.3 percent, Nyeri at 10 percent and Kirinyaga at 9.5 percent, while Kisumu (1.1 percent), Siaya (1.2 percent) and Meru (1.3 percent) sit at the bottom.

The report’s county-by-county ranking reveals a link between insurance uptake and the country’s socio-economic status.

Counties such as Nairobi, Kiambu, Murang’a, Nyeri, Kirinyaga, Kajiado and Nyandarua which boast of higher levels of formal employment, business density, literacy levels and relatively diversified household incomes are able to tap insurance more.

In contrast, counties such as Kisumu, Siaya, Meru, Kitui, Taita-Taveta, Marsabit, West Pokot, Lamu, Homabay and Kilifi where there is higher dependence on informal sector and weaker financial infrastructure lag.

The divide in insurance uptake among counties leaves millions of households exposed to risks such as health crises, crop and livestock losses, accidents and natural disasters – shocks that often push vulnerable families deeper into poverty.

Insurance uptake is often viewed globally as a proxy for economic development and financial maturity. High uptake reflects financial literacy, better disposable income and stable livelihoods-factors more prevalent in urban and peri-urban counties.

‘By 2024, exclusion from insurance (excluding NHIF) remains highest among casual workers, dependents and agricultural livelihoods, suggesting that informal employment and financial vulnerability limit access,’ notes the survey.

‘Those employed and business owners show relatively lower rates of exclusion. Those who are not financially healthy and in lower wealth quintiles consistently report high levels of insurance exclusion, while improvements are seen among financially healthier and wealthier individuals. The data underscores a persistent socio-economic divide in usage of insurance services.’

Kenya National Bureau of Statistics (KNBS) data shows Nairobi contributes 27.4 percent to the value of Kenya’s economy, followed by Nakuru (5.7 percent), Kiambu (5.5 percent), Mombasa (4.8 percent), Meru (3.5 percent) and Machakos (3.2 percent).

The FSD survey was carried out when the country was about to transition from the National Health Insurance Fund (NHIF) to the Social Health Insurance Fund (SHIF). The survey showed Kenya’s access to insurance (excluding NHIF) fell from 6.9 percent in 2021 to 6.3 percent in 2024, while access including NHIF fell from 23.7 percent to 22 percent over the same period.

At the same time, usage-including secondary use through another person’s policy-rose from 11.4 percent in 2021 to 13.7 percent in 2024 for insurance excluding NHIF and from 28.2 percent to 29.5 percent for all insurance including NHIF.

This divergence suggests that while fewer Kenyans had policies in their own name, many continued benefitting from employer-based schemes, group policies and dependents’ coverage.

‘Overall trends show sustained disparities in access by residence, gender, age, and education level. These trends highlight growing inequalities and underline the need for inclusive reforms in Kenya’s insurance landscape,’ said the survey.

The report identifies affordability as the single largest barrier to insurance uptake. A striking 76.2 percent of uninsured Kenyans cited cost as the main reason they do not hold an insurance product. Women (77.3 percent) are more affected by cost barriers than men (74.7 percent), reflecting gendered income disparities.

The second biggest obstacle is lack of understanding, reported by 23.4 percent of respondents- a challenge more pronounced in rural areas (27.8 percent) than in urban centres (15.5 percent). Other barriers include lack of national identification card (8.4 percent), belief that insurance is unnecessary (7.4 percent) and lack of trust in providers (1.6 percent).

Among those who previously held insurance but discontinued, 61.4 percent said they could no longer afford premiums while 41.9 percent cited job or income loss as the trigger for dropping out. About 65.5 percent of business owners who abandoned insurance did so because they could not afford premiums.

The findings reinforce the vulnerability of insurance uptake to economic shocks, especially in a country where a large share of the workforce is informal and income volatility is high.

Education strongly predicts insurance uptake, with tertiary-educated Kenyans enjoying 18.9 percent access to insurance- excluding NHIF- compared to only one percent for those with no formal education.

‘The survey revealed that access to insurance excluding NHIF, varied by education level, reinforcing the findings that a lack of understanding contributes to low uptake among those without insurance in their own name,’ said the survey.

The Central Bank of Kenya (CBK) must hold at least Sh1.17 trillion ($9.1 billion) in hard currency reserves to meet its requirement of keeping at least four months of the country’s import requirement as orders for goods from abroad rise.

This represents a 16 percent rise from Sh1 trillion ($7.8 billion) at the start of the year, which signals Kenya’s rising import needs.

CBK is required to keep hard currency reserves equivalent to at least four months of the country’s import requirement to meet short term shocks including unavailability of US dollars from the market.

The apex bank calculates in foreign exchange reserves based on the 36 months average of imports of goods and non-factor services.

CBK’s foreign exchange reserves stood at Sh1.59 trillion ($12.2 billion) as of November 13, 2025, representing about 5.4 months of imports into the country.

The reserves must be kept at about Sh1.17 trillion ($9.1 billion) using the same import demand estimate if CBK is to maintain its import cover requirement at a minimum of four months.

Three years ago, CBK would have required less than Sh1 trillion in reserves to cover at least four months of the country’s imports with the threshold sitting at Sh925.7 billion ($7.148 billion) as at the start of January 2023.

Kenyan import demands have continued to rise, driven mostly in recent months by orders for machinery and transport equipment.

‘Good imports increased by 9.2 percent in the 12 months to August 2025 mainly due to an increase in intermediate and capital imports, particularly machinery and transport equipment,’ CBK said last month.

‘Goods imports were 9.1 percent higher in the first eight months of 2025, mainly due to an increase in intermediate and capital goods imports.’

Total goods imported between January and August 2025 stood at Sh2.06 trillion ($15.94 billion) from Sh1.89 trillion ($14.61 billion) in the same period last year.

CBK’s usable foreign reserves have stood firm against pressure from rising imports backed largely by inflows from diaspora remittances and US dollar denominated debt.

According to the Ministry of Foreign Affairs and Diaspora Affairs, remittances crossed the Sh1 trillion mark for 2025 this month underpinned by the government’s engagement with the community abroad.

‘Diaspora remittances remain a vital pillar of our economy, providing financial support to households which directly contribute to national development. These resources are essential in complementing our economic strategies and advancing Kenya’s growth agenda,’ Foreign Affairs Cabinet Secretary Musalia Mudavadi said.

The ministry stated that over 430,000 Kenyans have gained employment abroad through bilateral labour agreements (BLAs) since 2023.

Kenya’s access to the international capital markets has complemented inflows from diaspora remittances to keep the hard currency buffer in an adequate position.

The country undertook a buyback of Sh129.5 billion ($1 billion) Eurobond notes due in February 2028 by issuing a new Sh194.2 billion ($1.5 billion) Eurobond which replenished the CBK reserves.

CBK struggled to meet its foreign currency requirements in 2023 as Kenya faced a dollar availability crisis (dollar crunch) which was driven mostly by speculation on a likely default arising from the maturity of Sh129.5 billion ($1 billion) Eurobond notes in June 2024.

The jitters dissipated in February last year as Kenya undertook an early buyback of the notes which not only ended the fears but also topped up the CBK dollar reserves.

Foreign exchange reserves held at CBK are national assets safeguarded to ensure availability of hard currency to meet the country’s external obligations including imports and external debt service.

The size of official reserves serves as a confidence signal to potential investors and ratings agencies.

CBK undertakes the management of reserves with the policy covering safety, liquidity and maximisation of total returns but the primary objective is usually capital preservation.

Kenya Power awarded contracts worth Sh3.5 billion to youth, women and persons with disabilities in the year to June 2025, marking a more than fourfold increase from the Sh614 million issued a year earlier.

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The jump comes amid sustained efforts by the government to expand opportunities under the Access to Government Procurement Opportunities (Agpo) framework.

The tendering structure, introduced in 2013, requires public entities to reserve 30 percent of their procurement budgets for the three special groups.

The Agpo framework seeks to help marginalised suppliers access State supply chains, especially in sectors such as transport services, office consumables, basic materials and general maintenance works.

Due to its national electricity network, Kenya Power is one of Kenya’s largest procuring entities, sourcing transport, repairs, logistics services and operational supplies for its transmission and distribution operations.

‘The contracts typically feature supplies for general goods such as stationery and services like cleaning, which require little financing efforts from the tender winners,’ Immaculate Karambu, senior corporate communications officer at the utility told Business Daily.

During the review period, youth-owned enterprises received Sh2.2 billion under the programme, while women-owned firms secured Sh1.25 billion and businesses run by persons with disabilities (PWDs) were awarded Sh66.7 million.

Kenya Power said it is enhancing outreach efforts targeting potential bidders, including sensitisation forums and direct engagement with groups covered under the Agpo framework across various procurement categories.

‘Last year, we were intentional in meeting and sensitising the youth, women and PWDs about procurement opportunities that exist for them within the company,’ said Dr John Ngeno, General Manager Supply Chain and Logistics.

Historically, the firm’s procurement budget has been dominated by large technical items such as transformers, meters and network equipment, limiting Agpo participation to smaller service and supply contracts that require modest capital.

Most Agpo-eligible opportunities at the utility involve the supply of consumables, providing logistics and transport support, meter installation services, minor works and other routine items that small firms can deliver without making substantial investments.

This comes at a time when small enterprises are increasingly relying on State tenders to cushion against a subdued private sector, with many facing cash flow pressures in a weak operating environment.

Kenya Power issued the Agpo allocations in a year when its net profit fell to Sh24.46 billion, marking an 18.66 percent decline from the Sh30.08 billion earned in the previous financial year.

The company declared a dividend of Sh1 per share, totalling to Sh1.95 billion, an increase of Sh585.4 million from the prior year’s total payout of Sh1.36 billion.

The higher dividend follows a period of financial restructuring and cost management within the utility, although operational pressures and constrained revenue growth continue to weigh on overall profitability.

Agpo-related procurement remains a key component of State efforts to broaden economic participation, particularly for groups historically excluded from large tenders and major public contracting opportunities.

Kenya Power’s efforts to strengthen Agpo participation are expected to continue as the utility refines its engagement with eligible groups and raises awareness of the requirements for competitive bidding.

LemFi, the financial platform built for immigrants, today announced the launch of its new Instant Access Savings Account in the United Kingdom, powered by ClearBank, the enabler of real-time clearing and embedded banking.

Launching first in the UK, its 2 million+ customers will earn daily interest on their savings monthly, directly within the LemFi app, marking a significant expansion in LemFi’s mission to build a complete financial ecosystem for the global immigrant community.

With LemFi Instant Access Savings, users can grow their money in the same app they use for international transfers to simplify their financial lives. Funds are held securely with ClearBank, a regulated UK financial institution, and eligible deposits are protected up to £85,000 under the Financial Services Compensation Scheme (FSCS).

At launch, LemFi’s savings product offers one of the most competitive interest rates in the UK at 3.92 percent, compared to the national average of 2.27 percent for similar accounts. The rate is currently tracked to the Bank of England’s base rate, with plans to move to a variable rate in the near future, allowing LemFi to remain highly competitive for customers seeking flexibility and returns. Immigrants play a vital role in the UK economy and global financial flows. In 2023, immigrants in the UK sent more than £9.3 billion in remittances to family and friends. Despite this, many lack access to convenient, trusted savings tools that align with their unique financial behaviours and cross-border needs.

In addition, immigrants face significant and widespread issues when accessing credit and banking services more broadly. Approximately 5 million individuals in the UK are considered ‘credit invisible’, with immigrants from emerging countries disproportionately affected.

Step toward a broader financial future

LemFi’s expansion into savings is part of its roadmap to provide a full suite of financial products tailored to immigrants’ needs. This includes LemFi Credit, designed to help immigrants who traditionally struggle to access and build credit do so while also benefiting from flexible payments.

LemFi’s platform can do this by recognising international credit histories and employing alternative credit assessment methods. As well, its alternative credit scoring technology powers Send Now Pay Later (SNPL), designed to enable its customers to send money to their loved ones when they need to, and access credit safely and securely.

Since launching in private beta in August 2025, the Instant Access Savings Account has been used by over 7,000 customers, underscoring strong demand for accessible and immigrant-centred financial products.

The Ruto administration built nearly 555 more kilometres of roads than planned in the year to June after the government started clearing a backlog of contractor debts, triggering progress in projects which had stalled for years.

Data from the State Department for Roads says the country’s three road agencies completed 761.25 kilometres of roads against a target of 206.35 kilometres, exceeding the goal by 268.91 percent.

The new road network delivered by the Kenya National Highways Authority (KeNHA), Kenya Urban Roads Authority (Kura) and Kenya Rural Roads Authority (KeRRA) marked the biggest overachievement in recent years, although the target was the most modest seen in more than a decade.

The additional kilometres done in the year to June 2025, however, forms a fraction of what the country was building before the fiscal year 2022/23, underscoring President William Ruto’s major shift from heavy investments undertaken by his predecessors.

Officials in the Roads department told the National Treasury in a report that the output exceeded expectations due to release of delayed Interim Payment Certificates (IPCs) – documents which enable contractors to get payments for parts of the projects which they have finished.

The partial payments helped unlock a number of dormant projects that contractors had abandoned largely because of cash flow challenges.

‘You may have seen that contractors are back on site. In fact, you will see the contraction of the construction sector [in 2024] now start being positive in GDP,’ Treasury Principal Secretary Chris Kiptoo said on May 14 during an interview on Fixing the Nation programme on NTV.

‘In the 2015 Economic Survey [which covered performance for 2024], you will see that the sector was basically dead. Now we are reviving it,’

The increased construction of new roads coincided with reduction in pending bills for the roads, the first in five years.

The stock of unpaid invoices dropped to Sh128.36 billion at the end of June 2025 from a record Sh166.76 billion the previous year, but still signals financial stress within the road infrastructure portfolio.

‘Target for [2024/25] overachieved due to settlement of outstanding Interim Payment Certificates (IPCs),’ the Roads department wrote in the Sector Budget Proposal Report for financial year 2026/27 to the National Treasury.

Upon taking power, Dr Ruto expressed shock at Sh900 billion in commitments for the roads sector in the budget he inherited from former President Uhuru Kenyatta’s regime (for the financial year ended June 2023).

‘We have tried to cut it down; we have tried to cut some of the roads that have not started. But we still remain with about Sh680 billion that we have to manage,’ the Kenyan leader said on May 14, 2023.

Before 2022/23, the three road agencies were delivering more than 1,500 kilometres a year on average. In contrast, output plunged to 495 kilometres in 2022/23 and 542 kilometres in 2023/24, reflecting the impact of fiscal tightening, project rationalisation and swelling arrears which forced contractors to abandon sites.

The rebound to 761km last fiscal year is less than half of what Kenya built during the years leading up to the transition to the current administration in September 2022.

The data suggests that the roads sector remains far from its historical peak capacity, despite the headline overperformance.

Government arrears to contractor arrears-largely unpaid IPCs for completed works-have ballooned in the last half a decade, rising from Sh40.93 billion in 2019/20 to a record Sh166.76 billion in 2023/24.

The partial relief last financial year explains why contractors returned to sites and complete suspended works.

In a bid to tame inflation of contract costs and cut wastage of taxpayer money, Dr Ruto administration in November approved a ‘Comprehensive Framework for Infrastructure Projects Pricing’ to standardise pricing of public infrastructure projects such as roads, bridges, dams, electricity plants and transmission lines.

The framework seeks to eliminate the irregular, inconsistent, and costly practices that have characterised the pricing of government infrastructure projects,’ read a dispatch from the Cabinet following a meeting on November 11.

‘It aims to establish a data-driven system for determining infrastructure costs, ensuring accountability and prudent use of public resources.’

Kenya’s youth readiness for the job market has been brought into sharp focus by BrighterMondays’ Skills Gap and Gender Analysis Report 2025, which pointed to a skills mismatch between the skills the industry needs, and what is being taught in colleges.

This article will explore the causes and interventions to bridge the skills gap.

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Employers indicated the skills needed today are digital and ICT capabilities, sales and marketing, and basic financial competence.

Soft skills, like communication, teamwork, problem-solving, time management and work ethic, appeared more valued, often outweighing technical ability during recruitment.

More than 70 percent believe curricula are behind the market needs, over half say students lack exposure to real workplaces, nearly 56 percent point to poor career guidance, and others cite poor curriculum delivery and limited access to digital tools.

Notably, the youth access to mentorship is limited, and they demonstrate weak preparation for a work environment that increasingly demand adaptability and self-management. The result is a youth who arrives enthusiastic but often unprepared for real-world demands.

Kenya’s policy framework has taken steps to prepare the youth. Over the past decade, the country has revised its education system multiple times, moved toward competency-based learning, and launched a National Skills Development Policy and a Dual Training Policy aimed at deepening industry participation.

Yet, as the Brighter Monday data shows, these intentions have not fully translated into a predictable outcome. Attachments opportunities remain few, inconsistent in quality, some universities struggle with funding and frequent disruptions to learning, and many TVET institutions lack strong industry linkages.

Where partnerships do exist, they tend to be concentrated in a few urban centres or in sectors where donor support has already opened doors.

There are however encouraging models that show what is possible when employers, training institutions work together. The Kenya National Skills Development and Dual Training Policy and The Generation Kazi programme highlighted in the Brighter Monday report are some useful initiatives.

By blending employer input, targeted training and job linkage, it demonstrates that collaboration can produce graduates who are both technically ready and prepared for workplace dynamics.

Similar successes can be found in sectors like nursing, hospitality and manufacturing, where structured apprenticeship models have allowed learners to gain hands-on exposure while still studying.

Strengthening work-based learning, improving labour market intelligence, and fostering regular dialogue between employers and educators are emerging as practical pathways.

Employers, too, increasingly recognise that the workforce they need tomorrow must be shaped today, and that hiring ready-made talent cannot be the only strategy in a fast-disrupting labour market.

The challenge of digital inequality also pushes the conversation into new territory. The labour market is moving online, with employers relying heavily on digital platforms for recruitment and communication.

Expanding affordable digital infrastructure, strengthening community-level training hubs, and integrating career support services into counties could help bridge this divide. None of these require overhauling the system; instead, they call for coordinated, multi-stakeholder effort.

Curriculum alignment can produce meaningful results. Training institutions that regularly consult industry players, tend to adjust faster and produce graduates better prepared for work. Creating consistent channels for such engagement could gradually reduce the mismatch that employers continue to cite.

Updating modules, embedding leadership and communication skills, and refreshing assessment methods to reflect workplace realities can be undertaken progressively, without disrupting learning cycles.

Many young people navigate education choices without adequate information about emerging sectors, or about the evolving mix of technical and soft skills that employers value.

Building stronger career guidance, not as a career-day event but as an ongoing conversation can help youth make informed decisions. Better guidance does not guarantee jobs, but it can reduce misalignment and help young people choose pathways that match both their strengths and market needs.

The BrighterMonday reframes the skills conversation around what can be influenced now. Kenya’s youth population is large, ambitious and eager to work. Employers are ready to hire but need talent with practical exposure and adaptable mindsets.

Training institutions are willing to adjust but often lack current market signals. Somewhere between these three actors lies the opportunity to gradually close the gap, through collaboration and research data, consistency and shared responsibility in skilling the youth for the workplace.

The labour market is shifting quickly, and Kenya is not alone in grappling with how to keep young people relevant in an era shaped by technology and uncertain economic times.

What matters now is whether the country can translate the insights from reports like Brighter Monday’s into deliberate, sustained action.

While the youth may not be failing, the education system, and the industry players must collaborate, because the youth are navigating workplaces that evolve fast, and only employers, Human Resource Managers, and researchers can identify the industry needs, develop interventions to prepared the youth to become employable, and prepare the next generation of leaders.

The writer is a HR Strategist, Leadership and Career Coach, Pristine Management Solutions Ltd.

Web traffic on several major sites was disrupted globally on Tuesday afternoon following an unidentified issue affecting Cloudflare, a US-based firm that provides security and performance services for websites and networks.

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Millions of internet users were unable to access some platforms, including social media site X (formerly Twitter) and ChatGPT, after Cloudflare suffered a systems failure.

‘Cloudflare is experiencing an internal service degradation. Some services may be intermittently impacted. We are focused on restoring service. We will update as we are able to remediate,’ the company said on its status page.

Users attempting to load affected sites encountered messages such as ‘internal server error’ and ‘there is an internal server error on Cloudflare’s network.’

According to Downdetector, which tracks real-time outages, Cloudflare began experiencing problems from 2.16pm, with reports surging from two incidents to thousands by 2.46pm.

In a 4pm update, Cloudflare said: ‘We are continuing working on restoring service for application services customers.’

Cloudflare sits between a website’s server and its users, helping to block cyberattacks, speed up load times and prevent servers from being overwhelmed. Because so many platforms rely on Cloudflare for routing and protection, a disruption in its systems can trigger widespread outages across multiple services at once.

Kenya’s horticulture exports grew 20 percent to Sh87.3 billion in the first half of the year, on the back of higher quantities of fresh cut flowers, fruits and vegetables sold abroad.

Analysis of the data from the Kenya National Bureau of Statistics (KNBS) shows that horticultural exports in the review period grew 19.04 percent from Sh73.3 billion in a similar period last year.

Monthly quantities of fresh horticultural exports grew to 252,083 tonnes in the first half of the year from 210,053.20 tonnes in a similar period last year.

Cut flower exports from Kenyan farms grew to Sh47.1 billion in the period under review from Sh39.4 billion in the previous year. Quantities of cut flowers sold abroad rose to 66,688.3 tonnes in the six months to June 2025 from 52,524.1 tonnes a year earlier.

Most of Kenya’s flowers are sold to the Netherlands (about 70 percent), followed by the United Kingdom. Other significant markets are Germany, Italy and France.

The quantity of fruits exported rose to 147,860.9 tonnes in the six months under review from 123,369 tonnes sold in the previous year.

This growth saw the value of fruits exported from Kenya increasing to Sh29.3 billion from Sh22.1 billion.

Fruit production is seasonal, with KNBS data showing that output peaks between March and April.

The volume of vegetable exports grew marginally to 37,534.3 tonnes from 34,160.1 tonnes in the period under review however, the value of the exports fell slightly to Sh10.9 billion from Sh11.8 billion.

Kenya’s horticultural industry generates thousands of employment opportunities in the agriculture sector and is one of the country’s top exporters and foreign exchange earners.

Local producers have benefitted from a stronger euro and improved logistics as they supply into the European market.

‘This year we have observed a stable currency and more reliable shipping into our main European export markets,’ agricultural firm Kakuzi said in its interim financial statements for the half year to June 2025.

Shipping of goods through the Red Sea was disrupted last year and early this year due to the Middle East conflict but the situation has improved significantly in recent months.

The euro gained to highs of Sh151.4 at the end of June 2025 compared to Sh134.4 at the beginning of the year, having depreciated dramatically from highs of Sh176 at the start of 2024. A stronger euro results in higher earnings for Kenyan exporters in shilling terms.

Besides Europe, Kenya’s horticultural products are sold in other markets including China, Peru and South Africa.

The November Treasury bond buyback failed to hit its target of Sh30 billion after the Central Bank of Kenya (CBK) rejected more than a third of the offers made by bondholders.

The CBK bought back Sh20.08 billion worth of the securities out of offers of Sh34.3 billion at a price of Sh103.29 per bond unit of a face value of Sh100.

The Treasury was buying back a portion of the three-year bond issued in May 2023, which is due to mature in May 2026. The bond has an outstanding value of Sh76.54 billion, which will drop to Sh56.46 billion once the buyback is settled.

The average yield to maturity on accepted offers stood at 7.78 percent, just two basis points below the average yield of 7.8 percent demanded by bondholders to sell to the government.

The bond has a coupon (fixed interest rate) of 14.228 percent and last paid investors their semiannual returns on November 10, 2025.

According to analysts, the small differential between demanded and accepted yields indicates that investor bids were not the primary reason behind the CBK’s decision to reject Sh14.2 billion worth of offers.

‘The rejection rate thus points to potential cash flow concerns for the government in the near term -hence the need to keep some cash in hand- given that the price demanded by bondholders closely matched that of accepted offers,’ said a bond dealer in a commercial bank.

Earlier this month, the Treasury raised Sh52.8 billion from the sale of reopened 15 and 20-year bonds, which had realised bids worth Sh92.9 billion.

The proceeds of this sale were expected to be partially used to fund the buyback, given that the state is currently ahead of its pro-rated borrowing target with a net haul of Sh434 billion so far in the current fiscal year.

However, the CBK reopened a further two bonds for sale last week with an eye on the buyback expenditure. They are a 15-year paper first sold in 2019 and a 25-year one issued in 2022 -targeting Sh40 billion and marking a rare occasion of the CBK making two bond sales within a single month outside of tap sales.

The two reopened bonds, which have been on sale since November 11, will be auctioned on Wednesday.

In choosing to pursue domestic bond buybacks in the current fiscal year, the government has been looking to smoothen maturities away from months when high repayment obligations would pose a liquidity problem for the exchequer.

Buybacks allow the government to repurchase its own debt from investors/holders before the maturity date.

In addition to smoothening the future maturity profile, buying back bonds can also help the exchequer save on interest costs by replacing high interest instruments with lower paying paper.

The government’s domestic bond issuance calendar for the 2025/2026 fiscal year shows that the Treasury planned for six domestic bond buybacks, including papers valued at Sh103.4 billion with an August 2026 maturity and Sh144.5 billion maturing in September 2027.

In February this year, the CBK carried out its first domestic bond buyback with a Sh50 billion repurchase of portions of three bonds that were due to mature later in April and May, easing the headache of payments in the two months.

The liability management plan also calls for issuance of switch bonds, in which investors or bondholders are given the option of rolling over their expected final payouts to another security with a longer maturity profile.

Previous switch bond issuances have been utilised to move holders of maturing short term Treasury bills to longer dated bonds.

The Central Bank of Kenya (CBK) is piloting instant payments to government suppliers through the instant bank-to-bank transfers platform PesaLink in a bid to accelerate settlements to businesses.

Once fully rolled out, the move would bring relief to thousands of government suppliers who until now wait on payments through slower bank transfer processes.

National government pending bills climbed to Sh526 billion in June 2025 from Sh421.6 billion in March 2025, as per data from the National Treasury.

‘PesaLink is involved in a pilot project with the CBK for government supplier payments,’ CBK noted in disclosures made in the State of Inclusive Instant Payment Systems in Africa report.

‘The pilot for supplier payments has completed all user acceptance tests and has been signed off, with the go-live on the horizon.’

The pilot has allowed suppliers to choose the accounts or wallets to receive the funds, while participating banks and mobile money service provider T-Kash (operated by Telkom Kenya) -have been responsible for contacting PesaLink to investigate transaction statuses if a supplier does not receive their funds.

PesaLink is a round the clock real-time digital payment solution allowing instant bank-to-bank transfers at a low cost.

The system is owned by local banks through their stake in the Integrated Payment Systems Limited which is PesaLink’s registered business/legal name.

The move to foster instant payments to government suppliers is part of a wider goal to expand government to person payments ,which have not been a prominent use case for PesaLink.

This is despite government institutions including State-owned enterprises and ministries, holding their funds in accounts at the CBK which connects directly to PesaLink as a participant in the ecosystem.

CBK acts in a similar capacity to a commercial bank by providing channels and a portal to various ministries and State-owned enterprises to disburse funds.

Ministries and State Departments enter beneficiary details, which are validated using a PesaLink API before the funds are debited and the payment instructions sent.

Additional plans

PesaLink aims to significantly reduce costs to the government for social benefit payments and provide an alternative to banks which require beneficiaries to have an account whose tiered pricing models are potentially expensive.

Counties already use PesaLink to disburse social welfare payments.

CBK has indicated additional plans to expand the use of PesaLink to include the settlement of salaries and pensions.

‘There are also plans to expand the service to include government pension and salary payments,’ CBK indicated.

‘Upon initiation, transactions are typically executed instantly, reaching beneficiary accounts in seconds. Although funds are credited immediately, movement and settlement of funds between participating financial institutions occur later, via a net settlement file prepared by PesaLink and handled by a central settlement system which is oversighted by the Kenya Bankers Association.’

The Kenya Kwanza administration has mulled securitising some of the State’s pending bills, to clear arrears to the government suppliers beginning with road suppliers.

The government has begun settling the arrears using a Sh04 billion syndicated loan from commercial banks, allowing road contractors to resume abandoned projects ahead of the issuance of two roads bonds totalling Sh300 billion.

Investors in the bonds are to be compensated using partial collections from the road maintenance levy fund, which have been set at Sh12 per litre from the sale of petrol and diesel.