Category: Business Daily

Big houses do not always bring families closer. Many parents are realising that the more space children have, the less time they spend together. Developers are now rethinking how homes are built so that families can see each other, talk, and share daily life.

Sakina Hassanali, co-chief executive officer and creative director at Hass Consult, says one of the greatest challenges developers face today is designing homes that intentionally foster physical connections among family members.

She notes that families’ time together has been eroded by the increased use of gadgets, creating a mission among home designers to rethink spaces in ways that bring people back together. One approach has been to structure smaller bedrooms-especially for children-so that they are encouraged to spend more time in common areas rather than isolating themselves.

‘We are trying to fix this digital disconnection in society by effecting change within families through the designs we create in houses,’ Ms Hassanali explains. ‘We deliberately make children’s bedrooms smaller, even uncomfortably small, while enlarging and connecting the common areas. The kitchen, dining, and lounge flow into one another so that mum, dad, and the children can all be in one space. They may be doing different things, but there’s a sense of togetherness.’

Psychologists have praised this approach as ingenious, agreeing that intentional design can increase family interaction.

They argue that many parents have mistakenly equated giving children more private space with good parenting, when in reality it has sometimes undermined family bonds.

‘Millennial parents, in particular, are struggling with how they were raised. In trying to compensate, they give their children what they themselves lacked-including private space. But this often spoils the relationship and weakens interaction,’ says Collins Odhiambo, a parental coach and educator.

He points to house designs where children’s bedrooms are equipped with televisions and other amenities. ‘Once a

child enters the house-especially preteens and teenagers-there’s little interaction. They only come out to eat,

and, in some homes, even meals are left open-ended; you eat when you’re hungry,’ he observes.

Mr Odhiambo concurs that smaller bedrooms, which push children into shared spaces, are healthier for family life, but he stresses that parents must also take intentional steps to interact with their children. He advises placing children’s bedrooms close to the parents’ to encourage monitoring and spontaneous encounters. ‘That lack of space is actually an advantage to child development. It builds personality as siblings bump into each other, and it ensures unavoidable interaction between parents and children,’ he says.

In apartments, developers are extending this philosophy to entire communities, creating opportunities for residents to connect through activities such as running clubs, dance classes, poetry nights, health talks, and book clubs. ‘We are piloting a residence experience manager in one of our projects to organise weekly events,’ Ms Hassanali adds.

She admits the new design approach is not driven by market demand but by research and societal need. ‘Sometimes

you take feedback from the market, but other times, the market does not know what a better design looks like. This is

a proactive approach, and once buyers experience it, it quickly becomes the new standard,’ she says.

House construction, she emphasises, is capital-intensive and a source of pride, which makes it essential to balance comfort with designs that encourage family interaction. Mr Odhiambo agrees, noting that even those with large houses must be intentional about family time. Rules around shared meals and gadget use, he says, can go a long way in strengthening bonds.

The fate of more than 300 newly recruited employees of the Kenya Ports Authority (KPA) now hangs in the balance after human rights organisations moved to court seeking to nullify the entire recruitment exercise.

In their filings submitted on Friday, May 15, the petitioners are citing alleged violations of constitutional principles of transparency, fairness and accountability. They say the exercise was conducted in secrecy, lacked disclosure of key information and may have been influenced by extraneous considerations.

One of the major complaints is that KPA allegedly failed to publish the list of shortlisted candidates, a move the petitioners say undermined transparency from the outset.

‘This omission made it impossible for applicants and the public to verify whether the process was inclusive and

competitive,’ said Mr Hussein Khalid, director of Vocal Africa.

The petition has been filed jointly with Muslims for Human Rights (Muhuri) and She Rises Organisation.

They have sued KPA, the Public Service Commission (PSC) and the Attorney-General. Eight individuals affected by the recruitment have also been listed as interested parties.

The petitioners argue that a public institution of KPA’s stature is expected to operate within strict accountability frameworks, especially when dealing with mass recruitment exercises attracting thousands of applicants.

They raised concerns over the use of virtual interviews without adequate disclosure of evaluation criteria or publication of outcomes for unsuccessful candidates, saying this created uncertainty and eroded confidence in the integrity of the exercise.

The petition further alleges that individuals who neither participated in the interviews nor appeared on the shortlist were nonetheless issued with employment offers, pointing to possible irregularities.

The petitioners also accuse KPA of failing to comply with Article 35 of the Constitution on access to information, saying formal requests for disclosure of recruitment data, including shortlisted candidates, interview results and final appointment lists, were ignored.

Concerns have also been raised about possible violations of constitutional requirements on regional balance and inclusivity. Petitioners claim successful candidates may have been disproportionately drawn from certain regions, raising questions about compliance with national diversity principles.

They further argue that failure to issue regret letters to unsuccessful candidates amounted to procedural unfairness, leaving applicants in limbo without communication of outcomes.

They are now seeking sweeping court intervention to halt and overturn the recruitment exercise. Among the orders sought are a declaration that the process is unconstitutional and void, an order compelling KPA to conduct a fresh recruitment in

compliance with constitutional and statutory standards, and a directive requiring full disclosure of all recruitment records.

They also want declarations that failure to publish successful candidates, issue regret letters and communicate outcomes amounted to violations of the constitution.

However, the Centre for Litigation Trust is dismissing the petition as malicious and time-barred.

Executive director Julius Ogogoh instead wants efforts channelled towards development, governance and

national cohesion rather than disputes.

‘The recruitment exercise concluded in February, so why bring a case now? Those who were recruited are Kenyans and deserve to serve in the positions they applied for,’ Mr Ogogoh said.

Kenya’s economy is still growing, but the latest numbers from the Economic Survey 2026 suggest that the nature of that growth is changing.

Beneath the headline GDP figures lies a more complex story: growth is slowing, investment remains relatively weak, informality continues to dominate employment, and the economy remains heavily dependent on imports and household consumption.

Real GDP growth slowed from 7.6 percent in 2021 to 4.6 percent in 2025. While this still represents positive expansion, the economy is no longer experiencing the strong post-pandemic rebound seen earlier in the recovery cycle.

Estimates of the output gap also suggest that the economy is operating slightly below potential, implying that productive

capacity is not being fully utilised.

This matters because slower economic momentum directly affects jobs, incomes, business activity, and revenue performance.

The most important story in the KNBS data is that Kenya’s economy is increasingly being driven by consumption rather than investment.

Private consumption consistently accounts for about 72-74 percent of GDP, making household spending the dominant engine of growth.

Government consumption contributes another 13-14 percent. By contrast, gross fixed capital formation (GFCF)-which captures investment in machinery, infrastructure, buildings, factories, and productive assets-remains relatively modest at

about 18-20 percent of GDP.

This is a critical signal. Economies that sustain rapid industrialisation and productivity growth typically maintain significantly higher investment rates.

Kenya’s relatively low level of fixed capital formation suggests that while consumption remains resilient, investment in future productive capacity is not expanding at the same pace.

In practical terms, the economy appears to be growing more through spending than through large-scale expansion of productive sectors.

The composition of growth reinforces this pattern. Private consumption contributed between 3.5 and 5.4 percentage points to annual GDP growth during 2022-2025, making it by far the largest growth driver. Investment contributed only

about one percentage point annually, while imports consistently reduced growth, reflecting Kenya’s continued dependence on imported goods, fuel, machinery, and intermediate inputs.

At the same time, the labour market remains overwhelmingly informal. Informal employment rose to 18.1 million workers in 2025 and now accounts for approximately 84 percent of total employment. Nearly 60 percent of informal employment is concentrated in wholesale and retail trade, hotels, and restaurants.

This means that although the economy continues to generate jobs, much of the expansion is occurring in low-productivity and weakly formalised sectors.

This has major implications for incomes, productivity, and economic formalisation. A highly informal economy limits the

growth of formal wage employment, reduces pension coverage, weakens financial inclusion, and lowers the visibility of economic transactions.

It also means that a relatively narrow group of formal sectors carries a disproportionate share of economic and fiscal activity. Sector data illustrates this imbalance clearly. Financial services contribute disproportionately to economic activity

relative to their size, while ICT and manufacturing also demonstrate high formal-sector productivity.

By contrast, large sectors such as agriculture, transport, and parts of real estate remain comparatively weakly formalised relative to their contribution to GDP. This suggests that large parts of the economy continue to operate with lower levels

of traceability, documentation, and integration into the formal system.

Financial conditions also help explain why many businesses still perceive the economy as difficult despite continued growth. Lending rates remained elevated at 14.8 percent in 2025, even after monetary policy easing began.

High borrowing costs continue to constrain private sector expansion, particularly in construction, manufacturing, trade, and household credit markets.

Private sector credit growth slowed sharply in 2024 before recovering modestly in 2025, indicating that financing conditions remain relatively tight. Externally, Kenya remains structurally import-dependent.

Imports reached Sh3.06 trillion in 2025 compared to exports of Sh1.69 trillion, leaving a large trade deficit and continued pressure on the current account.

Export growth has slowed sharply, while import growth also moderated significantly in 2025, partly reflecting weaker domestic demand and tighter financial conditions.

Unaitas Sacco is lining up a Sh521.56 million mixed-use development in Runda to host its headquarters, banking hall, data centre, strip mall and restaurant, marking a strategic shift toward asset-backed expansion.

The sacco, which is the sixth largest in the country with an asset base of over Sh26 billion, says the various premises including offices will be on twin towers. The mall will be three-storey while the office block will be seven-storeyed, with the entire project occupying 16,266 square metres.

The strip mall will host a Unaitas branch and retail tenants, while the office block will house its headquarters, data centre and additional office space for lease. The project signals that Unaitas plans to relocate its head office from the current Cardinal Otunga Plaza in the Nairobi Central Business District.

Unaitas, which is seeking approval from the National Environmental Management Authority (Nema) to proceed with the project, says the development will convert its idle land within the Runda area in Westlands along the northern bypass into an income-generating venture.

‘The main objective of the proposed project is to construct a mixed- use development which would serve as the proponent’s head office, data centre and a banking branch while still allowing for lettable spaces which would create room for various business, ventures and offices,’ reads the impact assessment report submitted to Nema.

The project will neighbour several developments, including the Glee Hotel that sits directly opposite the site, car selling yards that dominate the area, as well as Githogoro village and Runda Estate.

The development adds to the rising commercial activity in the Runda-Kiambu Road corridor, where projects such as Runda Mall have emerged along the northern bypass. The site is located about 300 metres from the Kiambu Road-Northern Bypass junction towards the Ruaka direction.

‘The proposed mixed-use development, therefore, has strong potential to contribute positively through direct and indirect employment through skilled and unskilled labour demand, increased commercial space, and economic stimulation of the area,’ reads the document.

Unaitas was registered in Kenya in 1993 as Muramati Sacco, originally serving tea farmers in Murang’a, Maragua and Thika before rebranding. The sacco has since expanded its membership to include small and medium-sized enterprises and salaried workers across the country, growing to become the sixth largest in Kenya.

The top five saccos by asset base as of 2024 were Mwalimu National (Sh68.89 billion), Stima (Sh66.51 billion), Kenya National Police (Sh59.83 billion), Harambee (Sh38.7 billion) and Tower (Sh28.04 billion).

Unaitas’ asset base hit Sh29.6 billion in 2025 from Sh26.1 billion in the previous year, with deposits of Sh15.8 billion from membership of over 458,000.

The High Court has declined to compel the Jomo Kenyatta Foundation (JKF) to deposit Sh109 million in an interest earning account for a disputed debt owed to a printing firm.

Printing Services Ltd was contracted to print and produce various JKF titles. Other than that, Printing Services acts as a key reference point to verify authentic JKF publications to weed out fake issues.

The court observed that JKF had demonstrated financial distress, as evidenced in a letter to the National Treasury showing revenues dropped from Sh1.3 billion to Sh121 million though the period over which sales declined was not defined.

The court said compelling the company to deposit the amount as sought by the publisher would effectively shut it down before any dissolution process begins.

It also lifted an injunction stopping plans to wind up or divest from JKF which is owned by the government. ‘In the foregoing, I find that the plaintiff’s (Printing Services Ltd) application dated 30th April 2025 has no merit and it is dismissed but with no order as to costs,’ said the court.

Printing Services Ltd stated in the application that JKF had admitted the debt in writing in a letter on January 13, 2025, but has failed, refused, or neglected to pay.

The printing and publishing firm asked the court to compel JKF to deposit the amount and place a temporary injunction restraining the government from implementing any decision to dissolve, wind up, or divest from the State corporation.

In an affidavit, Printing Services Ltd director Dhillon Malkiat Singh said failure to pay the money was causing serious financial strain, impairing its ability to pay employees and sustain operations.

He stated that through a Cabinet memo on January 21, 2025, the government proposed the dissolution or divestiture of JKF, and if that happened without paying the debt, the publisher would have no legal entity to sue for recovery, rendering any future judgment useless.

JKF opposed the application through its managing director, David Kamau Mwaniki, saying the orders sought were premature and illegal.

Mr Kamau argued that compelling a State corporation to deposit money in court or an escrow account violates constitutional principles as all expenditures must be approved by the National Treasury and Cabinet Secretary.

Nurses and midwives are the steady hands in emergencies, the calm voices in crisis, and the constant presence at life’s most vulnerable moments.

Yet beyond the applause lies a harder truth: too few professionals are carrying too much of the burden.

Beneath the surface, many nurses are at breaking point; working under intense pressure in underfunded systems, navigating rising patient expectations, frequent litigation threats, public scrutiny on social media, inadequate staffing, limited supplies, delayed salaries, and at times even workplace violence. These realities rarely make it into the celebratory speeches.

Nurses and midwives form the backbone of healthcare delivery. According to WHO, they make up nearly half of the global health workforce. Yet demand for care continues to outpace supply. Population growth, the increasing burden of chronic diseases, and the lessons of the Covid-19 pandemic have exposed just how thinly stretched this workforce has become.

The numbers are sobering. Globally, there is an estimated shortage of about five million nurses, with sub-Saharan Africa accounting for about 89 per cent of this gap, despite having only about 3.0 percent of the world’s 27.9 million nurses.

In Africa, the density stood at about 17.78 nurses per 10,000 people (2020). In Kenya, the situation is even more constrained. The country has about 12 nurses and midwives per a population of 10,000, far below the WHO’s recommended ratio of 30.5 per 10,000.

These shortages translate directly into unsafe nurse-to-patient ratios on the ground. In Kenya, a single nurse may attend to 30-60 patients per shift in outpatient or general wards.

In maternity units, one midwife may simultaneously manage three to five labouring mothers, far above safe standards of one-to-one care during active labour. These are not exceptional cases; they are daily realities, particularly in rural and under-resourced settings.

The causes are well known yet insufficiently addressed. First is the allure of opportunities abroad. Better pay, safer working conditions, and clearer career pathways continue to attract Kenyan nurses and midwives to high-income countries. While migration is a personal right, its cumulative impact leaves local systems depleted. Referral hospitals have lately experienced waves of resignations as staff leave for overseas employment.

Secondly, burnout is taking a heavy toll. Long working hours, emotional strain, and understaffing are pushing many out of the profession.

Applause cannot compensate for exhaustion. Those who remain feel demotivated, forced to work in survival mode rather than delivering optimal care.

Third, training capacity has not kept pace with demand. Limited faculty, infrastructure, and clinical placement opportunities constrain how many professionals can be trained each year.

Even with the growth in training institutions, output still falls short of national and global needs. Finally, recruitment into the public sector often lags behind reality.

Equity Group Holdings has reported a 23.8 percent growth in profit after tax for the first quarter ended March 2026, riding on cost-cutting, as the listed lender’s asset base crossed the Sh2 trillion mark despite a slowdown in lending.

The lender with operations in Kenya, Rwanda, Uganda, Tanzania, South Sudan and the Democratic Republic of Congo (DRC) reported a profit of Sh18.3 billion, up from Sh14.8 billion.

The profit jump followed a 19 percent drop in interest expenses to Sh10.7 billion from Sh13.3 billion a year earlier, despite a 12 percent expansion in deposit base to Sh1.48 trillion from Sh1.31 trillion.

This followed a faster cut in deposit rate paid to customers than the price charged on loans, resulting in wider interest margins, especially in Kenya. The bank’s net interest margin (difference between its lending and deposit rate) in Kenya expanded to 8.4 percent from 7.4 percent.

The group’s interest income grew by 4.5 percent to Sh43.7 billion from Sh41.8 billion even as its loan book expanded 8.5 percent to Sh873.4 billion.

The growth in loan book has however been slow resulting in the bank holding half its assets base, Sh1 trillion, in cash and near cash instruments.

‘If you add cash and cash equivalent with government securities, it means out of the 2 trillion, Sh1 trillion is available for disbursement. We have Sh150 billion going into cash and cash equivalent demonstrating our readiness and capability to fund growth and to support our customers because of being cash rich,’ said James Mwangi the group’s chief executive.

The bank’s loan to deposit ratio declined to 47 percent from 53 percent signalling slower conversion of liabilities to assets. This is especially so in Kenya where the bank’s liquidity ratio rose to 81 percent, against a statutory requirement of 20 percent, indicating it was holding excess cash.

Despite a cut in interest rates credit uptake in Kenya has been slow to pick up, with private sector lending up 8.1 percent in March, as business and individuals hold for an improved economic environment.

Equity groups operating costs grew by 4.3 percent despite a 34.6 percent jump in staff costs, signalling a tight rein in other operational expenses.

Jump in staff costs follows salary hikes in the second half of last year as the lender sought to align to industry levels following years of lagging behind.

The lender cut provisions held for bad loans by 16.9 percent as its bad debts declined following a write off of Sh27.4 billion in the year ended December 2025.

‘We are cognisant it is best practice to write off loans when they are not performing so that you remain a clean balance sheet -you recognize losses as they occur,’ said Mr Mwangi.

Other operating expenses declined by 9.6 percent which management attributed to increased use of self-service digital banking.

‘Customers are moving away from channels that have variable costs (for example ATMs and agents), like the way they moved away from fixed channels, to self-service and that tells you more about the efficiencies we are likely to move to have when you remove fixed cost and variable cost’ said Mr Mwangi.

The Kenyan unit recorded a 20.8 percent profit growth to Sh10.3 billion to remain the group’s most profitable business.

Tanzania in which the subsidiary injected an additional capital of Sh4 billion last year recorded the fastest profit growth in the first quarter, up 150 percent, to Sh1 billion.

DRC recorded a 32 percent net profit growth to Sh5 billion while Rwanda grew 36 percent to Sh2.5 billion.

Uganda was the only subsidiary to record a profit drop of 20 percent to Sh800 million, following a decline in net interest rate margins to 8.4 percent from 9.2 percent.

The group’s insurance business recorded a 53 percent increase in profit before tax to Sh636 million riding on premium growth.

Taxpayers are facing a Sh390 million payout to an Indian consultancy firm that designed the multi-billion shilling Mwache Dam project at the Coast after the Attorney-General lost a legal battle over unpaid consultancy fees and interest.

The High Court ordered the government to settle a 14-year-old debt owed to Consulting Engineering Services (India) Private Limited for feasibility studies, designs and tender documents prepared for the flagship water project.

The court rejected the government’s attempt to disown the consultancy contract, ruling that signed agreements, project addenda, processed invoices and official correspondence proved the State had fully recognized and implemented the deal.

The award relates to consultancy services for the Mwache Multi-purpose Dam in Kwale County, a Sh20 billion flagship water project meant to ease chronic shortages in Mombasa city and surrounding areas and now targeted for completion in 2027.

The dam, co-financed by the government and World Bank, is expected to supply 186,000 cubic metres of water daily to the Coast region and support irrigation and flood control once completed.

While allowing a claim filed by Consulting Engineering Services (India) Private Limited, the court ordered the government to pay the firm $3,017,908 (Sh389.3 million), together with interest pegged on the London Interbank Offered Rate plus two percent.

The court ruled that the Ministry of Regional Development Authorities had entered into a valid consultancy contract with the firm but failed to honour payments.

Court records show the ministry awarded the consultancy tender to the Indian firm on May 31, 2010, at a contract sum of $4.3 million for feasibility studies, detailed designs and tender documents for the Mwache Dam project.

The contract was later revised upwards through two addenda. The first addendum, signed in 2012, introduced additional irrigation works worth $431,346 while the second, signed in 2013, added services linked to World Bank sponsorship valued at $1.24 million.

The consultant told the court it completed the feasibility report in September 2011 and later submitted final study reports and tender documents in February 2017. It said it raised 19 invoices under the contract but the government only paid eight invoices amounting to half the contract value, with the last payment made in December 2012.

The company accused the ministry of ignoring repeated payment demands despite several written acknowledgments admitting the debt.

In defence, the Attorney-General and the ministry denied the existence of a valid procurement contract and argued that no lawful tendering process had been undertaken.

An emerging trend where private land gets ‘grabbed’ through deliberate duplication of ownership documents should stop. The government should move into action to forestall further damage to our economy, and faith in property rights.

Records in courts and narratives in local dailies reveal that the trend started a while back, but may have scaled up, lately.

These remind us about the famous private land grab which involved multiple claims to some 134-acre prime land in Karen, Nairobi, which went public in 2014.

The saga was quite sensational and sucked in several MPs and senior public officers, who had allegedly benefitted from the purported ‘subdivision’ and ‘allocation’ of plots derived from the land.

The subsequent court case included several private and public entities, as the legitimate land owner fought back. Luckily, the purported beneficiaries stepped back before they could construct on ‘their’ plots. The court ruled on the matter early last year, throwing out all other claims, and asserted the rights of the original owner.

Fast forward to 2026. Last week saw Kenyans treated to high drama as huge expensive residential units within some disputed property in the Marurui neighbourhood of Nairobi were demolished. The scale of the demolitions was alarming.

It triggered demonstrations on the Northern bypass which led to the obstruction of traffic and interference with businesses around Marurui on the material day.

As the legitimate owner held onto the original ownership documents, someone else obtained a parallel set, and proceeded to subdivide and sell the resultant sub-plots. The buyers went on to construct their dream homes. The original owner sued.

After years of legal contests, the court restored the rights of the original owner, and ordered the eviction of other claimants. Regrettably, pricey houses had to be brought down.

More drama is playing out over the land that is home to ‘Paradise Lost’ off Kiambu Road. Reportedly, there are multiple claims to the land. Some entity has procured a title that seemingly overlaps another, and later to a ‘subdivision’. The resultant sub-plots are reportedly on sale.

But the matter has moved to court, with the original owners seeking to assert their ownership. It may run for years. But the lessons from the incidents above should inform. Buyers beware! Furthermore, the County Government of Kiambu should carefully consider whether to approve or suspend any development proposals presented against such contested land.

These few examples are perhaps indicative of a wider problem where private land rights are getting deliberately targeted for ‘grabbing’. The model involves irregularly creating a new layer of ownership rights to overlap the existing and legitimate one.

Where deliberate, this indicts the integrity and reliability of gatekeepers of state land records.

The government should urgently investigate, punish those involved, and close the gaps and weaknesses through which such irregularities are advanced.

Oil marketers have voiced concerns about the government’s last-minute decision to reduce diesel prices by Sh10 per litre through a Sh2.7 billion subsidy, as well as its failure to clear arrears from previous subsidies.

They said the government’s failure to clear arrears from the previous subsidies has triggered a cash crunch in the industry.

Industry executives said oil marketers were not consulted on the decision to increase the diesel subsidy, which they claim adds to the nearly Sh20 billion in unpaid arrears that are hurting their cash flows.

The government’s decision increased the diesel subsidy to Sh24.57 per litre, reducing prices to Sh232.86 in Nairobi.

Despite the government agreeing to lower the diesel price by about Sh10 a litre, negotiations on Monday, the first day of the strike, failed to reach an agreement.

The public transport strike over fuel price hikes triggered by the Iran war was called off on Tuesday, after the government reached an interim agreement with the lobby representing bus and minibus owners to pause the protests for seven days.

Last night’s decision will cost Sh2.7 billion in additional subsidy, bringing to Sh16.6 billion the subsidy bill for the two monthly cycles since April 15, with the industry now jittery on when the debt will be paid.

‘They did not involve us in the talks. As an industry, we are assessing the situation from a working capital perspective. We were kept in the dark about it and they just sent emails on the price changes via SupplyCor,’ said an executive.

‘The subsidy is obviously bigger given the additional Sh10 per litre of diesel. Monies owed to us are piling and seemingly the government does not care if we have the means to finance the product,’ said the executive.

SupplyCor is the secretariat for oil marketers in Kenya and liaises with the Ministry of Energy and Petroleum and the energy regulator to coordinate importation of fuel and also the monthly computation of prices.

‘On the matter of the subsidy alone, between last month and this month, the government has applied some Sh13.9 billion to manage the cost of fuel. Last night’s reduction by Sh10 on the cost of diesel took some Sh2.7 billion,’ Energy and Petroleum CS Opiyo Wandayi said on Tuesday.

Besides the Sh16.6 billion for the two months, oil marketers have cited an additional subsidy debt of Sh1.7 billion, which has been verified but is yet to be paid, and another Sh9 billion awaiting verification.

Delays in settling the subsidy arrears have been blamed for the erratic fuel supply, which has hit the country since last month, as oil marketers grapple with thinning capital against the costly fuel.

Stations owned by major retailers such as Vivo Energy and Rubis Energy Kenya and dozens of others outside the major cities, have been grappling with erratic supplies since last month.

The inconsistent supplies have been blamed on thinning working capital, which has made it increasingly difficult to get fuel from the system of the Kenya Pipeline Company (KPC).

Oil marketers must pay fuel taxes upfront before evacuating their product from the KPC system, laying bare the tribulations that have forced many to seek bank loans and others to shut down.

The government has, in the past, been unable to pay subsidy arrears owed to oil marketers, underscoring the fear currently building up in the industry.

In 2023, the government floated a bond to clear a Sh45.8 billion debt that had piled up under the fuel subsidy scheme. The industry says the government is mishandling the fuel prices crisis, raising questions on the apparent lack of prior engagement even before the new prices were announced on May 14.

‘The government can engage specific players, but this should have happened well in advance to get ways of moving forward and look at all options,’ said another executive.

‘With the bigger subsidy, the industry under-recovery is getting worse; you have a new problem now.

The government is opening more debt, and they are failing at the technical aspects of this crisis,’ added an industry insider who requested anonymity.

Higher landed costs of fuel mean that oil marketers are using more cash to buy the same volumes of fuel. The need for increased funding has forced many to seek bank loans, while the smaller ones are being forced to shut down operations.

Another industry executive says that marketers will increasingly find it difficult to buy products given that the additional subsidy and delayed compensation will eat into the working capital, making it hard to pay for the expensive fuel.

‘What this does is that the industry will plunge deep into chaos unless the government moves quickly and clears the money. The subsidy debt has deprived marketers of billions of shillings to pay for fuel and taxes, and this is seen in the erratic supplies,’ said another executive.

Oil marketers are waiting with bated breath to see the measures the government will deploy to lower pump prices within the next seven days.

Public service transporters, who led the nationwide strike on Monday, agreed to return to the road as talks

continue with the government over the costly fuel.

Transporters hiked fares significantly from last week in response to the spike in diesel prices and it remains to be seen whether they will lower the fares in the wake of Tuesdday’s move to suspend the strike.