Category: Business Daily

President William Ruto’s administration plans to standardise pricing of public infrastructure projects in a sweeping reform to tame inflated contract costs and cut wastage of taxpayer money.

The Cabinet on Tuesday approved what it called a ‘Comprehensive Framework for Infrastructure Projects Pricing’ in a bid to eliminate irregular, inconsistent and expensive processes in the implementation of public projects such as roads, bridges, dams, power plants and electricity transmission lines.

The framework will introduce a data-driven system for determining costs of infrastructure, replacing the current precedent-based approach which the government has used for decades in budgeting for public projects.

The current framework has, however, been heavily criticised for fuelling cost overruns, which have made the cost of building projects in Kenya among the most expensive in Africa.

The new practice borrows heavily from the United Kingdom, Australia and Singapore, which apply the First Principles Approach to derive project costs from fundamental input data such as materials, labour, equipment and location-specific conditions.

The Cabinet estimates the new system could cut cost overruns by up to 25 percent, helping to restore discipline in planning and execution of public projects.

‘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 after a meeting on Tuesday.

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

The Cabinet said that despite the government spending heavily on infrastructure over the past two decades, Kenya continues to suffer from cost variability, budget overruns and project delays.

These challenges are linked to reliance on outdated pricing formulas and limited market intelligence.

The looming policy shift comes barely two months after the Kenya National Highways Authority (KeNHA) announced plans to overhaul the formula the agency uses to adjust project prices for inflation, citing ballooning costs that have derailed or stalled major road projects.

The KeNHA said in September it would review the Variation of Price (VOP) formula applied to contracts after uncovering ‘unprecedented escalation of variation of prices’ that had made projects expensive and caused budgetary distress.

VOP, a standard provision in long-term contracts, adjusts a project’s cost to account for fluctuations in input prices such as labour, fuel and construction materials.

But KeNHA’s recent audit found that poor formula design, unbalanced cost weightings, and misapplied indices have led to billions of shillings in unplanned costs.

‘The authority has experienced unprecedented escalation of variation of prices in ongoing development contracts, making projects expensive and giving rise to budgetary challenges,’ KeNHA said.

A Business Daily analysis of the Treasury and Transport ministry data earlier revealed that 26 major infrastructure projects – primarily under KeNHA and the Kenya Urban Roads Authority -overshot their original combined budgets of Sh682.7 billion to Sh703.4 billion, a jump of Sh21 billion.

Among the affected projects are the Kenol-Sagana-Marua highway, Mombasa-Mariakani road, and Horn of Africa corridor, which have all experienced cost jumps linked to compensation delays, poor design documentation, and underestimated feasibility studies.

For instance, the cost of the Sagana-Marua dual carriageway ballooned by nearly 50 percent in just three years, from Sh6.1 billion to Sh9.1 billion, according to a March 2025 audit by Auditor-General Nancy Gathungu. The surge was attributed to omissions in the feasibility study and land acquisition delays.

Similarly, the cost of the Kenol-Sagana section rose by Sh3 billion after budget cuts by the Treasury slowed payments to landowners.

The KeNHA has since initiated a pricing audit covering seven flagship projects, including the Eldoret Bypass, Mombasa-Mtwapa-Kilifi road, and Isiolo-Mandera corridor, with a view to determining reasonable variation thresholds and preventing future overruns.

The authority will also benchmark against projects funded by development partners such as the World Bank, European Union, Exim Bank, KfW, and JICA, which typically maintain stricter cost-control mechanisms.

Grain handling company Bulkstream has opposed an application by a Ugandan importer who has sued it seeking release of its 1,514 tonnes of Ukrainian wheat unconditionally.

Bulkstream says that it entered into a bailment agreement with Pan Afric Commodities to which, as a bailee, it retains a legal lien of the wheat over accrued and unpaid handling and storage charges, which at September 30 stood at $1.1 million.

Legal lien is right to hold someone else’s property until the debt owed is paid.

Bulkstream, the only bulk grain handling facility in the country, is associated with Mombasa-based businessman Mohamed Jaffer.

In an affidavit filed in court, Bulkstream says that once a case with regard to the cargo was terminated at the Court of Appeal, it was its expectation the importer would approach them to settle the accrued storage charges.

‘The bailment agreement that stipulates payment of handling, storage and related charges has never been revoked,’ the affidavit reads.

As such, Bulkstream says it still retains the right of lien over the goods until full payment.

Pan Afric Commodities says that Bulkstream’s assertion that the dispute is founded on the accrued amount and contract of bailment is contrary to their (Bulkstream) representation to them that they cannot release the cargo due to receivership proceedings in Uganda.

Through an affidavit of Abdelateef Mohamed, Pan Afric Commodities says Bulkstream is attempting to bring irrelevant and inconsequential facts to illegally detain its cargo.

Pan Afric Commodities says it purchased approximately 2,837 tonnes of wheat which was shipped to the port of Mombasa under a charter party agreement and was subject of Bill of Lading which was issued on September 21 2018.

The court directed the case to be mentioned on February 4, 2026.

The company and its two directors Mohammed Hamid and Abdelateef Mohamed say that the wheat which was shipped in bulk form was handled by Bulkstream (formerly Grain Bulk Handlers Ltd) pursuant to instructions issued to it.

In their application at the High Court in Mombasa, the applicants say that out of the total amount purchased, some of the cargo remained in storage until Pan Afric Commodities paid the requisite import taxes and customs duties to the Uganda Revenue Authority (URA).

‘Upon clearance of customs duties with URA, Bulkstream generated discharge invoices and advised the applicants on the outstanding storage charge that would need to be cleared prior to the release of the cargo which at May 2020 stood at US Dollars 286,379.38 (Sh36.9 million),’ the application states in part.

According to the applicants, they developed a comprehensive payment plan to settle the outstanding charges.

They also claim that as they were making arrangements to make the payment, Bulkstream informed them that they could not release the goods as they had received instructions from a Receiver Manager declaring that Pan Afric Commodities was under receivership.

The applicants say that they were also informed that the cargo was purportedly under the control of the Receiver Manager and should only be released to him.

‘The Receiver Manager has not complied with express provisions of the law touching on cross-border insolvency proceedings as stipulated in the Insolvency Act and therefore the cargo is not subject to his jurisdiction,’ part of the case documents state.

The applicants argue that Mr Hamid and Mohamed being directors of the company have exchanged several correspondences with the respondent (Bulkstream) advising them that they are illegally holding the cargo since it is not under the jurisdiction of the Receiver Manager thus it should be released to Pan Afric Commodities under the provisions of the Bill of Lading.

‘In addition the Receiver Manager has attempted to have the cargo released to him using falsified customs documents which have been detected by the respondent yet they have still declined to release the cargo to the first applicant who is the legal owner and lawfully entitled to it under the Bill of Lading,’ case documents state in part.

The applicants claim that they continue to incur heavy and substantial losses in form of accumulating storage charges, declining quality of the wheat and loss of profit since it cannot sell the wheat due to the illegal detention of the cargo by Bulkstream.

Pan Afric Commodities is also seeking for an order that it is not liable to pay storage fees for the period after January 28 2021 when Bulkstream communicated to them that the goods cannot be released because they are under the jurisdiction of a Receiver Manager.

The State has revived a project to dual Kiambu Road less than four months after pulling the plug on a tender to upgrade the section through Chinese contractors.

The Cabinet has announced the revival of the project but has not indicated whether the tender would remain restricted to Chinese contractors.

The choice of Chinese contractors’ rests on the project’s financial backing by the Chinese government through the China Exim Bank.

The project sits in the government’s broader action plan to modernise the Nairobi metropolitan transport network.

‘The Cabinet also gave the greenlight to the dualling of the 23.5km Muthaiga-Kiambu-Ndumberi road to ease congestion and improve mobility between Nairobi and Kiambu counties,’ read a Cabinet dispatch on Tuesday.

‘The project will expand the existing two-lane highway into a dual carriageway, complete with bypasses, loops and access roads to increase capacity and reduce travel times.’ The Kenya National Highways Authority (KenHA) abruptly cancelled the international tender for the upgrading of the road known as B32 in late July, before the tender’s scheduled closing date of August 22, 2025.

The road agency failed to issue an explanation to the cancellation of the procurement process even after queries sent to it by the Business Daily.

The cancellation came at a time when the agency was grappling with leadership changes following the sudden exit of the then Director-General Kungu Ndung’u before the end of his term.

The project involves the expansion of the heavily used corridor linking Pangani in Nairobi to Ndumberi in Kiambu County via Muthaiga and Kiambu town.

Plans for the upgrade included a dual carriageway, road widening, improved drainage and pedestrian walkways.

Once completed, the road is expected to significantly cut travel times and stimulate economic growth between the capital and Kiambu.

Tender cancellations are not uncommon for large infrastructure projects and can arise from a variety of factors including funding uncertainties, procurement disputes, design changes, or shifts in policy direction.

The government of Kenya has commitment from China through the China Export Import (Exim) Bank to finance the cost of the capacity enhancement of the road.

The Kenya Private Sector Alliance (Kepsa) Speakers Roundtable with the National Assembly last week started with a consideration of leadership and integrity.

A big cost to business, corruption makes Kenya less attractive to investors. Various thoughts were presented, including that we glorify it, and the historical context – it was heroic to steal from the colonial state. Today, people still talk of my mzungu (white man), in reference to their employer.

One jarring point in the historical narrative is the marginalisation of northern parts of Kenya.

Spatial development followed the original Mombasa-Malaba transport corridor to the exclusion of all else. Session Paper Number 10 of 1965 promised redistribution – that gains from early investments in ‘high potential’ areas would be used to pull up the rest. Sadly, it was not to be.

Coding capital, a phrase made popular by legal scholar Katharina Pistor, refers to the role of law in making capitalism work. In accounting, an asset that is not generating cashflow and therefore wealth, is considered impaired.

The law turns property into assets, giving them their wealth-generating attributes. It creates and protects wealth. I raced from Shanzu to the LSK Nairobi Branch legal awards gala to make that case. But the points, coming as they did from a mere commoner, were lost to many!

Legal instruments; property rights, contracts, and trusts, transform ordinary property into assets. The wealth-generating attributes include priority (the right to be paid first), durability, convertibility (ability to be converted into cash), and universality.

State power is vital for enforcing those attributes. It ensures that the “coded” assets generate wealth and that the legal rights of asset holders are protected.

The creation and maintenance of property registers – such as for patents, trademarks, lands, motor vehicles, and shares is central to that enforcement.

But “coding” can exacerbate inequality by creating advantages for those with the resources and legal knowledge to code their assets, however obtained. It is how the colonialists took Kenyan resources, appropriating them for both their empire, as well as themselves, as individuals. Kenyans were perplexed to find that land they had used for centuries now belonged to another and that coercive State power was being used to enforce the rights of the new owners. Taking from such oppressors was seen as moral and just. To change that, the modern State has to right those wrongs.

That is why the restoration of the management of the Amboseli to its rightful custodians was so heartwarming. I was privileged to witness the transfer last Saturday. It was the crowning event of the 3rd Maa Cultural Festival, held at Kimana gate.

Also featuring in Shanzu meeting was the state of the economy. Most speakers agreed that though the macros are correct, many Kenyans report no money in their pockets. Some bankers argued that inflation is low because of low aggregate demand. Indeed, the economists, agreed. After all, that was the purpose of tight monetary policy.

But with inflation now contained, the refusal of banks to quickly drop lending rates to attract more household and private sector borrowing is an impediment. Without it, aggregate demand will recover very sluggishly, hence no money in our pockets.

Banks have reduced deposit rates quickly, dropped them by 3.65 percent since August 2024, compared to only 1.77 percent in lending rates during the same period.

The spread, (difference between the two rates), at 7.44 percent, is the highest it has been since August 2016, when Parliament responded with a rates cap. While no one is advocating a similar move, it is clear that Parliament may have to act soon.

Some captains of industry felt that the government is too big for the economy. Still government can sometimes innovate. Such was the case with the creation of the Kenya Tea Development Agency model.

Clever legal structuring made it possible for smallholder tea farmers to own the processing factories, thus solving the aggregation problem. Many Europeans, convinced that tea was, by necessity, a plantation crop, were amazed.

Contrast that to the livestock economy. The Branding of Stock Act 1905, was an early attempt to create a property rights register for livestock. Many amendments later, it remains inadequate, and does not solve the aggregation problem.

As a result there is disconnect between primary production (pastoralists), and slaughterhouses, most of which are owned by county governments.

Perhaps lawmakers will code livestock property rights, linking producers with slaughterhouses. As they do so, Amboseli as a pasture bank will be super

Safaricom Plc says a tariff hike would be crucial to help it break into profits in Ethiopia as its revenues in the country remain under pressure from currency depreciation.

The telcoms operator which ventured into the market in 2022 has however retained its target for profitability in Ethiopia in March 2027 as it marks a notable reduction in losses from Sh19.4 billion to Sh15.2 billion for the half year period closing in September 2025.

Safaricom is pushing for higher service charges in Ethiopia in the backdrop of a damning World Bank report that deemed telecoms investments in the country unsustainable as revenues remain depressed by low tariff rates.

The low tariff rates are exacerbated by the sharp depreciation in the local currency-the Ethiopian birr- which has left operators like Safaricom in an even deeper hole as it prices its investment and expected revenue/income targets in US dollars.

‘We remain concerned about the market repair as one cannot sustain a business made from a dollar investment in the country,’ said Safaricom’s chief finance officer Dilip Pal.

‘The return that you are expecting with the depreciation of the birr from 57 units to the dollar in July 2024 to 146 birr means you need price correction. The price levels are way too low and telecoms like us are selling their services, be it data or voice, below cost and that must change.’

A report commissioned by the Ethiopian Communications Authority (ECA) and authored by the World Bank established that low industry tariffs have disincentivised investments in the telecoms industry as potential investors seek to avoid losses.

The ECA has made reforms to increase broadband access and reduce prices, including last year’s reduction in mobile termination rates (MTR), but challenges persist including the low revenue potential for investors and biased rules favouring EthioTel- the State-owned operator.

The World Bank says the country stands to lose out on advancements to its sector if telecoms fail to generate enough revenues to justify investments.

‘Ethiopia’s average revenue per user (ARPU) remains one of the lowest in Africa at around $1 (Sh129.23) per month, reducing scope for fresh network investment,’ the World Bank stated in its report.

‘Compared to other African countries, Ethiopia still lags in 4G coverage, broadband speed and fixed internet penetration, particularly in rural and remote areas, though the gap has narrowed considerably since 2018. These gaps will not be bridged without fresh investment, and currently, neither operator is in a position to commit to this.’

Safaricom Ethiopia realised revenues of Sh6.18 billion from voice, messaging, data and M-Pesa in the six months to September 2025 with internet purchases making for the lion’s share of the topline at Sh4.1 billion.

Voice revenues stood at a lower Sh1.3 billion, messaging revenues were at Sh74.2 million while M-Pesa revenues were the lowest at Sh8.7 million, revealing the continued struggle by Safaricom to grow the use case of mobile-money services in the cash heavy economy.

The operator noted it was easier to drive data over voice based on the company’s current reach in infrastructure.

‘The reduction in MTR has been one of our key ask. This allows us to expand the on-network and off-network base, and those customers can now make calls off the network. That’s how the community gets built and we have now begun to see the scale benefit,’ said Mr Pal.

Safaricom’s Ethiopia expansion has shown promise from increased network usage with the number of 90-day active customers rising by 83.7 percent from last year to 11.15 million.

Active voice customers stand at 9.57 million, data customers are at 8.87 million while M-Pesa customers trail the pair with 3.35 million 90-day current customers.

Safaricom’s customers in Ethiopia outpace Kenyan customers in use patterns on data and are edging closer to top voice revealing the momentum of the business whose groundbreaking was in 2022.

Ethiopian users talk for an average of 145 minutes a month on Safaricom against 200 minutes for Kenyan customers, but the former tops in data use at 1.4 times with the average user buying internet packages worth 6.7 gigabytes per month.

Kenya’s livestock sector has become the latest export destination for the United Kingdom sheep and goat breeders following a new agreement granting access to the country’s growing market for high-quality animal genetics.

The deal allows the UK to export breeding material to Kenya’s estimated 46-million-head livestock industry, positioning the country as a new frontier for Britain’s livestock-genetics trade.

According to the UK government, the arrangement, valued at about £700,000 (Sh119 million) annually, will help meet Kenya’s rising demand for improved breeding stock as it works to boost food production and self-sufficiency for its expanding population.

Kenya’s sheep and goat numbers are projected to rise significantly in the coming years, creating steady demand for advanced genetic inputs that can enhance the productivity and resilience of local herds and flocks.

The agreement underscores the growing importance of Kenya’s livestock market, which is drawing attention from global suppliers of premium breeding material seeking entry into Africa’s production systems.

Announcing the deal in London, UK Food Security Minister Dame Angela Eagle said the new market access reflects international confidence in British agricultural standards and the role of trade in strengthening food-security partnerships.

‘UK livestock genetics have earned a global reputation for excellence, with countries around the world seeking our breeding stock to strengthen their agricultural sectors and improve food security,’ she said.

‘This new opportunity with Kenya demonstrates the global demand for the high quality that defines UK agriculture. This is exactly the kind of international collaboration that strengthens both our agricultural sector and our trading relationships worldwide.’

The UK Department for Environment, Food and Rural Affairs (Defra) said the access agreement reflects the success of its agri-attaché network, which works with industry to open and maintain overseas markets for British breeders.

UK livestock genetics are already exported to more than 100 countries, underpinning about 70 percent of global poultry lines and forming a key component of breeding programmes for cattle, pigs and sheep. Officials said the Kenyan opening adds to a series of market expansions for British exporters, including recent approvals in Argentina, Turkmenistan, and several countries affected by African Swine Fever, where UK breeders have pioneered the use of frozen semen to reduce disease-transmission risks.

Many are the instances when employees resign from work out of frustration but without knowing whether they have any legal recourse for the circumstance leading to their resignation.

In fact, many employees are wrongly made to believe that once they have initiated their resignation, all their claims against the employer are null.

On the contrary, the law recognises that there are special circumstances that may push an employee to resign without intending, what it refers to as constructive dismissal or termination.

Simply put, constructive dismissal occurs when an employer makes an employee’s work conditions so intolerable that the employee is left with no choice but to resign.

The employee resigns in response to the employer’s conduct at which point the employee is entitled to treat him or herself as having been ‘dismissed’, and the employer’s conduct is often referred to as a ‘repudiatory breach’.

Unlike the traditional dismissal, where the employer directly terminates the employment, constructive dismissal is initiated by employees who feel they have no choice but to resign due to the employer’s actions.

This circumstance often arise where an employer wishes to terminate an employee but elects not to. The employer then takes actions that make the employee so uncomfortable that he or she eventually quits believing oneself to have been terminated.

These actions may include demotion, stripping the employee of important duties, withholding salaries, assigning an employee duty out of the scope of their competence, unilaterally changing terms of employment or creating a hostile or punishing environment.

To establish constructive discharge, the former employee must show that a reasonable person would have resigned under the similar circumstances. For example, if a reasonable employee working under similar conditions would have tolerated the employer’s conduct, the resignation will be found unreasonable.

Likewise, if a reasonable person would have found the working conditions unendurable and would have resigned, the employee will be found to have been constructively discharged.

But it is not enough to show merely that an employer has behaved unreasonably. There must be a fundamental breach of either an express contractual term, or the implied term of trust and confidence.

Furthermore, an employee must have resigned because of the actual breach- not for some other reason. The employee should also make it clear through the resignation letter, reasons for the resignation which is a direct consequence of the employer’s conduct.

Note, however, that constructive termination does not have to arise from a series of events but may arise from one incident that goes to the root of the contract.

The incident can be interpretated as amounting to a repudiatory breach by the employer. Sometimes there is a continuing pattern of behaviour or incidents which, taken as a whole, amount to a breach even though they may not be in isolation. For example, there may be a history of discrimination and harassment. If there is a continuing pattern of behaviour, however, the last straw which leads an employee to resign should relate to the previous acts, so that added together they all amount to a clear breach of trust and confidence. It doesn’t matter if the final act by the employer is minor, as long as it is enough together with the previous series of incidents to amount to a fundamental breach.

In the case of Kenneth Kimani Mburu and Another v Kibe Muigai Holdings Limited, Nairobi ELRC Cause No. 339 of 2011, the court laid out the finer elements of constructive termination which includes; ‘The employer being in breach of the contract of employment, the breach must be fundamental as to be considered a repudiatory breach, the employee must resign in response to that breach and the employee must not delay in resigning after the breach has taken place, otherwise courts may find the breach waived.’

Employees who intend to lodge a claim for constructive termination must be careful not to appear to have waived any breach by the employer.

The waiver may be construed when an employee takes far too long to make a decision to resign from work once aware of the breach.

A waiver could also arise if an employee does something which signals an acceptance of the breach, for example, by sending an email stating that they are happy with arbitrary changes to their contract or if in the resignation letter an employee indicates that they are grateful and happy to have served the employer and they would be willing to take up future roles should an opening arise.

To prove constructive dismissal, an employee has to show that the employer created working conditions that were so intolerable that a reasonable person would have no option but to quit.

In a constructive termination claim, an employee has to prove that the job conditions were intolerable, repeated, and aggravating enough that there was no option but to quit.

However, bad working conditions are not always enough to prove unfair dismissal. Instead, the employer creates or permits an intolerable working environment.

This generally involves making significant changes to terms of engagement that create a continuing pattern of bad working conditions.

There are various protection that the law affords employees against unfair labour practices or bad working conditions. For instance, both the Constitution and the Employment Act provide that employers cannot discriminate against employees on the basis of a protected ground.

The protected grounds include freedom from discrimination based on age, sex, race, religion, and other types of discrimination that may lead to an employee opting to resign.

Further, employees are also protected against unlawful retaliation. Whistleblower laws protect employees who are constructively dismissed. This includes employees who report illegal activity, sexual harassment, workplace discrimination, or worker safety violations.

SBM Bank Kenya has posted a Sh283.41 million net profit for the nine months ended September 2025, marking a turnaround from a Sh1.34 billion net loss posted by the lender in a corresponding period last year.

SBM’s latest financial disclosures show that net interest income during the period rose 95.5 percent to Sh2.76 billion up from Sh1.41 billion last year, while non-interest income grew 29.8 percent to Sh1.54 billion from Sh1.19 billion.

The income growth elevated the bank’s earnings as it marginally lowered its operating expenses to Sh3.89 billion from Sh3.94 billion in a similar period last year. The lender’s staff costs during the nine-month period remained unchanged at Sh1.75 billion, while provision for bad debts rose 63.6 percent to Sh235.4 million up from Sh143.9 million.

‘Our performance reflects the disciplined execution of our turnaround strategy and the power of customer-led innovation. Through smarter digital platforms, relevant products, and strong partnerships, we are delivering a bold, secure, and modern banking experience,’ said SBM Bank Kenya CEO Bhartesh Shah.

We remain committed to driving inclusive financial growth and becoming Kenya’s preferred payments and savings bank.’

The profit return comes as a boost to a bank that spent the whole of last year in the red, closing with a net loss of Sh1.07 billion in a period its parent company SBM Holdings injected fresh capital worth Sh471 million.

Last year’s loss was mainly driven by a decrease in net interest income to Sh2.15 billion from Sh3.81 billion due to interest expenses rising at a faster pace than interest income.

SBM Holdings entered Kenya in May 2017 through the acquisition of Fidelity Commercial Bank for a $1 (Sh129) consideration and renamed it SBM Bank Kenya before making a $20 million (Sh2.59 billion) capital injection.

The Mauritius-headquartered lender in August 2018 also acquired certain assets and liabilities of the then-under-receivership Chase Bank Kenya for 162,158 Mauritian rupees (about Sh456,000 at current exchange rate) and added them to SBM Bank Kenya. The group made a commitment to inject $60 million (Sh7.74 billion).

The lender has been shifting focus to the affluent and entrepreneurial segments through launch of new products and investing in digital platforms.

In addition, it has entered into several strategic collaborations with fintechs and ecosystem partners to enhance capabilities of its payment solutions.

The lender is carrying in its books an accumulated loss of Sh2.38 billion.

The court has ordered car dealer Toyota Kenya to pay its former staff Sh754,116 for using the wrong procedure to sack the employee for receiving a Sh20,000 gift.

The Employment and Labour Relations Court ruled that Toyota Kenya failed to give the employee, Mr CDO, adequate time to prepare for a disciplinary hearing, which triggered his dismissal.

However, the court upheld Toyota Kenya’s argument that he violated the company’s anti-bribery policy by accepting the Sh20,000 gift.

The court awarded him Sh754,116, equivalent to four months’ salary, as compensation for procedural flaws ahead of his sacking. He had sought Sh21.5 million in damages for wrongful termination, unpaid salaries, and allowances up to his retirement age.

‘The timing and sequence of transactions point to a clear link between the customer’s payment and the amount he received through his supervisee,’ said the presiding judge.

‘It is irrelevant whether the respondent referred to the money as a ‘gift’ or a ‘bribe’; what matters is that it contravened company policy.’

Mr CDO, who had worked as a service adviser since 2005, was accused of receiving Sh20,000 in June 2018 from a customer as a token of appreciation after repairs were completed on the client’s vehicle at Toyota Kenya’s Kampala Road body shop.

Investigations revealed that the customer had sent Sh60,000 via M-Pesa to one of Mr CDO’s subordinates, who then distributed the money among five employees involved in the repair work. Mr CDO received the largest share (Sh20,000), while two others got Sh15,000 each and two more received Sh5,000 each.

As a service adviser, his role included recommending necessary services and repairs for customers’ vehicles.

Toyota Kenya argued that he breached the company’s Code of Conduct and Staff Handbook, which prohibits employees from accepting gifts or benefits exceeding Sh5,000 from third parties, including customers.

Mr CDO denied wrongdoing, claiming the money was repayment of a personal loan from a junior colleague.

However, the court dismissed this explanation as implausible, noting the timing of the transaction.

The customer had accused the employee of soliciting money to expedite the repair work, alleging that he initially demanded Sh100,000 before settling for Sh60,000.

Despite upholding the misconduct finding, the court criticized Toyota Kenya’s dismissal process.

The court noted that on July 6, 2018 he was summoned to a disciplinary hearing although the letter was backdated to July 4. He was required to attend the hearing on the very day. This left him with no time to prepare or secure a witness.

“The claimant was ambushed, and the inadequate notice impaired his defense,” the court ruled, citing employment laws requiring fair notice and access to evidence.

The court also faulted the company for failing to provide Mr CDO with the investigation report beforehand and for keeping “scant” hearing minutes that obscured whether he was given a fair chance to defend himself.

“The court is satisfied that the respondent failed to adhere to the principles of procedural fairness in terminating the Claimant’s employment,” it ruled, adding that an employee is entitled to access documents in the employer’s possession that would assist them in preparing their defence.

While rejecting Mr CDO’s claim for future salaries, the court ordered Toyota Kenya to compensate him for the flawed termination and cover legal costs.

The ruling balanced fairness and policy enforcement, upholding Toyota Kenya’s right to enforce its anti-gift policy while emphasizing that procedural fairness is non-negotiable under Section 41 of the Employment Act.

“An employee facing serious allegations must be given sufficient time to prepare,” the judgement reiterated.

The ruling highlights Kenya’s labour laws requiring employers to balance disciplinary actions with fair procedures. Companies must ensure investigations are thorough, notices are timely, and employees are allowed proper representation even when misconduct seems clear-cut.

The World Bank has listed seven laws and four policy reforms it wants implemented before it can release a Sh96.9 billion ($750 million) loan to Kenya.

The multilateral lender reckons it will release the billions of shillings once Kenya amends its Competition Act to strengthen regulations that will control the operations of firms with dominant market shares.

It wants Kenya to allow refugees to register for mobile telephony services and M-Pesa and a policy that eases urban transport decongestion and pushes city dwellers to use rail and guidelines on sustainability bonds.

The World Bank made the revelations after the Treasury said it had issued fresh conditions to Kenya, delaying the disbursement of the loan that was expected before the end of June 2025.

The lender wants full use of e-procurement to curb graft in the purchase of goods and services in government, as well as for all government bank accounts to be housed at the Central Bank of Kenya (CBK) and not spread across commercial banks.

Discussions with the World Bank continue at a time when Kenya is also engaged with the International Monetary Fund (IMF) for a new funded programme to tap additional cheap financing.

The World Bank previously froze the disbursement after Kenya failed to pass key legislation preventing conflict of interest within the public service and enhancing social protections for vulnerable Kenyans.

Kenya has since met the demands after Parliament passed a new Conflict of Interest Bill and the Social Protection Bill, both of which are now Acts of Parliament after President William Ruto assented to the legislation.

Now, the World Bank says it wants regulations supporting the implementation of the two Acts ahead of the release of the billions of shillings.

‘Outstanding prior actions include further implementation of the Treasury Single Account (TSA) and e-Government Procurement, and a framework for faster approval of County Government Additional Allocations Bills,’ a World Bank Spokesperson told the Business Daily in emailed responses.

‘(Other prior actions include) regulations to the Conflict of Interest Act, regulations to the Social Protection Act, regulations to the County Licensing (Uniform Procedures Law), amendments to the Competition Act, updated Kenya Information and Communications Regulations, the urban transport policy, amendments to the Forest Conservation and Management Act and the sovereign sustainability-linked financing framework.’

The Conflict of Interest Act seeks to stop government officials with large private sector interests from continuing to influence and benefit from public procurement, while the social protection law obligates the national government and counties to create an enhanced single registry (ESR) to deliver cash transfers to the poor and vulnerable.

Kenya has also struggled to implement both the Treasury single account (TSA) and e-procurement, placing the World Bank DPO financing at risk.

World Bank officials have held meetings with Treasury Cabinet Secretary John Mbadi and National Assembly Speaker Moses Wetang’ula to hasten the fulfilment of the trigger actions to unlock the financing.

The multilateral lender says Kenya cannot renegotiate the facility, implying that the country must abide by the agreed conditions to unlock further funding or risk the cancellation of the three-year facility.

Kenya reached a three-year DPO financing pact with the World Bank in June last year, where the multilateral made an initial Sh155 billion ($1.2 billion) disbursement.

Subsequent releases from the instrument are tied to the attainment of the policy and institutional reforms.

Kenya has programmed to receive Sh170.5 billion from the World Bank’s development policy operation (DPO) in the current financial year, with a similar amount expected in the fiscal years to June 2030.

Increased reliance on the World Bank comes as financing from the IMF remains in limbo.

Kenya remains undecided on whether it needs a new funding programme from the IMF despite initiating discussions on a new deal.

Some officials prefer that Kenya remain without a new IMF programme to wean itself off the support of the fund as it eyes upper-middle income status.

‘I don’t think we have a meeting of minds internally on why we need it (the IMF programme),’ David Ndii, the chairperson of the President’s Council of Economic Advisors, said earlier.

‘In the long haul, our goal is to transition from a lower-middle-income to an upper-middle-income country. Part of that means being more market-facing than seeking multilateral financing.’

The Treasury has not budgeted for IMF financing, previously noting the need to manage expectations on the outcome of fresh discussions.

‘We are being very cautious because before you get into an arrangement with the IMF, you can’t start assuming that you will get funding. But it doesn’t mean that we are terminating our programme with the IMF,’ Mr Mbadi said previously.

The World Bank and the IMF are Kenya’s key sources of cheap financing outside of bilateral support.

Kenya has increased its borrowing from the pair in recent years as it seeks to avoid relatively costly credit from alternatives such as Eurobonds and syndicated loans.

This has enhanced the influence of the multilateral lenders on Kenya’s policy.

The World Bank is the bigger lender of the two, with outstanding loans of Sh1.66 trillion as at the end of September 2025.

Borrowings from the IMF meanwhile stand at Sh477.2 billion.

The government is seeking to diversify its sources of cheap financing, eyeing sustainability-linked bonds (SLBs) and debt for development swaps.

The World Bank is expected to support Kenya in issuing its first SLB in March next year, which has been estimated at Sh65 billion.