Category: Business Daily

After every meal, most people often reach for a toothpick to dislodge bits of food stuck between their teeth. It feels satisfying, almost like the final step of enjoying a good meal. But dentists warn that this simple habit, when done every day, can gradually damage the gums and change the shape of your smile.

Dr Serah Wanza, a dentist at Versatile Dental Solutions, says that frequent toothpick use puts pressure on the gums and, over time, can cause microtrauma that leads to inflammation and gum recession. Additionally, repeated use of toothpicks can create gaps between the teeth.

So, how does the recession happen?

“It’s not that the toothpick is pushing the teeth apart,” Dr Wanza explains. “It’s the gum tissue shrinking away because of repeated irritation and micro-injury.”

As a result, gum recession develops, and before long, the triangular space between the teeth, from the point where they touch down to the level of the bone, which should be filled with healthy gum, becomes exposed.

In a healthy mouth, that space is naturally occupied by gum tissue known as the interdental papilla. When it recedes, it creates what dentists call “black triangles,” the dark gaps that appear between teeth as the gums pull back.

While it is normal for bits of food to get pushed into the spaces between your teeth as you chew, the tongue and cheeks can push even more debris into those gaps, making it more noticeable if there is the slightest opening.

Can toothpicks cause infections?

“Yes, they can when the packaging is not individual and handling not hygienic. Secondly, when the wooden fragment fractures and is left in the interdental space, the body views it as a foreign body and inflammation ensues as a defence mechanism, and if unaddressed, it can progress to an infection.”

The correct way to use a toothpick, according to Dr Wanza, is to do it in front of a mirror, where you can see what you are doing and you are not blindly poking your gums.

“You approach the tooth gently and parallel to the surface of the tooth, not downward into the gum. The goal is to lift the food out, not push anything in,” she adds.

Is flossing any better?

When comparing a toothpick to dental floss, the main difference lies in what each can reach. Dr Wanza says, “A toothpick is thick, and it mostly just cleans the surface between the teeth, but if anything is sitting slightly under the gum, the toothpick can’t really reach that. You can actually press the food even further under the gum instead of removing it.”

String flossing, she adds, is definitely better than toothpicks, mainly because the latter cause gum recession over time. “You get the real benefits of flossing only if you do it consistently and correctly,” Dr Wanza says.

“The proper technique involves letting the dental floss hug the surface of the tooth in a C-shaped curve. That way, the floss actually wraps around the tooth and can reach just below the gumline, where plaque and bacteria accumulate. Simply sliding floss up and down without that curve won’t remove all the buildup.”

Other than dental floss, Dr Wanza says there are also water flossers and interdental brushes that can help clean between the teeth.

“Interdental brushes are useful in certain cases, but I generally do not recommend them for people whose teeth are tightly spaced, because they may not fit properly and could injure the gums,” she says.

For people with crowded teeth, a combination of water flossers and string floss is the best way forward. The biggest challenge with flossing, Dr Wanza says, is inconsistency and incorrect technique. “I recommend flossing at least once daily in the evening.”

International development agencies will be required to reserve at least two-thirds of jobs for Kenyans to qualify for diplomatic privileges in proposed legal changes that also withdraw their legal immunity from contractual disputes, labour grievances and traffic offences.

The Privileges and Immunities (Amendment) Bill 2025 is seeking new criteria for awarding diplomatic privileges such as tax exemptions and legal immunities to foreign development institutions, charities and foundations such as Oxfam and Save the Children International.

The proposed sweeping legal changes will limit expatriate hires to one-third of total staff to align with Kenya’s national labour objectives which grant work permits to foreign firms that demonstrate that the required technical skills are not available in the country. ‘The [internationally recognised] body may employ expatriates upon justification that no Kenyan has the requisite qualifications, skills, or experience to occupy a particular junior or middle level position,’ the Bill reads.

‘The internationally recruited staff or expatriates shall be no more than one third of the total number of staff working for the organisations.’

The Bill significantly narrows the scope of immunities available to foreign NGOs and development agencies.

Immunity from legal process will apply to actions conducted in the course of official duties, excluding contractual disputes, commercial activities, labour grievances, traffic offences and criminal matters.

This reverses longstanding perceptions that some organisations have previously operated with excessive protections from the law.

The legal changes also seek to scale back tax exemptions following concerns over broad cushions accorded to some organisations which were given diplomatic privileges earlier in the year.

Tax benefits the targeted firms, legally referred to internationally recognised bodies, will get will be restricted to goods and services procured for official use, while business income, utilities, indirect taxes and land rates will remain payable.

Foreign and Diaspora Affairs Cabinet Secretary will also have powers to suspend or withdraw privileges in cases of abuse, breach of Kenyan law or refuse to waive immunity where necessary for the administration of justice.

The proposed overhaul of vetting and regulation of organisations with diplomatic privileges follows public uproar earlier this year after the government granted host country agreements to six organisations, triggering debate over transparency, accountability and national interest.

The Ruto administration in February approved privileges for Shelter Afrique Development Bank, Oxfam International, the International Institute for Democracy and Electoral Assistance (IDEA), the Norwegian Refugee Council, Population Services International (PSI), and Save the Children International.

Months earlier, in October 2024, the Gates Foundation had been granted similar status, but the organisation withdrew from the agreement in April after the Law Society of Kenya (LSK) challenged the award in court, citing concerns over procedural fairness and broad immunities.

Foreign and Diaspora Affairs Cabinet Secretary Musalia Mudavadi said the proposed new legal provisions will plug gaps in the current law, making clear government’s intention to prevent repeat of controversies seen earlier this year.

‘The principal object of this Bill is to amend the provisions of the Privileges and Immunities Act, Cap. 179, to address the challenges affecting the grant and administration of privileges and immunities to internationally recognised bodies offering technical assistance to the Government,’ Mr Mudavadi, also Prime Cabinet Secretary, wrote in memorandum accompanying the Bill.

The Foreign Affairs ministry has scheduled a webinar on Tuesday (November 18) to collect public views.

To maintain privileged status, internationally recognised bodies will be required to submit an annual performance and staff report to the Foreign Affairs CS by December 31 each year.

Organisations that fail to meet reporting obligations risk having their host country agreements suspended or revoked within 14 days of notice.

Existing organisations that currently enjoy diplomatic privileges will continue operating under transitional arrangements until their agreements are reviewed under the new framework.

Organizations applying for or renewing privileged diplomatic status will be required to submit audited financial statements for two years, staffing levels, budgets, firm’s activities, projected investments and a breakdown of their board composition.

At the heart of the overhaul is the establishment of a powerful seven-member Host Country Agreements Committee, which will vet organisations applying for diplomatic immunities, tax exemptions or formal host country agreements.

The committee will be chaired by the Principal Secretary for Foreign Affairs Korir Sing’Oei.

Members of the the committee will be National Treasury PS Chris Kiptoo, Attorney-General Dorcas Oduor, Kenya Revenue Authority Commissioner-general Humphey Wattanga, Director-General of Immigration services Evelyn Cheluget, and the National Intelligence Service Noordin Haji, or their respective designated representatives.

The powerful committee will evaluate each organisation’s governance, compliance, financial transparency and operational footprint before making a recommendation to the Cabinet Secretary on whether an agreement should be approved, renewed, suspended or terminated.

It will also scrutinise annual returns filed by organisations and monitor whether activities undertaken in Kenya align with the commitments outlined in their agreements.

To qualify, an organisation must have operated for at least five years, demonstrate performance record in a minimum of three countries and show that its activities directly support Kenya’s development priorities such as health, humanitarian relief, education, scientific research, environmental protection and public health.

The multi-agency structure marks a significant shift from the current decentralised vetting processes done by Foreign Affairs Cabinet secretary and his staff.

This is likely to give the government greater visibility into how foreign organisations are funded, staffed and managed.

The proposed law also introduces a new offence for submitting falsified or forged documents during the application process, carrying a penalty of up to three years in jail or a Sh100,000 fine, or both.

The High Court has cleared Tanzanian business magnate to set up a Sh16 billion cooking gas plant and storage facilities at the Mombasa port, escalating a vicious billionaire’s brawl against tycoon Mohamed Jaffer.

Taifa Gas Investments SEZ Ltd got a reprieve after a court struck out a petition challenging its construction of a 30,000 metric tonnes of LPG terminus at Dongo Kundu Special Economic Zone in Likoni, Mombasa.

The suit had derailed Taifa Gas, which is owned by Tanzanian tycoon Rostam Aziz, after the energy regulator gave the firm the nod to build the mega plant in 2022.

The entry of the business magnate, who was ranked the first dollar billionaire in Tanzania by Forbes in 2013, signals a vicious battle for control of the Kenyan cooking gas market that remains under the tight leash of Mr Jaffer, a Mombasa-based tycoon.

The Court ruled that, having come to the finding that issues and parties in the petition were the same as those in the National Environmental Tribunal (NET) appeals, it followed that the petition was re judicata (issue having been adjudicated upon and determined).

‘The finding that the respondent’s (company’s) preliminary objection on the ground of res judicata is upheld, suffices to determine the petition and application,’ ruled the court.

Mr Aziz had in 2021 complained that Nairobi went mute on his 2017 enquiry to build an LPG plant, lamenting the barriers for Tanzanian entrepreneurs seeking a presence in Kenya.

Taifa Gas is the largest LPG supply company in Tanzania and has been feeding the Kenyan retail market via road.

Now, Mr Aziz is seeking a large share of Kenya’s LPG market.

It also sets the stage for a billionaires’ fight pitting Mr Jaffer and Mr Aziz that is first expected to cut the cost of handling and evacuating cooking gas from the ships to the mainland, allowing dealers to transfer the cost relief to consumers.

Just like Mr Jaffer, Mr Aziz has invested in building political networks that saw him serve as MP and treasurer of the Tanzanian ruling party — Chama Cha Mapinduzi (CCM).

Mr Aziz’s ambitions to establish a retail cooking gas presence in Kenya look set to trigger another market fight with oil dealers like Vivo, Rubis and Total, for control of the 2.87 million households (23.9 percent of Kenyan households) that use the fuel for cooking. ‘This ruling is not only a vindication of our commitment to due process and environmental responsibility, but also a milestone for Kenya’s energy transition,’ said Mr Aziz on Saturday in a statement.

‘Our 30,000-metric-ton LPG terminal, the largest in Africa, will expand access to clean energy, strengthen regional energy stability, and create new pathways for prosperity,’ he added.

This will be right at Mr Jaffer’s doorstep, with his firm Africa Gas and Oil Ltd (AGOL) operating a multi-billion shilling facility in the same area.

It is unclear what AGOL charges oil firms for handling cooking gas, but the lack of stronger players in the business suggests a lack of significant competition that has kept the fees high.

AGOL has a storage capacity of 25,000 tonnes of LPG following an earlier upgrade of the facility, initially built in 2013.

The Environment and Land Court (ELC) ruled that it was apparent from the petitioners’ evidence was based on the project requisite approvals and permits from the National Environment Management Authority (Nema).

It further noted that the petitioners’ claim was not essentially about their constitutional rights and freedoms being infringed or threatened by project-related works, but was questioning the process and status of (project) approval and execution.

‘The petitioners’ claim in this petition is therefore not a constitutional petition, but a challenge on the respondent’s Environmental Impact Assessment (EIA) licence to the LPG project,’ ruled the court.

‘The court therefore has no reasons or basis upon which to fault the process undertaken by the respondent and approvals obtained in respect of their LPG project,’ ruled the court.

The ELC ruled that, having found that NET is within its jurisdiction to address any appeals relating to the EIA licence issued to Taifa Gas Investments SEZ Ltd by NEMA, then the case was filed before it prematurely.

The court ruled that the right forum to seek relief from was the Tribunal and that it (court) would be approached through an appeal.

The petitioners claimed LPG plant and intended to clear indigenous natural trees and vegetation as well as excavate the land, arguing it will lead to soil erosion and environmental degradation of the land and its environs.

They were also seeking compensation from Taifa Gas Investments SEZ Ltd for the destruction of the environment, indigenous trees and vegetation and excavation works in violation of the law.

Jaffer’s AGOL was built to allow for bulk imports of cooking gas to lower unit costs through economies of scale and curb shortages, which had been made difficult by the smaller import terminal at Shimanzi.

The AGOL plant and Proto Energy, the maker of Pro Gas, have offered Mr Jaffer a firm grip on the lucrative cooking gas market.

The business mogul is also the owner of Grain Bulk Handlers, which has a near monopoly in the discharge and handling of bulk grain cargo at the Port of Mombasa.

Private companies have been angling to benefit from the growing use of cooking gas in Kenya in the absence of investments by the government via import and storage facilities.

Kenya Power targets to onboard power plants with a combined 1,112 Megawatts (MW) to the national grid, with talks with producers set to speed up after Parliament lifted a freeze on new power purchase agreements (PPAs).

A brief from the Cabinet Secretary for Energy and Petroleum, Opiyo Wandayi shows that the negotiations with the 54 power producers are at various stages, with some set for further talks this month.

Parliament lifted a seven-year moratorium on new PPAs last week paving the way for resumption of the talks with concerns that the country is tinkering on a crisis amid power rationing and increased reliance on imports from Ethiopia and Uganda. Majority of the 54 power plants are for hydropower with the rest being for wind and solar. The biggest one of these will be two wind power plants, each with a capacity of 100 MW.

‘KPLC commenced engagement on PPAs with 65 generation projects with a total of 1,112 MW and majority being small hydropower,’ the brief reads.

‘Developer shared a marked-up draft PPA and updated the financial model. However, mark up showed the developer disagreed with most of KPLC’s position. Requested developer to share matrix of issues and final positions on issues before team resumes PPA drafting.

Developer scheduled for a meeting within November 2025,’ Kenya Power says on one of the plants.

The negotiations include four other wind plants, each with a capacity of 50 MW. These are owned by Chania Green, Prunus Energy Systems, Aperture Green and Sub-Sahara W.

One of the 100 MW wind plant is owned by Hewani Energy whose joint owners are Seriti Green of South Africa and Eurus Energy of Japan.

This plant will be built in Meru County. The other is owned Kipeto Energy, a power producer which already has another running PPA with Kenya Power. Most of the negotiations were put on ice after MPs extended the freeze on new PPAs two years ago as the lawmakers sought more time to investigate the existing PPAs blamed for steep prices of electricity.

The moratorium has left Kenya in a scenario where a surging demand has outstripped local generation, forcing Kenya Power to increasingly lean on Ethiopia and Uganda to shore up supplies.

Electricity imports have significantly grown over the last four years with their share in the national grid more than doubling to 10.6 percent or 1.53 billion kilowatt-hours (kWh) in the year to June 2025 up from 4.87 percent a year earlier and one percent in 2021.

Increased importation of electricity from Ethiopia and Uganda has helped to avert power rationing (from 5pm to 10pm) on a bigger scale.

Power rationing is the controlled and temporary cutting of electricity supply to consumers to avert overloads on the grid when demand exceeds the available generation capacity.

Kenya Power is now expected to speed up talks with the power producers following the lifting of the moratorium.

Expeditious talks are critical in helping to avert the power generation crisis by ensuring no further delays to efforts of onboarding new power plants. It takes at least one and half years to construct a plant.

The disclosures further show that Kenya Power held a number of meetings with the power producers last month. Most of the firms are pushing for financial closures to pave the way for the start of the projects.

The High Court has struck out a petition seeking the removal of Kenya Railways Managing Director Philip Mainga over allegations of corruption, irregular procurement and fraudulent land compensation payments.

In its decision, the court ruled that it lacks jurisdiction to intervene in matters reserved for statutory bodies.

Human rights defender Eric Kithinji Mwiti had petitioned the court in September 2024, accusing Mr Mainga of violating constitutional principles under Articles 10 (national values), 73 (leadership integrity), and 232 (public service ethics). The petitioner alleged that Mr Mainga engaged in irregular procurement.

He also alleged fictitious compensation payments for land in the Datuto/Dafur Settlement Scheme and embezzlement of public funds, undermining Kenya Railways’ financial integrity.

The petitioner sought an order declaring Mr Mainga’s continued stay in office was against public interest, a criminal investigation by the Ethics and Anti-Corruption Commission (EACC), prosecution by the DPP, and an injunction halting further compensation payments.

However, the court upheld Mr Mainga’s preliminary objection, emphasizing the separation of powers and statutory mandates.

It was argued that the CEO’s removal was beyond the court’s powers. Mr Mainga argued that Kenya Railways Corporation Act vests removal powers exclusively in the Cabinet Secretary, not the Judiciary.

He stated that bypassing statutory removal processes would violate legal procedures, adding that challenges to land payments fall under the Land Acquisition Tribunal and the Environment and Land Court, not constitutional petitions.

The court conceded, ruling that though corruption allegations remain serious, petitioners must use proper legal channels and the anti-corruption legal framework.

‘The body with which the petitioner ought to have raised this complaint first is the EACC, as it is the one with the primary mandate to oversee public officers on matters of values and principles of governance under Chapter 6 of the Constitution,’ said the court.

It noted that the petitioner had not complained to the EACC.

Another finding was that the EACC and DPP operate independently under Articles 249 and 157 of the Constitution and courts can only intervene if these bodies abdicate their duties.

Since no such failure was proven, the petition was dismissed.

‘This is a perfect case to invoke the doctrine of judicial abstention, which allows this court to refrain from overstepping its judicial authority to allow the proper functioning of other government organs or bodies. The Petition is therefore struck out,’ said the court.

Kenya’s tax system is entering a new era of automation. On November 7, the Kenya Revenue Authority (KRA) announced that from 2026, it will automatically verify tax returns against eTIMS invoices, withholding tax (WHT) filings and customs records to ensure that expenses and incomes match official data.

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On November 12, KRA further announced that effective December 1, all bank guarantees shall be executed exclusively through the integrated Customs Management System (iCMS).

This shift marks a decisive move toward tech-driven tax verification, promising speed and efficiency – but also raising the stakes for taxpayers. It comes at a time when KRA is under pressure to expand the tax base and raise tax-to-GDP ratio to 22 percent. The journey to this point has been gradual. It began with the introduction of the Tax Invoice Management System (TIMS) in 2022 to replace the Electronic Tax Register (ETR) regime in force since 2005. TIMS required VAT-registered businesses to purchase specialised devices to issue invoices.

The aim was to create a secure, standardised way of capturing VAT transactions and transmitting them to KRA real time. It also made it harder to fake invoices or manipulate records while making VAT audits easier by closing gaps on VAT reporting.

However, the hardware requirement and technical hurdles made it costly for businesses. In response, KRA launched eTIMS in 2023 – a software solution accessible via computers, smartphones, and USSD.

At this point the focus also expanded to cover income tax.

Initially, eTIMS compliance was limited to VAT-registered taxpayers. However, legislative changes under the Finance Act 2023 and the Tax Procedures (Electronic Tax Invoice) Regulations, 2024 expanded the scope significantly.

From January 1, 2024, all businesses – whether VAT-registered or not – were required to issue eTIMS invoices. The rationale was simple: for an expense to qualify for income tax deduction, it must be supported by an eTIMS-compliant invoice.

The regulations also revoked the exemption that spared traders with annual turnover of below Sh5 million from mandatory eTIMS compliance. KRA argued the exemption hindered efforts to expand the tax base and track financial flows in the informal sector.

To accommodate small enterprises, simplified solutions such as eTIMS Lite (Web), a mobile app, and a USSD option (*222#) were introduced, ensuring accessibility in remote areas.

Initially, compliance uptake remained slow due to technological barriers and limited awareness. As a result, KRA extended onboarding deadlines, intensified public education, and introduced sector-specific solutions like the eTIMS Fuel Station System – mandatory for all petroleum retailers by June 30, 2025 as the latest eTIMS update.

eTIMS has redefined the approach to tax compliance. First, it creates a direct link between the income declared by one taxpayer and the corresponding expense claimed by another. Every electronic invoice is transmitted to KRA real time and linked to the seller’s and buyer’s PIN.

When the buyer claims that invoice as an expense, KRA will match the figures and descriptions. This creates a traceable link by ensuring both sides of the transaction are visible and subject to the correct tax treatment.

Second, automated checks ensure expenses are not claimed multiple times or by entities that did not incur them. It blocks inflated or fictitious expenses-since only costs supported by valid eTIMS invoices can be deducted. Finally, by requiring all businesses to issue eTIMS invoices, it brings previously unrecorded transactions into the tax net.

The KRA uses WHT records for several checks. First, if you earn income subject to WHT, the taxman compares the gross amount in the WHT return with what you declared in your tax return.

If the figures don not match, this gap is identified and a compliance alert raised.

The check also links the payer’s WHT filing to the payee’s tax return to prevent situations where one party claims an expense, but the other fails to declare the income.

Second, for businesses claiming expenses where WHT applies (like professional fees or rent), KRA checks if WHT was remitted. For customs, the system match tax returns with declarations in iCMS to confirm goods were actually imported, values align with customs records, and duties were paid.

Looking ahead, the integration of eTIMS with other compliance tools will deepen. KRA has already linked Tax Compliance Certificate issuance from October 2025 to eTIMS registration.

To succeed in this automated environment, businesses must ensure harmony across all records. All data points – financial statements, eTIMS invoices, WHT records, and customs records – must tell the same story to avoid costly mismatches.

The Supreme Court has overturned a Sh34 billion exposure against Standard Chartered Bank in a long-running dispute with clothes maker-Manchester Outfitters over a loan borrowed in 1982.

In a landmark decision, the apex court held that a debenture and other securities remain valid and enforceable for both the original and subsequent loans, ensuring that the original security agreements continue to apply for future advances unless they are formally discharged.

The verdict, delivered on Friday, reversed a December 2022 Court of Appeal decision that had directed Standard Chartered Financial Services Limited to pay Manchester Outfitters (now King Woolen Mills Limited) damages, after it appointed receivers for the firm and later auctioned its property over a defaulted Sh9 million loan.

The appellate court had reasoned that Standard Chartered should have sought fresh securities when the foreign currency loan was converted into Kenya shillings. It held that the appointment of the receiver-manager and the subsequent auction were irregular, leading to a damages award that grew to Sh34 billion, according to submissions made by lawyers in court.

However, the apex court overturned the decision noting that the bank did not need to obtain new securities following the conversion of the loan to Kenya Shillings.

‘It is our considered position that a bank or financier is not required, as a matter of law, to register fresh securities every time a new advance is made, where existing securities remain valid and undischarged, unless the terms provide otherwise,’ the court said.

The Supreme Court clarified that lenders are not required to register fresh securities when loans are converted into local currency. The apex court added that charges and guarantees are only cleared when the proper documents are signed and the charge is removed from the register.

The dispute dates back to 1982, when Manchester Outfitters borrowed a loan from Standard Chartered Merchant Bank (SCMB), London.

To secure the loans, Standard Chartered Financial Services Ltd guaranteed the loan in favour of SCMB, while Manchester Outfitters provided additional securities.

On October 7, 1986, Standard Chartered Financial Services took over and settled the foreign loan, converting the outstanding balance into a local currency loan of Sh9 million.

The appellate court had reasoned that Standard Chartered should have sought fresh securities when the foreign currency loan was converted into Kenya shillings. It held that the appointment of the receiver-manager and the subsequent auction were irregular, leading to a damages award that grew to Sh34 billion, according to submissions made by lawyers in court.

However, the apex court overturned the decision noting that the bank did not need to obtain new securities following the conversion of the loan to Kenya Shillings.

‘It is our considered position that a bank or financier is not required, as a matter of law, to register fresh securities every time a new advance is made, where existing securities remain valid and undischarged, unless the terms provide otherwise,’ the court said.

The Supreme Court clarified that lenders are not required to register fresh securities when loans are converted into local currency. The apex court added that charges and guarantees are only cleared when the proper documents are signed and the charge is removed from the register.

The dispute dates back to 1982, when Manchester Outfitters borrowed a loan from Standard Chartered Merchant Bank (SCMB), London.

To secure the loans, Standard Chartered Financial Services Ltd guaranteed the loan in favour of SCMB, while Manchester Outfitters provided additional securities.

On October 7, 1986, Standard Chartered Financial Services took over and settled the foreign loan, converting the outstanding balance into a local currency loan of Sh9 million.

East African cities such as Nairobi, Kampala and Dar es Salaam are witnessing an expansion of digital infrastructure on a scale not seen before. Banks are embracing cloud computing; governments are digitising public services and mobile platforms have become the default channel for millions of citizens.

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These innovations will help people get into the economy and work better. But now, the region must deal with a new reality.

When important services depend on digital infrastructure, any threat to the infrastructure is not just an IT problem. It is a public and economic risk. This has elevated cyber risk to a core government and boardroom issue.

Globally, cybersecurity strategies are shifting to meet these new realities. The NTT DATA Technology Foresight 2025 report highlights ‘accelerated security fusion,’ an approach that integrates real-time analytics, AI-powered threat detection and advanced security tools into unified systems.

For East African enterprises, this model offers a way to overcome persistent challenges of fragmented infrastructure and limited resources.

Traditional perimeter-based security approaches are no longer sufficient, especially in an era of hybrid work and cloud-driven operations.

A zero trust architecture – where every access request is treated as untrusted until verified – provides a more dynamic and effective way of managing risk.

Artificial intelligence is at the centre of the new cybersecurity battlefield. On the one hand, AI-driven behavioural analytics can detect anomalies that point to insider threats or compromised accounts.

Local banks, phone companies or even county governments can now put in systems that watch for strange patterns in real time. These systems can look for suspicious transactions that may show fraud or money laundering. On the other hand, AI is a double-edged sword.

The same tools that defenders use to detect anomalies can be exploited by attackers to craft highly convincing phishing messages or automate intrusion attempts. In a region already grappling with a shortage of cybersecurity professionals, the risk of falling behind in this AI-powered arms race is significant.

Addressing these challenges requires collaboration. Cyberfusion centres, which bring together threat intelligence, incident response and risk management, offer a proactive model for security.

While building such centres may appear beyond the reach of many East African firms, regulators, industry players and technology providers can collaborate to create shared intelligence frameworks and sector-wide defences. Information-sharing and joint capacity-building initiatives could help spread best practices across borders, reducing the asymmetry between attackers and defenders.

At the same time, the region must prepare for tomorrow’s risks. The coming era of quantum computing poses an entirely new frontier of danger, with the potential to render current encryption standards obsolete.

For institutions managing sensitive data – such as national ID registries, financial systems or health records – preparing for post-quantum security is no longer theoretical; it is a present-day necessity. Similarly, identity protection must evolve.

Biometrics, multiple-factor authentication and continuous verification must be part of user experiences. This will ensure protection without making it harder to use. Cyber risk should also be elevated firmly into the boardroom agenda, with directors treating it as a core business issue rather than a back-office technical matter.

Technology alone, however, cannot secure East Africa’s digital future. Human capital is equally critical. Closing the cybersecurity skills gap requires investment in training, university programs, industry partnerships and regional centres of excellence. Just as important is public awareness.

Many breaches still begin with a simple human error – a careless click on a phishing link or a weak password. Getting people to do small but helpful things, like making it easier to log in with more than one password or reporting suspicious emails, can help the region become more resilient.

Securing our digital world is not only a technical challenge – it is a societal responsibility. Governments, businesses and individuals must all play their part. East Africa’s digital future is filled with promise, but that promise will only be realised if it rests on a foundation of trust, resilience and security.

The question is not whether the region will face another breach, but how prepared it will be when that breach comes. The time to act is now. By adopting advanced strategies, collaborating across sectors and investing in both technology and talent, East Africa can stay ahead in the cyber arms race and secure a digital future that benefits all its citizens.

Kenya Electricity Generating Company (KenGen) has set aside Sh1.37 billion to cover for expected defaults from suppliers led by Kenya Power, which owed the generator Sh16.65 billion in June.

Latest disclosures show the allowance for impairment hit Sh1.37 billion in the year ended June 2025 from Sh774.71 million in the preceding financial year, on the backdrop of rising debts from its key commercial customer-Kenya Power-and non-commercial clients.

KenGen’s latest financial statements show the power producer increased the impairment allowance by 78 percent to Sh830.99 million, on the Sh16.65 billion due from Kenya Power as at end of June this year. The non-commercial clients category has been backed by a provision of Sh545 million, up 76.9 percent from Sh308 million a year earlier with the receivables closing June at Sh1.27 billion from Sh982.42 million.

A large share of the Sh1.27 billion overdue balance is from two firms, including a foreign entity, which collectively owe Sh890 million.

The Auditor-General Nancy Gathungu said in an audit report that most of KenGen’s receivables exceed the typical 30-90-day credit window, with delays mainly attributed to weak contractual terms that do not enforce timely settlement.

‘The extended outstanding receivables are attributed to weak contractual terms with clients which do not sufficiently safeguard timely payment,’ said Ms Gathungu.

‘Delayed collection of receivables would negatively affect the company’s cashflows and working capital position, while the prolonged outstanding balances increases the risk of bad debts, which may require additional provisions and results in financial losses. The situation could also impact on the company’s ability to fund operations and meet its obligations when they fall due.’

KenGen has a credit period of 40 days with Kenya Power and 30 days for other customers, after which they are considered as credit impaired.

These are assessed for impairment on a continuing basis and an estimate of doubtful receivables is made based on a review of all outstanding amounts at the year end.

The Kenya Power debt jumped slightly from Sh16.62 billion, as difficulty by KenGen to receive money from its main customer within the agreed 40-day credit period persisted.

The audit report shows Kenya Power’s actual payment cycle averages 113 days.

The delays in payment have forced KenGen to increase its loss allowance as Ms Gathungu cautions that late collections and weak dispute-resolution mechanisms could strain its working capital and heighten the risk of write-offs.

‘In the circumstances, failure to collect receivables in optimal time and lack of an effective regular resolution of reconciliation items leading to delays in settling of the outstanding amounts, negatively impacts the company’s working capital which could lead to future disputes and eventual risk of impairment,’ says Ms Gathungu.

Under the non-commercial category, the audit singles out an engagement with the government of Djibouti where there are contractual obligations to KenGen under the Galla-le-Koma Geothermal Project.

Ms Gathungu noted that even though the Djibouti government, through its embassy in Kenya, reaffirmed commitment to pay once donor funds are released, ‘the existence of an effective enforcement mechanism of payment and debt recovery strategies could not be confirmed.’

Kenyan banks’ are facing increased loan default risks as their impaired loan ratio -which stood at 17.6 percent as of June- is expected to remain high into 2026 due to large outstanding public-sector arrears.

The pending bills have adversely impacted borrowers’ debt servicing capacity, global rating agency Fitch warns.

The agency says the industry’s impaired loans are unlikely to decline materially, until substantial progress is made in reducing the outstanding public sector debt in arrears, which is likely to remain elevated in the short term despite efforts to improve public financial management. ‘Impaired loans are unlikely to decline materially until substantial progress is made in reducing the outstanding public sector debt in arrears, which is likely to remain elevated in the short term despite efforts to improve public financial management,’ the agency says in a statement dated November 12.

‘Delayed government payments have significantly strained borrowers’ ability to service debt, which was further pressured by the pandemic and, more recently, by exchange-rate volatility, high inflation and interest rates.’

An impaired loan ratio is a measure of a bank’s asset quality, calculated by dividing its non-performing loans (NPLs) by its total gross loans. It indicates the share of a bank’s loan portfolio that is at risk of default, providing a key measure of potential credit risk.

A higher ratio suggests a greater risk in the bank’s loan portfolio. Increased provisions for NPLs reduces banks’ profit margins and dividends for shareholders.

Fitch says the rise in the Kenyan banking sector’s impaired loans ratio in the last 10 years from 6.8 percent in 2015 to a peak of 17.6 percent at the end of June this year, has been heavily influenced by large public-sector arrears to contractors and service providers.

Kenya’s pending bills owed to contractors and suppliers have continued to grow, with unpaid obligations increasing to Sh524.84 billion by June 2025, up from Sh516.27 billion earlier in the financial year, according to figures from the office of the controller of budget.

Fitch however says the banking sector’s high pre-impairment operating profit (profit before setting aside money for loan losses), will be sufficient to comfortably absorb the loan impairment charges, while allowing for increased capital and loan growth.

In the nine months to September this year, the banking industry’s impaired loans to gross loans stood at 17.1 percent, a slight decline compared to 17.6 percent in the first half ( January-June ) of the year. In 2023 and 2024, the ratio stood at 15.6 percent and 17.1 percent respectively.

An impaired loan is a loan where there is clear evidence of a loss, meaning the lender expects to lose some or all of the money they loaned out.

This happens when a borrower is unlikely to repay the loan in full, and the lender has to recognise this potential loss in its financial statements.

According to Fitch, the banking sector’s total loan loss allowance coverage of impaired loans was 59 percent at the end of June this year, reflecting some reliance on collateral and recoveries.

The net impaired loans were 23 percent of the banking sector’s total equity in the first half of this year but risks to capital are mitigated by high pre-impairment operating profit which provides a large buffer to absorb loan impairment charges while allowing for capital accretion and increased loan growth.

‘Though pre-impairment operating profit as a percentage of gross loans is expected to fall due to higher loan growth and net interest margin pressure from lower interest rates, it will remain sufficient to comfortably cover loan impairment charges,’ the agency says.

Of the four Fitch rated banks – KCB, NCBA Bank Kenya, I and M Bank Ltd and Stanbic Bank Kenya Ltd- KCB had the highest impaired loans ratio of 21.3 percent in the first half of this year (2025), followed by NCBA Bank (13.2 percent), I and M Bank (12.9 percent ) and Stanbic Bank Kenya Ltd (9.5 percent).

‘All four banks’ pre-impairment operating profit (ranging from an annualized 8 percent of average loans in [first half of 2025] to 10 percent) provides a large buffer to absorb potential loan impairment charges,’ says Fitch.

Fitch says high interest rates have suppressed demand for credit while credit supply has been constrained by the weak credit landscape and comparatively favorable yields on government securities due to high government issuance, which incentivized banks to deploy funds into treasury bills and bonds.

‘As a result, forex-adjusted loan growth was anemic in 2024 and second half of 2025 (one percent in each period), which contributed to the sector’s elevated impaired loans ratio,’ it says.

The decline in the banking sector’s impaired loan ratio to 17.1 percent in the nine months to September this year was partly driven by resumed loan growth.

The central bank started easing monetary policy in August 2024 in response to moderating inflation and exchange rate pressures and has since cut the Central Bank Rate (CBR) by a cumulative 375 basis points (bp) to 9.25 percent, including by 200bp in 2025.

‘A stable macroeconomic environment and lower interest rates will improve borrowers’ debt servicing capacity, given that most loans are issued at floating rates. It will also support accelerating loan growth in the banking sector, which we forecast in the mid-single digits in second half of 2025, increasing to double digits in 2026,’ says Fitch.

‘These themes will support a continued modest decline in the banking sector’s impaired loan ratio in 2026.’