Category: Business Daily

‘Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world’ — Albert Einstein.

What is more important – What you know, or how you think about what you know? Can an often absent minded theoretical physicist teach us anything practical about making our struggling enterprise a success? Can using Einstein’s thought experiments be a practical tool, contributing to bottom line profitability?

Albert Einstein, born in 1879, was a theoretical physicist who transformed our understanding of space, time, gravity, energy and matter with several revolutionary ideas.

In 1905, his thinking on special relativity showed that space and time are not absolute, they depend on the observer’s motion. E = mc² has become one of the world’s most well known equations, based on the idea that mass and energy are different forms of the same physical quantity.

In 1915, his general relativity thinking defined gravity as not simply a force pulling objects together; it is a result of the curvature of spacetime. He received the 1921 Nobel Prize in physics for his significant contributions to quantum theory, including his explanation of the photoelectric effect.

But Einstein’s importance goes beyond individual discoveries. What stands out is his distinctive way of thinking about reality.

Einstein’s great contribution was not simply the theories of relativity. It was how he thought. Before doing the complicated mathematics, he often used thought experiments; imaginary situations that stripped away distractions and asked: What would actually happen if we changed one fundamental assumption? That way of thinking has surprisingly useful applications in Kenyan business.

Start with an imaginary situation

Einstein famously imagined himself riding alongside a beam of light. Instead of accepting existing assumptions about space and time, he asked what the world would look like from a radically different position? In business we can do the same, instead of asking: ‘How can we improve our sales?’ reframe to ask: ‘Imagine we had to build this business from scratch today. What would we do differently?’ This removes the invisible road blocks created by history and forces one to focus on the key constraint.

Changing your business perspective is an absolute requirement. Einstein’s relativity thinking teaches that observation depends partly on the observer’s frame of reference. What does this problem look like from another observer’s frame? Even within a company how finance, operations, sale and marketing, supply chain or HR look at a problem can be radically different. Try looking at the business through the eyes of customer, new staff member, competitors, or a supplier.

Change just one assumption

Einstein’s thought experiments almost always challenged fundamental assumptions. You are what you do today, not what you say you will do tomorrow. Might be better to shift from an addiction to planning-trying to predict the future- to running a series of tiny low risk business experiments, until the answer emerges.

Einstein’s method was powerful partly because he pushed situations to their logical extreme. Time to ask some deliberately provocative questions. For instance, What if our biggest customer disappeared tomorrow? What if our product had to cost 50 percent less? What if we could not hire another employee for three years? What if customers hate our existing product?

Try extreme thought experiments

Down through history, scientific breakthroughs relied on experiments. Leading edge companies are constantly experimenting, asking difficult questions.

Aim is to create a mental laboratory like aC Lab. Purpose isn’t to predict the future. It is to discover the assumptions that ordinary business planning leaves untouched. Einstein wasn’t interested merely in describing what happened. He wanted to understand the underlying principles producing what happened.

Business systems are often complex where it is just about impossible to know what is going to happen in a particular situation. We get trapped in the symptoms, where the real aim should be to try and understand the rough outlines of how the system works.

What is the fundamental relationship that is producing this pattern? A thought experiment might be: ‘What happens if we stop trying to acquire more customers and instead double purchase frequency among existing customers?’ Imagine removing something fundamental. Think about value addition by subtraction. If we had to drop our current business model, how would we serve the customer?

Thought experiments can expose ‘business relativity’. Catch is, there is an important distinction, physics has laws that can be tested objectively. However, [unfortunately] business does not have universal equations comparable to Einstein’s formulas.

Too many variables at play with human beings responding to incentives, culture, competition, technology and expectations. So business thought experiments don’t produce ‘truth’ in the same way physics does – but they do produce better questions and move into action smart approaches.

Deeper lesson is that Einstein’s method suggests a radically different approach to management: Don’t begin by asking, What should we do? Begin by inquiring: What would have to be true for this problem to look completely different?

That question forces managers out of the existing comfortable frame. It turns the approach from: Let’s improve what we already do into: ‘Let’s investigate whether we are thinking about the problem correctly.’ Imaginative think like Einstein approach to management is — change the frame before trying to solve the problem.

For a market created to help address the climate crisis, the biggest challenge may not be a shortage of carbon credits. It may be whether businesses, investors and governments can trust what those credits represent. As climate finance grows, the value of a carbon credit will increasingly depend on the credibility of the emissions reduction or removal it represents.

This is becoming an important consideration for businesses seeking to meet climate commitments while managing financial and reputational risks.

A company can purchase thousands of credits, but that investment becomes difficult to defend if the underlying project is later found to have overstated its climate impact. The question is therefore shifting from how many credits a company can buy to whether those credits can withstand scrutiny.

That challenge is particularly significant because the carbon market remains fragmented. Different registries track the issuance, transfer and retirement of credits, making it difficult to establish whether the same emissions reduction has been counted more than once. Concerns over poor-quality offsets have consequently weakened confidence in parts of the market and made transparency increasingly important.

Singapore’s support for the Climate Action Data Trust, or CAD Trust, illustrates how the market is responding. The platform links and harmonises information from major carbon credit registries to improve tracking throughout the credit life cycle. Within a year of its launch, six registries representing about 85 percent of carbon credits issued to date had joined the platform, providing a more integrated view of the market.

For businesses, this infrastructure is more than a technical improvement. Better tracking can reduce double-counting risks and strengthen the credibility of climate claims. It can also help financial institutions and investors assess risks and identify credible opportunities in an increasingly complex market.

But transparency alone will not determine which credits succeed. Buyers are also becoming more interested in whether projects deliver measurable and lasting climate benefits. Credits could therefore become less interchangeable, with value increasingly tied to project quality.

The recent agreement between Royal Bank of Canada and Chestnut Carbon provides an example of this shift. RBC agreed to purchase Improved Forest Management credits from Chestnut, directing carbon-market funding toward privately owned forests while supporting practices intended to improve forest health and maintain carbon storage. The transaction reflects growing corporate interest in nature-based carbon removal.

The commercial implications are significant because quality can influence price. Higher-rated Improved Forest Management credits have been commanding a premium over lower-rated credits, showing that buyers are increasingly willing to pay for stronger evidence of additionality, permanence and carbon storage. For businesses, the cheapest credit may therefore not be the most valuable if its climate claims carry greater reputational or regulatory risk.

This could create opportunities for landowners and project developers where forests and other natural assets have traditionally generated limited income. Carbon finance can provide an additional revenue stream that makes conservation and responsible land management more commercially attractive. When keeping a forest standing becomes economically competitive with clearing or exploiting it, climate action becomes part of an investment decision rather than simply an environmental commitment.

The challenge is ensuring that this capital reaches projects capable of delivering credible outcomes. That is where international frameworks such as Article 6 of the Paris Agreement become important. Singapore’s recent agreement with Laos establishes a framework for developing and transferring carbon credits while introducing mechanisms designed to prevent the same emissions reduction from being counted towards the climate targets of both countries.

For Laos, the arrangement could help attract international finance into emissions-reduction and sustainable development projects. For Singapore, it expands access to high-integrity carbon credits while supporting its ambition to become a regional hub for carbon trading and climate finance. It also shows how governments can connect private capital with climate projects across borders.

The wider business lesson is clear: markets attract capital when participants understand the rules, can assess risks and trust the assets being traded. Carbon markets are no different. Stronger systems for verification, tracking and accountability should make it easier for businesses and financial institutions to commit capital with greater confidence.

This presents a significant opportunity for Africa. The continent has substantial natural capital, including forests, wetlands and other ecosystems that could support carbon-removal and emissions-reduction projects. But attracting investment at scale will require more than identifying these opportunities; countries will need credible systems for measuring climate outcomes, protecting communities, tracking credits and demonstrating that the benefits sold to international buyers are real.

This also changes how businesses should view climate strategy. Carbon credits should not simply be another purchase made to meet an emissions target or demonstrate environmental responsibility. Companies will increasingly need to consider where their climate spending goes, what outcomes it supports and whether those outcomes can withstand scrutiny from investors, customers, regulators and the wider public.

The carbon market is entering a more demanding phase. Transparency platforms are strengthening its infrastructure, buyers are placing greater value on quality, and governments are developing frameworks to facilitate cross-border climate finance. For companies and investors, this creates both an opportunity and a responsibility to distinguish credible climate assets from those carrying greater risk.

The future of carbon markets will not be determined simply by how many credits are issued or traded. It will depend on whether the market can convincingly demonstrate that each credit represents a real climate benefit and that the capital behind it is delivering value. Carbon may be the commodity being traded, but trust is increasingly becoming the asset that determines its worth.

Most spouses talk about work at home, sometimes sharing frustrations, office gossip and even sensitive details about their employers. But what happens when a workplace secret crosses that line and lands in a spouse’s inbox?

A global reproductive health organisation has lost a $530,679 (Sh68 million) counterclaim against an executive who shared confidential workplace emails with her husband during a dispute over her job.

The International Planned Parenthood Federation (IPPF) accused Aissata Tounkara Epse Sangare of breaching confidentiality and exposing the organisation to reputational damage, but the Employment and Labour Relations Court found no evidence that the disclosure caused the organisation any financial loss.

Sh9.3 million salary

The dispute began in April 2023 as Ms Sangare lost her job as head of operations at IPPF Africa in Nairobi.

She joined the organisation on June 14, 2021, earning a monthly salary of $72,110 (Sh9.3 million), plus other benefits. IPPF Africa says it is headquartered in Nairobi and works through member associations across sub-Saharan Africa.

Its website says the federation works in more than 150 countries and provides sexual and reproductive health services and advocacy.

On April 12, 2023, Ms Sangare received a letter declaring her position redundant and notifying her that her application for another position had not succeeded.

Her employer calculated separation benefits, but extended her service for six months on a non-renewable basis.

The next day, her husband emailed current and former staff, calling for investigations into alleged violations of staff rights and fair labour practices.

IPPF was offended by the email and began disciplinary proceedings against Ms Sangare, which culminated in summary dismissal for gross misconduct.

The court found that Ms Sangare had forwarded internal emails to her husband. They included strategy material, a confidential audit report, financial correspondence, expense reports, travel tickets and staff contact details.

Ms Sangare admitted forwarding the material without written authorisation. She argued that her husband was not a stranger to IPPF because he had maintained professional links with the organisation.

Evidence showed that the husband had assisted IPPF with its Nairobi office, helped with contacts and supported induction into local procedures. He had also recommended another employee for appointment. IPPF maintained that he was not its employee and remained an unauthorised third party.

Ms Sangare argued that the material formed part of whistleblowing about alleged financial mismanagement involving one of the employees. She cited concerns over housing benefits, use of an official vehicle and fuel, and failure to account for expenses.

IPPF said employees had a Safe Report system and other channels for raising concerns. Ms Sangare acknowledged knowing the policy but said the reporting channel did not work properly.

The court rejected the whistleblowing argument.

‘The claimant did not use the appropriate procedures for protected whistleblowing,’ Justice Onesmus Makau said, finding that sharing of confidential work-related information with her husband amounted to gross misconduct, therefore a valid reason warranting summary dismissal.

The court nevertheless recognised the personal circumstances surrounding the disclosures. Ms Sangare was facing the loss of her employment, which the judge noted affected her spouse and family.

‘An employee undergoing stress moments at work place is entitled to seek advice and emotional support from his/her spouse or other persons who can provide the required emotional support,’ the judge said.

Spousal support limits

‘I agree with her that losing a job is a matter that affects the spouse and the family at large as can be seen in the Redundancy letter dated April 12, 2023 and the computation of separation dues,’ the judge noted.

He, however, added that employees should use general information and avoid disclosing restricted confidential material.

The court found that the information shared included financial information, strategic plans, personnel data and internal business information not generally known outside IPPF.

Ms Sangare’s contract incorporated the IPPF Africa Regional Office Staff Handbook. The handbook prohibited employees from giving employment-related information to outside persons without written consent from the Regional Director.

It also classified unauthorised disclosure of confidential information as gross misconduct. The court also noted that the organisation’s confidentiality and information sharing policy provided that breach of confidentiality was a disciplinary offence which could result in dismissal.

‘The conduct of sharing the confidential information to a third party had the potential of exposing the first respondent (IPPF) to disrepute as observed by a former employee, one Mr Oumar Tiello in his email dated April 14, 2023. It follows that the respondent has proved by evidence that the summary dismissal of the claimant was grounded on a valid reason,’ Justice Makau said.

The court found that the employer had established a valid reason for summary dismissal. It then examined whether IPPF had followed a fair procedure.

The process, according to the Employment Act, included investigations, a notice to show cause, a disciplinary hearing, an appeal and a final decision. Ms Sangare challenged the panel’s composition, arguing that it lacked African regional representation.

She was represented by a lawyer during the disciplinary hearing. A different panel heard her appeal and upheld the dismissal.

She moved to court seeking $304,162 (Sh39.2 million) in employment-related claims, compensation for unfair termination, redundancy, repatriation and school costs. However, the court only awarded $7,414 (Sh956,406) for unused leave, plus interest and costs.

The court ruled that the dismissal was lawful. Ms Sangare lost the redundancy package of $89,730 because the redundancy had not taken effect before the misconduct dismissal.

She also lost a claimed $19,000 (Sh2.5 million) repatriation package and $92,770 (Sh12 million) in school fees costs. The court said she had not proved the school expenses and noted that those benefits were linked to termination without employee fault.

Sh68 million counterclaim

IPPF sought $530,679 (Sh68.2 million) through a counterclaim for breach of confidentiality and privacy.

The court accepted that the claimant had breached the confidentiality obligations by sharing her employer’s confidential information with her husband, but found no proof of actual loss.

It noted there was no evidence that partners or stakeholders had ended relationships with IPPF because of the disclosure.

The court drew a workplace and family boundary, ruling that an employee may seek personal advice from a spouse during a difficult employment dispute, but confidential documents remain subject to workplace rules.

The judgement also showed how a redundancy dispute can change course when an employer alleges misconduct before the redundancy takes effect.

Payment providers such as M-Pesa and Airtel Money can invest customer deposits in government securities and interest-bearing bank accounts amid growing calls for the firms to share the interest earned with the wallet holders.

The National Payments Systems Bill 2026 allows providers to keep investing deposits in these securities, potentially generating sizeable returns from the trillions of shillings deposited and moved through the platforms annually.

The leading mobile money platform M-Pesa transacted Sh41.7 trillion in the year to March 2026.

These funds do not sit in customer wallets for prolonged periods due to the movement via transactions, but still provide a sizeable deposit base for the trust account.

The deposits are usually held in trust accounts at various commercial banks and are ring-fenced from other uses.

This ensures the Central Bank of Kenya (CBK) regulates and oversees the customers’ money and keeps it separate from Safaricom operational funds.

Under the current regulations, the income earned from the trust account deposits can only be channeled to public charitable use, which includes poverty relief activities, advancement of education, human and religious rights, and protection of the environment.

Former CBK governor Patrick Njoroge is calling for an amendment of the payments regulations to enable the owners of the funds to earn a share of the returns generated by the deposits when they are invested in bonds and fixed deposit accounts.

In his submission towards the new Bill, the former governor said that the deposits remain the financial property of customers, from which they should earn a bonus after the netting off of the expenses of the trust.

‘This aligns with the reality of wallets as customers’ legal financial property and the practice in other countries such as Tanzania, Uganda and Ghana,’ said Dr Njoroge in his submission.

‘Kenya’s payment service providers have from the outset channelled these returns into charitable causes, a practice that remains a holdover from the industry’s nascent phase. Expectations that the total holdings in wallets would be small were overtaken and fears about competition with banks have dissipated.’

However, the regulations require that the balances in the trust account should not be less than what is owed to the customers.

The payment service provider is also required to submit to the bank holding the trust account customer information indicating the number of beneficiaries and aggregate amount attributable to the beneficiaries.

This would come in handy when estimating the surplus available for potential bonus distribution to wallet holders, or for charitable uses.

Dr Njoroge’s sentiments on the use of excess funds in the wallets come amid an increase in the services and usage of mobile platforms beyond the traditional sending and receiving of cash.

Businesses and individuals are increasingly utilising mobile money platforms for savings and investments, resulting in a larger float of cash sitting in their wallets compared to those using them for cash transactions only.

Part of the rationale for the new Bill is to improve the interoperability between payment service providers, through sharing of data and allowing their platforms to communicate and share funds securely with each other.

This would make it easier for Kenyans to move money and use financial services across banks, mobile money wallets and fintech platforms, regardless of their payment service provider.

‘Each payment service provider or payment system operator shall use systems that are capable of securely sharing customer data with third parties for open finance purposes,’ reads the National Payments Systems Bill 2026.

In his submissions, Dr Njoroge said that the interoperability should extend to sharing of agents of the payment service providers.

The telecommunications sector took a significant step towards greater interoperability when Safaricom opened its M-Pesa cash tills and paybills to rivals from 2022, but a gap remained since the telco’s customers could not utilise the tills run by Airtel Money, the second-largest mobile money platform in Kenya.

Airtel Money finally opened up its cash till and paybill platform to rival firms last year, completing the efforts to open up the mobile payments segment fully in the local market.

‘The policy is silent about agent sharing, which remains a persistent concern. An interoperable agent network would allow customers to conduct cash-in and cash-out transactions at any authorised agent regardless of their service provider, while enabling agents to benefit from more efficient management of their combined float,’ said the ex-governor.

The push to have seamless transfers of cash across all facets of rival payment platforms was primarily driven by the CBK in the section of its national payments blueprint touching on telco operators.

The first phase of the strategy involved opening up direct, person-to-person cash transfers across mobile money wallets run by rival platforms, which was implemented in 2018.

The third phase is expected to usher in the interoperability of agency networks, which will allow customers to deposit and withdraw cash from any agent outlet regardless of the sponsoring telco.

After a year of uncertainty, the African Growth and Opportunity Act (Agoa) was extended through December 31, 2028 when President Donald Trump signed H.R. 6500 into law on September 2, 2026.

This is welcome news for African exporters, workers and investors whose decisions have faced prolonged uncertainty on Agoa’s future. But it would be a mistake to treat the extension as the conclusion of the Agoa debate. The more important conversation starts now.

The extension has bought Africa something it urgently needed: time. But December 2028 is barely two years away and Washington has already made clear that the next iteration of Agoa is unlikely to be a simple continuation of the programme Africa has known for more than a quarter of a century.

The US is signalling a different conversation. The Office of the US Trade Representative has called for a modernised Agoa that delivers greater market access for American businesses and more reciprocal trade. Congressional leaders have also pointed to reform, strategic supply chains, critical minerals and US economic and national security interests. Africa should take those signals seriously.

For much of Agoa’s history, the central negotiation has been about preferential access: which countries qualify, which products enter duty-free and how long the programme will last. The period to 2028 offers an opportunity to answer a bigger question: What should the next US-Africa economic partnership look like?

That question cannot be left to Washington to answer. Before Agoa expired in September 2025, the case for a transitional extension was that it would preserve existing trade while creating space to negotiate for longer-term reform. Africa should now negotiate with a clearer understanding of what it wants and what it brings to the table.

First, that conversation should begin with competitiveness, not preference. While duty-free access matters, market access alone does not make a firm competitive. African exporters still contend with high energy and logistics costs, limited trade finance, infrastructure gaps, standards challenges, weak supplier networks and productivity constraints.

The next two years should be treated as an industrial competitiveness window. Countries need to identify the sectors where US market access can support investment, jobs and value addition, then address the constraints holding them back. The objective for Africa should not be simply to preserve today’s exports but to enter 2028 with stronger industries.

Second, the same window should be used to rethink how Agoa interacts with the African Continental Free Trade Area (AfCFTA). Agoa has historically operated largely through national eligibility, while Africa is simultaneously trying to build regional value chains and a continental market. The next framework should recognise this changing economic geography.

A garment exported from one African country should be able to incorporate more inputs produced elsewhere on the continent. The same principle should apply increasingly to pharmaceuticals, agro-processing, automotive production and other value chains where competitive production may require capabilities spread across several economies. This way AfCFTA can provide the scale and regional production networks, while access to the US market provides additional demand that helps those networks become commercially viable.

Third, Africa needs to approach reciprocity differently. It may be tempting to view Washington’s calls for greater reciprocity as a threat to a preference programme designed to support African development. But the trade environment has changed. The US is increasingly framing trade through market access, economic security, strategic supply chains and competition with China. Congress has made that explicit in linking the latest extension to critical minerals and reducing US dependence on China.

Africa should therefore enter that conversation with its own proposition. The continent holds resources important to global energy and technology supply chains. It offers opportunities for diversified sourcing and has growing markets for American goods, services, technology and investment.

Africa should be equally clear about what it seeks in return. Its ambition should extend beyond market access for African commodities to include investment in processing and manufacturing, technology transfer, stronger supply chains, trade finance and greater participation by African firms in the value created from African resources.

Critical minerals illustrate the choice. A future US-Africa trade relationship centred on securing African minerals for processing elsewhere would reproduce an old economic model under a new geopolitical rationale. A stronger partnership should use US demand and investment to build more processing and industrial capability in Africa itself.

Fourth, Africa needs to arrive at the negotiations with greater coherence. Agoa eligibility remains national and countries will naturally have different interests. But on questions such as AfCFTA alignment, regional rules of origin, value addition, critical minerals and the broad principles of a future US-Africa trade relationship, fragmented negotiating positions weaken Africa’s hand. The African Union, AfCFTA institutions, governments and the private sector have work to do before 2028.

Industry must be close to the process. Firms know where preferences are working, where investment is being held back and which changes would alter sourcing and production decisions. The past year has reinforced a familiar lesson: trade-policy uncertainty has a commercial cost. Investment decisions are made years ahead.

Factories, supplier networks and industrial infrastructure cannot be planned confidently around repeated eleventh-hour extensions. Whatever succeeds the current arrangement should therefore provide a longer investment horizon.

Agoa future success should not be measured by whether Africa preserves the same programme indefinitely. After more than a quarter of a century, market access should increasingly be used to build productive capabilities that make African firms competitive with or without preference.

By the time 2028 arrives, Africa should not find itself in Washington making the same argument for another temporary extension. It should be negotiating from stronger industries, deeper regional markets and a clearer proposition about the economic partnership it wants with the US.

More than a quarter of petroleum shipments under Kenya’s Government-to-Government (G-to-G) deal were sourced from hubs in India and Europe in the year to June 2026, amid disruptions that forced Gulf oil majors to seek alternative loading points outside the Middle East region following the US and Israel war against Iran.

Kenya inked the G-to-G deal with Aramco Trading Fujairah FZE (Aramco), Abu Dhabi National Oil Company (ADNOC), Global Trading Ltd and Emirates National Oil Company (Singapore) Private Limited (ENOC) in March 2023 to import fuel on a credit period of 180 days.

For close to two years, supplies from Aramco, ADNOC and ENOC were mainly loaded from ports in the Arabian Gulf, but the US-Israel war with Iran forced a change in the logistics pattern to avoid attacks on vessels on the Strait of Hormuz, the vital maritime choke-point that connects Gulf waters and the wider Indian Ocean beyond.

Analysis of new data by the Energy and Regulatory Authority (Epra) shows that Kenya sourced 25.26 percent of its G-to-G products from hubs in India and Europe in the year to June.

In the period, Nairobi sourced 14.43 percent of its G-to-G fuel stocks, or 1,137,173.34 cubic metres, from India, 7.7 percent from Belgium and a further 3.13 percent from the Netherlands.

Petroleum products destined for Kenya were lifted from Antwerp-Bruges in Belgium, Sikka in India, and Jizan on the coast of the Red Sea-marking a shift from the past, where Kenya mainly relied on fuel loaded at ports in the Arabian Gulf.

Epra data shows Kenya imported 7,880,619.18 cubic metres of refined fuel for the local market in the year ended June 2026, with 62.6 percent of this sourced from the United Arab Emirates (UAE) and Saudi Arabia.

‘Kenya imported 7,880,619.18 cubic metres through the G-to-G importation framework from various loading ports in the Middle East, India and Europe,’ Epra says.

The UAE and Saudi Arabia, which are Kenya’s traditional major sources of refined fuel, accounted for 31.85 percent and 30.7 percent of the total fuel imported in the year.

The Epra data shows that Oman and Kuwait are the other sources of fuel destined for Kenya, accounting for 9.26 percent and 2.98 percent of the 7,880,619.18 cubic metres that the country imported under G-to-G in the year under review.

But sourcing from these traditional bases was thrown into jeopardy after Iran blockaded the Strait of Hormuz in retaliation for attacks from the US and Israel that started in February this year.

The Sikka Port in Gujarat, India, Port of Antwerp-Bruges in Belgium and Port of Amsterdam have since March last year become critical in Kenya’s efforts to ensure uninterrupted supply of fuel in the wake of the logistical nightmare caused by the Middle East war.

For example, in March this year a ship loaded with a consignment of petrol was unable to leave the port of Jebel Ali in the wake of the attacks along the Strait of Hormuz.

Kenya was then forced to import emergency stocks to avert a stockout, highlighting the nightmares that the Middle East conflict poses to Kenya and other fuel-importing economies.

Kenya’s reliance on India, Belgium and the Netherlands as alternative hubs is likely to be prolonged in the wake of the fresh flare-up of the conflict.

The conflict had eased in May this year after the US and Iran agreed to a 60-day ceasefire in June this year as part of wider efforts to de-escalate the conflict and allow re-opening of the Strait of Hormuz.

However, the two resumed attacks on each other last month, leading to the temporary closure of the East-West pipeline that Saudi Arabia relies on to export fuel following the closure of the Strait of Hormuz.

Nearly 25 percent of the oil and liquefied natural gas for use globally passes through the Strait of Hormuz, underscoring the critical role of the strait in supplying the critical commodity across the world.

Regulated savings and credit society cooperatives (saccos) reduced the volume of bad loans by Sh10.42 billion in the year ended December 2025 to Sh60.45 billion in the prior year, reflecting improved loan recovery and enhanced loan appraisals.

This comes even as industry stakeholders say the high cost of living and increased taxes on salaried workers are weighing heavily on sacco members’ loan repayments.

Latest disclosures by the Sacco Societies Regulatory Authority (Sasra) shows the volume of non-performing loans (NPLs) in Deposit taking (DT) saccos fell from Sh63.75 billion to Sh51.47 billion, while that of Non-Withdrawable Deposit-Taking (NWDT) saccos reduced from Sh7.13 billion to Sh6.9 billion in the same period.

The proportion of total non-performing loans (NPLs) to gross loans called the NPL ratio amongst DT-saccos declined by 2.2 percentage points from 8.56 to 6.36 percent, while that of NWDT-saccos declined by 0.63 percentage points from 7.07 percent to 6.44 percent, according to the authority’s Sacco Supervision Annual Report (2025).

Gross loans and advances by deposit-taking saccos increased by 12.98 percent to Sh840.99 billion from Sh744.36 billion ,while those of the NWDT-saccos grew by 6.87 percent from Sh100.75 billion to Sh107.68 billion.

‘Encouraging is the observation that regulated saccos reported significant improvement in the quality of their loan books as compared to 2024,’ says Jack Ranguma, the authority’s Chairman.

Industry stakeholders, however, say a tough operating environment characterised by high cost of living and multiple government taxes are weighing heavily on the operations of saccos, impacting loan repayment by the members.

‘Lately, saccos have been opening up to the business community and the business environment is a little volatile,’ Harambee DT Sacco Chairman George Ochiri said.

‘Two, the government has waged competition to the saccos in terms of levies and taxes (on payslips). What remains for the saccos and the other statutory bodies is little.’

Mr Ochiri added that saccos are constantly restructuring.

‘That is the situation. The membership of saccos is aging. That means new members with huge deposits are getting fewer by the day. The senior members want to maintain their membership but do not have a lot of ambition,’ he said.

‘Those are some of the issues but the general economic outlook, especially in Kenya, has been a bit tight in the last few years.’

According to Mr Ochiri, recovering loans from guarantors is the last option of a sacco since the guarantors themselves are feeling the pinch of a tough economy. They cannot make any additional contribution.

‘I’m referring to the taxes the government imposes on salaried people. There has been no meaningful salary increment in recent years, especially at the civil service level. There is no pay increase in the private sector. That is the quagmire. What remains to be shared between the pocket of the member and the sacco has shrunk,’ he says.

‘In many cases, we restructure the loans in order to cushion guarantors from the vagaries of the harsh economy. That is why making guarantors pay is the last resort.’

There are 357-regulated saccos consisting of 179 deposit-taking and 178-non-withdrawal deposit-taking.

Sacco membership also continued to expand in the period under review, increasing to 7.87 million in 2025 from 7.39 million in 2024.

The regulator said the steady growth demonstrates the enduring confidence Kenyans continue to place in saccos as part of the domestic financial service providers.

Commercial banks increased lending to the agriculture sector by a record Sh53.1 billion in the year to June 2026, as stronger farm incomes and improved cash flows made the traditionally risky sector more attractive for credit.

Agricultural credit rose 35.1 percent to Sh204.2 billion, making the sector the fastest-growing major destination for private-sector loans during the period, the Central Bank of Kenya data shows.

The jump was more than three times the 10.6 percent growth in total private-sector credit, which expanded by Sh409.7 billion to Sh4.29 trillion in the review period.

The credit flows in the 12 months to June 2026 were stronger compared to the previous period. Lending rose by Sh16.9 billion in the year to June 2025 and Sh12.3 billion a year earlier.

The growth in loans to agriculture signals a shift in how lenders view a sector long considered difficult to finance because farmers’ incomes are tied to rainfall, harvest cycles and unpredictable commodity prices.

Trade recorded the largest absolute increase at Sh157.2 billion, taking outstanding credit to Sh854 billion, but its 22.6 percent growth was well below agriculture’s 35.1 percent expansion.

Finance and insurance lending grew 34.2 percent to Sh190.7 billion, while building and construction increased 29.1 percent to Sh206 billion, leaving agriculture with the strongest growth among major sectors.

Banking industry players say improved cash flows have made it easier for farmers and agricultural businesses to borrow and service loans, giving lenders greater confidence to extend financing across the wider value chain.

KCB Group CEO Paul Russo said farming was also gradually moving away from dependence on rainfall toward production models that can generate more predictable income.

‘The funding is seasonal and is harvest-linked, and so it is not long-term,’ Mr Russo told investors in August. ‘There is a bit of agriculture moving out of rain-fed and is starting to demonstrate cash flow and sustainable model for you to repay. That is a significant change, particularly in Kenya.’

KCB reported a 67.8 percent climb in agricultural financing in the year to June, the fastest growth among the sectors covered by the lender.

Agriculture accounted for 6.2 percent of KCB’s Sh1.181 trillion loan book in June, showing that while farming remains smaller than areas such as trade, manufacturing and personal loans, its share is expanding.

KCB Bank Kenya CEO Annastacia Kimtai attributed the increase to four years of adequate rainfall, State-backed fertiliser subsidies and strong earnings from coffee, which she said had improved cash flows for farmers.

‘For the last four years the rains have been adequate in our countr,’ Ms Kimtai said.

Equity Group is pursuing a more ambitious expansion, targeting agriculture to account for 30 percent of its loan book by 2030, up from about 10 percent.

The lender is shifting its focus from mainly short-term working-capital facilities toward mechanisation, productivity, agro-processing, value addition and export-oriented businesses.

Equity chief strategy officer Brent Malahay said longer-term financing would help expand the agricultural portfolio as the lender supports businesses across entire value chains rather than concentrating mainly on seasonal farm expenses.

The strategy covers livestock and leather, tea, coffee, cereals and aquaculture, linking production to processing and export markets.

‘As we help connect and build the value chains into agro-processing value addition, you will see the tenure of the loans increase,’ Mr Malahay said in March.

‘We have an initiative to drive productivity at the farm level, to mechanise farms and also to drive value addition, and we have an initiative also all the way to support businesses in the agricultural space to export as well.’

The increased financing comes as agriculture remains one of the country’s biggest sources of employment and economic activity, creating a large potential market for lenders seeking new areas of credit growth.

But the rapid expansion also means greater exposure to the risks that have traditionally made farming difficult to finance.

Weather shocks, changes in commodity prices and disruptions to agricultural production can weaken farmers’ ability to repay loans, potentially turning a period of rapid credit growth into higher defaults if farm incomes deteriorate.

The CBK, the financial services sector regulator, has reported an increase in non-performing agricultural loans in the first half of 2026, highlighting the risks accompanying the expansion.

When Rhys Mirindo bought a battered 1974 Austin Mini during the Covid-19 pandemic for Sh150,000, he thought he was buying an old car and a project. Four years and roughly Sh1.4 million in restoration costs later, the Mini could fetch more than Sh2 million, and perhaps as much as Sh2.5 million to the right buyer.

Mirindo, however, isn’t rushing to sell. Like a growing number of wealthy Kenyans drawn to classic cars, watches, art, jewellery and other luxury collectibles, he sees the value of these assets in more than their potential resale price. They offer something harder to put on a balance sheet: ownership, identity, history and enjoyment.

That distinction is becoming increasingly important as investments of passion gain traction among Kenya’s high-net-worth individuals (HNWIs).

Classic cars ranked third among their preferred collectible acquisitions in 2026, at 44 percent, behind watches and art.

Yet such assets still make up a relatively small share of most HNWI portfolios, suggesting that for many collectors, the emotional return remains as important as the financial one.

‘This is an investment,’ Mirindo says. ‘If somebody gave me Sh2.5 million for it, then I would probably consider it, but it is one of those cars that you become attached to.’

The Mini is one of four classics in his collection, alongside a 1968 Volkswagen Beetle, a 1977 Volkswagen Kombi fitted with a Subaru engine and a 1991 Volkswagen Syncro 4×4. His daily driver is a 2008 Mazda Demio.

Keeping the cars on the road also requires a regular budget.

Mirindo spends between Sh10,000 and Sh15,000 a month on maintenance and sources some spare parts from the UK through online suppliers. Insurance for the Mini costs about Sh8,000 a year, he says, noting that comprehensive cover for such an old vehicle is difficult to obtain locally.

Assigning value

The financial calculation, however, is not the same for every collector.

Major Leiyan Saningo, who displayed a 1979 Mitsubishi Galant at last Sunday’s Concours d’Elegance, says assigning a monetary value to some of his cars is difficult because their appeal lies in their rarity, history and personal significance.

‘They’re invaluable,’ he says. ‘We don’t really put a value to them. You can’t say this one is worth this amount because sometimes you get somebody who wants it and they are willing to pay whatever they can.’

The latest Knight Frank Wealth Report notes, ‘the strongest motivation for acquiring investments of passion remains the intrinsic satisfaction derived from ownership. For many HNWIs, these investments provide emotional, cultural, and personal value that extends beyond their monetary value. Examples include collecting classic cars that evoke nostalgia, commemorate personal achievements, or represent a lifelong passion.’

That has not stopped buyers from putting substantial figures on his cars.

Leiyan has received offers of Sh7 million and Sh8 million for one of his cars, while another has attracted interest at around Sh3 million.

‘There was a gentleman who wanted to buy one last year and he still keeps trying to convince me,’ he says.

For him, however, those offers do not change the reason he owns the cars. ‘It’s just a hobby,’ he said. ‘It’s an expensive hobby.’

His collection now numbers about five vehicles, including a 1992 Toyota Land Cruiser FJ-75 that he uses regularly. He hopes to add another classic whenever he finds one worth acquiring.

The cost of keeping older cars running can also be difficult to separate from the collecting itself. Parts are often harder to find and owners rely on specialist networks, online suppliers and fellow collectors to locate components.

Ian Leiyan, another collector at Concours d’Elegance, has a 1978 Mitsubishi Galant, alongside a Land Cruiser 76 Series, Peugeot 405, Datsun 1200 and a Land Rover Defender project car.

Unlike someone buying an asset purely for resale, he says his Galant is something he actually uses and enjoys.

‘I drive it. I service it, I check the plugs and everything,’ he says. ‘For me, it’s about the enjoyment. It’s not really an investment.’

He has also spent money restoring and maintaining the vehicle, including having the paintwork done around the Concours, but says the car is difficult to price because of its age and rarity.

Enter younger collectors

The different motivations are reflected across Kenya’s classic car community, according to Peter Wanday, chairman of the Alfa Romeo Owners Club and an organiser of the Africa Concours d’Elegance.

Peter says the market has changed considerably, with younger Kenyans increasingly taking an interest in finding and restoring old vehicles.

‘The classic car market has evolved,’ he observes. ‘Initially, it was mainly the older people who were interested in these cars. But now you are seeing younger people coming into it, restoring cars and bringing different cars every year.’

The amount collectors spend, he points out, also varies widely.

‘It is very subjective,’ Peter says. ‘You can have somebody spending a couple of hundred thousand shillings and you can have somebody spending several millions. It depends on the car, where you got it from and how much it costs you to restore it.’

But he does not see the growing spending as evidence that collectors are increasingly treating the cars as conventional investments.

‘I don’t think most collectors actually want to sell,’ he surmises. ‘Most of them want to keep the cars for as long as possible. Some of these cars have been in families for generations.’

That sentiment is consistent with Knight Frank’s findings that passion assets are not held solely for financial returns. Among Kenyan HNWIs, the report found that joy of ownership was the leading reason for holding passion investments, ahead of investment itself.

For Peter the appeal among wealthy Kenyans is partly similar to the attraction of art, coins and other collectables.

‘For a discerning Kenyan, you want something that you can hold that has some historical significance,’ he says. ‘Classic cars are like art. They have a story, they have a history and they give you that sense of community.’

Scarcity, he adds, is another factor supporting the value of certain cars.

‘It’s demand and supply. There are very few of these cars and most of the people who have them don’t want to sell them. So when somebody really wants one, they are willing to pay a lot more.’

Judging a classic

For Renzo Benardi, who was a chief judge of the classic cars event on Sunday however, a high price alone does not make an old vehicle a valuable classic.

‘Condition is the main thing,’ he said.

Judges assess the mechanical condition, exterior, interior and general appearance of the vehicles, with originality also playing an important role.

‘The closer you are to the original car, the better,’ Renzo says. ‘You have to follow what the car was originally like.’

He adds that restoration can sometimes hurt a vehicle’s authenticity when owners make changes that were never available when the model was manufactured. Age also matters because fewer examples of older models tend to survive, but Renzo emphasises that the condition of the surviving vehicle remains crucial.

He sees classic cars as an investment in Kenya ‘in a small way’, although he says the asset class is recognised more broadly around the world.

The Concours is also creating opportunities to connect Kenya’s collectors with an international automotive culture.

Italian marques

Italian Ambassador to Kenya Vincenzo Del Monaco says he has seen renewed interest in the Kenyan automotive sector, including in Italian marques such as Alfa Romeo, Fiat and Lancia.

‘There’s a renewed interest in the Kenyan sector,’ Vincenzo says, pointing to the presence of different makes and the growing interest in the event.

For him, the attraction of Italian cars goes beyond their mechanical specifications. ‘It is about technology, but it is also about beauty, creativity, tradition and fun,’ he says. ‘This is very much Kenya, but this is also very much Italy.’

Peter says that Kenya’s relatively favourable climate could also present an opportunity for the local classic-car market, particularly because cars used in European winters are more exposed to rust.

Some well-preserved Kenyan classics could therefore attract buyers abroad, creating potential opportunities beyond the local collector community.

For now, though, the people gathering at the Concours appear less interested in treating their cars like ordinary financial instruments than in owning, preserving and enjoying pieces of automotive history.

The money involved can be significant, from the Sh150,000 purchase of Mirindo’s Mini to the millions that collectors say they have spent restoring cars or been offered by potential buyers.

But for many owners, the value of a classic is not captured by the figure on a cheque. ‘It is the passion,’ Mirindo says. ‘You put money into it, but you also get the enjoyment out of it.’

Jambojet has suspended its direct flights between Mombasa and Zanzibar, citing the surge in fuel costs and the recently introduced mandatory travel insurance in Tanzania, which have made the route commercially unviable.

The Nairobi-based low-cost carrier stopped operating the route in mid-September, leaving it without an international destination after it ended flights to Goma in the Democratic Republic of Congo in January last year.

Karanja Ndegwa, the carrier’s chief executive, said in an interview that the introduction of a mandatory $44 (Sh5,708) travel insurance for travellers into the country has made it an unattractive destination for the market it serves, which largely comprises local tourists.

This left the airline with low passenger numbers on the route, which has been worsened by the surge in fuel costs, which forced the airline to introduce a 20 percent fuel surcharge on ticket prices.

‘The hotel prices also increased and with that, Zanzibar became a very expensive destination. Then numbers started shrinking. Some airlines have reduced their frequencies, and others are now operating only during the high season,’ Mr Ndegwa said in an interview.

‘Two months ago, when the fuel prices increased significantly, we did our internal calculations and realised we’re losing a lot of money [on that route], so as Jambojet we made a decision to suspend it.’

The budget airline is now left with only six routes-Mombasa, Diani, Malindi, Lamu, Eldoret, and Kisumu-all domestic destinations operated from Nairobi. It is set to launch its inaugural flight to Entebbe on Thursday, returning to the route after a six-year hiatus.

The suspension comes at a time when the low-cost carrier, a subsidiary of Kenya Airways, is planning to expand its fleet and route network, with a plan to launch direct flights between Nairobi and Dar es Salaam as well before the year ends or early next year.

Mr Karanja had told Business Daily in April that it would expand its fleet with at least two additional Bombardier DHC Q-400 aircraft by end of this year or early next year, and with them launch the carrier’s new routes to Entebbe and Dar es Salaam.

However, it remains unclear whether the carrier still plans to launch direct flights to Dar, with the impact of the rising fuel costs, which has caused it to reduce frequencies on some of its flights, and even suspend Zanzibar flights.

Jambojet launched the Mombasa-Zanzibar route on June 1, 2024, largely to serve Kenyan tourists seeking to visit the island, and offered onward connections to Nairobi and other destinations in the country.

Its withdrawal from the route leaves only two airlines operating direct flights between Mombasa and Zanzibar-RwandAir and Safarilink-while travellers to Zanzibar from Nairobi can still be served by Kenya Airways, Precision Air, and Air Tanzania.