Category: Business Daily

A recent Business Daily article – IMF raises alarm over static Kenya shilling versus dollar-has set off a fresh wave of commentary about the exchange-rate policy.

The International Monetary Fund’s (IMF) public posture and press coverage are important and deserve scrutiny.

However, before concluding that exchange-rate ‘stability’ is automatically wrong or costly, it is worth taking a clear-eyed, evidence-based look at the facts on the ground.

In short, there is nothing intrinsically wrong with a stable currency.

On the contrary, a stable foreign-exchange environment can be a sign of well-functioning markets and effective central bank policy. It helps traders, importers and exporters plan, reduces hedging costs, and limits the inflationary pass-through from imported prices. The suggestion that stability alone is a problem risks fixing what is not broken.

It is important to start with the IMF’s public statements. An IMF staff team visited Nairobi in late September or early October 2025 to assess Kenya’s macroeconomic position and discuss a possible Fund-supported programme.

The Fund emphasised the need for macroeconomic stability, debt sustainability and market-based exchange rate flexibility as routine elements of its advice.

At some public forums and press accounts, IMF staff and some media characterised the shilling’s behaviour as ‘too stable,’ implying that the exchange rate may not be responding sufficiently to market signals and could be complicating monetary policy transmission.

Nevertheless, there are important nuances that were either omitted or not sufficiently emphasised in this account. First, the IMF’s standard policy advice that exchange rates should be primarily market-determined is a general principle, not a one-size-fits-all edict.

Secondly, the mere observation that an exchange rate is stable is not, by itself, proof of harmful intervention or of lost competitiveness.

To find the underlying cause of it, one has to examine the reserves, market liquidity, the composition of capital and current account flows, and whether monetary policy is achieving its objectives. On the face of these metrics, you begin to see where that stability is coming from.

A few critical facts should guide any assessment.

The Central Bank of Kenya (CBK) publications show usable reserves comfortably above four months of import cover.

For example, the CBK weekly and monthly bulletins report reserves and comment that usable reserves were around $12.1 billion, which is over five months of import cover in October 2025. Adequate reserves are a key buffer that allows the central bank to ensure orderly markets and to cushion shocks.

Recent government arrangements to secure oil on 180-day credit terms from suppliers materially reduce immediate dollar demand for fuel imports, which historically has exerted pressure on the shilling.

Such supply-side arrangements relieve short-term import financing stress and therefore contribute to exchange-rate stability without implying artificial suppression of price discovery.

Market quotes in 2025 repeatedly show the shilling trading in a narrow band around Sh129-130 per dollar at times, with small day-to-day movement.

A narrow trading band is not evidence of suppression by itself – it reflects the supply/demand balance in the interbank market in that period.

Taken together, these facts suggest a mixture of adequate reserves, robust forex inflows (remittances and services revenues), credit arrangements for critical imports, and transparent CBK market operations plausibly explain the shilling’s stability. A stable exchange rate regime can be beneficial to the economy as a whole, presenting a win-win position.

Importers, exporters, and transporters can budget, price and hedge with more confidence when exchange-rate movements are moderate and predictable.

Frequent, large swings in the exchange rate are costly: they increase the need for expensive hedges, push up working capital requirements, and discourage long-term contracts. A stable shilling, therefore, reduces frictional costs for trade.

If the IMF’s message is that markets should be allowed to signal problems when they arise, that is a standard and fair point. If the IMF’s public statements imply that any period of low exchange-rate volatility is necessarily a problem, then that is an overreach that requires correction.

The public and market participants are best served when international institutions and local policymakers continue to publish the data that lets everyone judge for themselves.

Kenya imports a substantial share of its energy and intermediate goods.

Large currency depreciations translate into immediate increases in imported fuel and commodity costs that feed into domestic inflation. Stability supports the central bank’s inflation-targeting framework by limiting imported inflation shocks and making monetary policy more effective.

Financial institutions and corporates face lower costs for hedging and for cross-border settlement when currency volatility is low. That increases the economy’s operational efficiency and reduces marginal costs for firms that rely on imported inputs.

Investors, both domestic and foreign, prefer predictable operating environments. Exchange-rate stability reduces one source of macroeconomic uncertainty and improves the business climate.

These benefits are not abstract but tangible, measurable impacts on the cost of doing business and on macroeconomic stability.

Several plausible, benign explanations can account for the shilling’s limited movement.

Worker remittances, tourism revenues and services exports have strengthened Kenya’s external receipts in recent periods. When such inflows are sustained, they increase the supply of foreign exchange and dampen volatility.

The CBK’s published methodology for the exchange rates, which is a weighted average of registered trades, and frequent published bulletins improve price discovery.

The CBK may also conduct operations aimed at smoothing spikes that is an accepted practice in many emerging markets while leaving the market’s price-setting role intact.

The oil credit facilities and extended supplier credit terms reduce the immediate dollar demand for imports and therefore reduce pressure on the exchange rate. This is pragmatic import financing management.

Large usable reserves make it easier for the CBK to support orderly conditions during temporary shocks without making a long-term commitment to an official exchange-rate peg. The CBK’s weekly bulletins explicitly note that reserves remain adequate as alluded earlier in this article.

It is worth acknowledging where the IMF’s caution may have legitimate grounding.

If domestic policy is unsustainable, stability can be temporary and end in a disruptive depreciation later. The IMF’s caution is often framed as a preventive concern about long-term competitiveness.

Very tight management of the exchange rate can make it harder for monetary policy to control inflation or for the exchange rate to perform its shock-absorbing role.

These are sensible, technical points. However, the detail is in the data and the execution. Are reserves adequate? Is the stability supported by balanced flows and policy coherence? Is monetary policy achieving its inflation target? On those questions, the data point to a more favourable picture for Kenya.

For a country like Kenya, which is working to preserve macro stability while addressing debt sustainability, a constructive path would be to continue and deepen public reporting on Forex liquidity, usable reserves (and how they are calculated), composition of inflows (remittances, tourism, export receipts), and any exceptional operations the CBK conducts to smooth volatility.

The IMF and CBK should publish a joint technical note if the Fund’s staff have concerns about the transmission mechanism. This note should set out indicators, thresholds and recommended adjustments.

Kenya must continue to combine prudent fiscal consolidation with monetary discipline and structural reforms to enhance exports, widen the tax base and strengthen debt management. This will reduce the chance that ‘stability’ proves temporary.

From the evidence available in CBK releases and market reporting, the recent steadiness of the shilling appears to reflect a combination of adequate reserves, robust inflows, transparent market pricing practices and structural financing arrangements for key imports.

Those are not signs of policy failure. They are, instead, plausible reasons why the exchange rate can be relatively stable without impairing competitiveness or monetary policy.

This is not to say that Kenya cannot be complacent. Prudent fiscal management, ongoing transparency, and a clear dialogue with the IMF on indicators and thresholds are essential in ensuring that Kenya stays on course and sustains its forex markets stability.

Kenya does not believe that securitised arrears should form part of its public debt stock, marking a major point of difference in ongoing discussions for a new programme funded by the International Monetary Fund (IMF).

Treasury Cabinet Secretary John Mbadi says the government’s position is that securitised debt should not be part of the sovereign’s liability as the buck of responsibility is passed to a special purpose vehicle, which owns the arrears on the State’s behalf.

The difference of opinion between Kenya and the IMF comes as Kenya securitises part of the collections from the Road Maintenance Levy Fund to pay investors who buy bonds, which will be issued by the Kenya Roads Board (KRB) for sector pending bills.

Kenya has previously indicated that it would also securitise other pending bills as a cure to the runaway arrears, as it struggles to pay the bills through tax revenues.

‘The issue of securitisation is not that the IMF thinks it’s the wrong idea. They are supporting securitisation, saying it is one of the most innovative ways of raising funds,’ said Mr Mbadi.

‘The concern is an accounting matter on whether we should capture it as a sovereign debt or not. Our position as the government is that once you sell a right to a special purpose vehicle (SPV), then there is no risk to the government at all. The IMF feels that we should treat it as a sovereign debt. Whichever way, we will agree.’

Kenya plans to issue road bonds totalling Sh300 billion, which will be covered by hiving off Sh12 out of every Sh25 per litre of petrol or diesel sold, representing the Road Maintenance Levy Fund.

About Sh7 will be used to pay investors buying into the first tranche of the Sh175 billion bond to cover current pending bills to road contractors.

The balance of Sh5 will cover payments to a second bond estimated at Sh125 billion, which is to foot future bills to contractors.

A special purpose vehicle-Oak Assetco SPV Limited has already been established to hold the securitised portion of the fuel levy.

Special-purpose vehicles are distinct legal entities created to isolate a specific asset, liability or financial risk.

In the case of Kenya, the securitisation of pending bills through the Oak Assetco SPV means that Kenya would no longer be responsible for the arrears.

The Sh175 billion first tranche of the roads bond is expected to be issued this month upon the conclusion of a market sounding process.

Proceeds from the bond are expected to first fund a Sh104 billion bridge loan facility from a syndicate of commercial banks, including the Trade and Development Bank, KCB Bank Kenya, Absa Bank Kenya and UBA Kenya Bank.

The KRB has distributed Sh93 billion from the bridge facility as payments to road contractors through its specific agencies, including the Kenya National Highways Authority, the Kenya Rural Roads Authority and the Kenya Urban Roads Authority.

The treatment of securitised debt could determine whether Kenya gets a new funded programme with the IMF, a successor to a previous arrangement terminated prematurely in March.

Kenya has stated that it has managed its expectations on the possibility of new IMF funding, making no budgetary appropriations over the medium term to June 2030.

‘You would note that we did not factor in an IMF-funded programme. If it comes, it will be a windfall in a sense in that it will help us reduce some other loans, whether domestic or external,’ said Mr Mbadi.

He said several follow-up talks are yet to take place before Kenya can clear a new programme with the fund.

Handwriting, once a sign of learning and creativity, is slowly disappearing as people trade notebooks for screens and for chats filled with emojis. Many Ge

n Zs can type fast but struggle to write neatly or even hold a pen for long. Experts say this shift affects more than just handwriting. It changes how we think, remember, and connect with others.

Victoria Sirengo, 27, is a counselling psychologist who still enjoys writing by hand. She remembers the last time she used a pen clearly.

‘I used a pen about a week ago to write a chapter of the book I am working on. Whenever I use a pen, I feel a consistent flow of ideas. My brain stays connected with what I want to put in writing.’

However, she has noticed that with the rise of technology, especially tools like WPS Office and Microsoft Word, handwriting has become rare in her daily life. ‘Mostly I type my work on a laptop or phone instead of writing it down.’

Victoria’s relationship with writing changed when she joined campus. ‘I realised most of my assignments had to be typed and submitted digitally. Because of that, I became careless about how I wrote. I stopped paying attention to how I shaped my letters or how neat my handwriting was. In high school, teachers were very strict about handwriting, so I used to write very neatly.’

As typing became easier, she began to lose interest in using a pen. ‘Eventually, I lost the zeal to write by hand because typing felt more effective,’ she said.

But this convenience came at a cost. ‘I rely a lot on autocorrect. It has made me lazy to think about the correct spelling of words. When typing, autocorrect gives you the right word instantly, so you do not get the chance to think for yourself. Now when I write by hand, I sometimes have to stop and confirm the spelling using my phone. Even simple words that used to come easily, I now struggle to remember.’

Technology has also changed the way she expresses herself.

‘I am more confident when I am texting than when I am speaking. When I text, the keyboard gives me suggestions and my brain connects the ideas better. But when I write by hand, I make many mistakes. Sometimes I skip words that are in my mind because I cannot put them down properly.’

Despite these challenges, Victoria has not stopped writing by hand. ‘Writing helps me connect my thoughts better than typing does.’

Technology has also taught her something unexpected. ‘I have learned empathy through AI. When I chat with artificial intelligence, the way it listens and responds is sometimes more empathetic than humans. I try to emulate that in how I talk to people.’

But she quickly adds, ‘Learning empathy from technology should not replace learning it from people. Humanity is fading because technology is taking away the role that people should play. I should have learned empathy from my lecturers or elders, not from a computer.’

I dislike autocorrect

Phoebe Atieno is a 29-year-old teacher and mental health advocate. She also mentors young people and takes part in programmes that support Sexual and Reproductive Health and Rights.

Phoebe has always enjoyed writing and learning. ‘If something stays in my mind for long, especially when I am doing research, you will always find me with a notebook and a pen.’

The last time she wrote by hand was three weeks ago.

She has noticed changes in her own handwriting over time. ‘Sometimes I scribble so much when I am in a hurry. But when I am settled and there are no distractions, just me, I always write perfectly and it is neat.’

Writing by hand helps her connect with her thoughts. Phoebe prefers to write by hand instead of typing. ‘I do not like autocorrect. If need be, I use it, but I always try to minimise how often I do. I believe in myself. There are words I have mastered at my fingertips.’

Even though she uses her phone and computer often, she tries to stay mindful about it. ‘When I am in a matatu, I pay with my phone, then keep it away until I reach my destination,’ she says. ‘That is my quiet time to think and reflect.’

Phoebe also notices how her own way of communicating has changed over the years. ‘When I visit home, I put my phone away. I want to talk with my grandmother, not just scroll online.’ She still enjoys calling her parents instead of sending long texts. ‘It feels more real when I hear their voices,’ she adds.

For Phoebe, handwriting, listening, and speaking directly to people are not old habits. They are part of her daily life. ‘When I take notes by hand, I listen better and understand more,’ she says. ‘It helps me think deeply, not just copy from the internet.’

A systemic problem

Professor Egara Kabaji, Professor of Language and Literary Communication at Masinde Muliro University, explains that handwriting is an ancient skill, thousands of years old, but it is now fading among modern generations.

He notes that the decline of handwriting begins in the early stages of education, where teachers no longer emphasise penmanship as they once did. ‘We cannot expect students to write well if we no longer teach them how to write,’ the professor says.

He believes that the problem is systemic and rooted in how teachers are trained.

According to Professor Kabaji, the rise of computers, phones, and other digital tools has made handwriting less common. People now spend more time typing than writing by hand. ‘If we are not practicing handwriting, how can we be good at it?’ He poses.

He admits that he now types most of his work directly into the computer, including his novels, and rarely writes by hand except when journaling.

The professor explains that handwriting involves multiple senses, listening, seeing, and physically writing, which helps students retain information better. When students type instead of writing notes by hand, they lose part of that learning process.

‘Typing is faster, but it disconnects you from what you are learning,’ he says. This reduced physical engagement affects memory, understanding, and mastery of language.

He also observes that spelling and grammar have suffered because of digital tools. ‘When computers correct our spelling, we stop learning how to spell,’ he explains. Young people today rely heavily on autocorrect, and when asked to write by hand, they make many spelling and grammatical mistakes.

Professor Kabaji stresses that the decline in letter writing has also weakened emotional expression and human connection.

‘In the past, writing letters allowed us to reflect, to think and to express emotions honestly,’ he says. ‘Now people even ask artificial intelligence to write love letters for them. Our brains are being put to sleep.’

Professor Kabaji also criticises the way emojis and abbreviations have replaced words. ‘If you use words, you can express your feelings better than an emoji,’ he argues.

He adds that most emojis are not even culturally representative. ‘This is another form of modern colonisation,’ he says.

While he acknowledges that artificial intelligence and predictive text are here to stay, he insists that people must use technology wisely. ‘AI can help us, but we must still think critically. The human mind should never be taken for granted.’

He warns that over-reliance on digital tools can weaken critical thinking and self-editing skills. Some writers, he observes, no longer read carefully or reflect deeply before publishing their work.

‘If you misuse technology, it erodes human connection,’ he cautions.

Kenya has partnered with Egypt to improve its military medical services, by enhancing its response to health emergencies, training medical personnel, and preparing for health challenges during peace and conflict times.

This collaboration will see the two countries jointly train military health workers, exchange technical expertise and conduct research on key medical issues affecting soldiers, such as trauma management, infectious diseases and mental health.

It will also enable doctors, nurses, and medical technicians from both countries to work and train in each other’s facilities as they seek to expand their skills and become familiar with advanced medical technologies.

‘By working together, pooling our expertise and sharing resources, we can significantly enhance the operational effectiveness and humanitarian outreach of our military medical services in both countries,’ said Brigadier Japheth Ndegwa, Kenya’s Acting Director of Medical Services.

Egypt already runs one of Africa’s most advanced military medical systems, complete with major hospitals and research institutions, and has decades of experience in battlefield surgery and medical logistics.

In turn, Kenya has made significant strides in incorporating mental health, wellness, and community-based care into its military healthcare system.

Brigadier Hytham Maher, co-chair of the Kenya-Egypt joint military committee, said that the collaboration would benefit not only the two countries, but also help to strengthen regional health and security ties.

‘We are very thankful for the opportunity to strengthen relations between our two countries, as this will open doors to collaboration in various industries, including health. A healthy nation builds itself up to become a great nation,’ said Brigadier Maher.

Kenya has been steadily investing in its military health system. A key project currently in progress is the Forces Referral and Research Hospital in Kabete, which is being developed at a cost of Sh19.3 billion.

This new facility, which will have 700 beds, is expected to become one of East Africa’s leading centres for military healthcare, training and research.

In the current financial year, the Ministry of Defence received approximately Sh214 billion to run its operations.

The Directorate of Medical Services (DMS) of the Kenya Defence Forces (KDF) is responsible for the health of soldiers and their families, as well as civilians in times of emergency.

The DMS runs a network of hospitals and medical centres, including the Defence Forces Memorial Hospital (DFMH), which provides specialised care and referrals, and the Defence Forces Wellness Centre (DFWC), which focuses on mental health and rehabilitation.

The Kenya Tea Development Agency (KTDA) is phasing out an inter-factory loan programme that has been running for decades in favour of commercial loans offered by banks.

The decision comes after a revelation that factories in the West of Rift had taken upto Sh 14 billion loans from those in the East of Rift over the years, with the credit facilities remaining unpaid.

The position has also been taken after the Principal Secretary for Agriculture Paul Kipronoh Ronoh directed the Tea Board of Kenya (TBK), the tea industry regulator to undertake audits on loans taken by KTDA factories.

The existing model was adopted to address short-term financial needs and ease the burden to the 700,000 small-scale tea growers supplying their produce to the KTDA factories from the effects of short and long-term commercial loans to finance operations.

As a result of the policy change, each of the 71 factories will from mid-November be able to access commercial loans from financial institutions in the country.

‘KTDA is in the process of phasing out the inter-factory loan mode and the reconciliation of previously borrowed funds is ongoing and nearing completion to ensure full accountability,’ KTDA said in a statement.

The agency allowed the inter-factory loans to finance operation costs, especially electricity costs, maintenance and repairs of machines and to cover shortfall in the annual bonus payment to farmers by factories that have cash flow challenges.

‘Beginning mid this month (November), factories will be able to access financing directly from commercial banks … a step that will enhance financial independence and strengthen stability across the tea sector,’ KTDA Board members stated.

KTDA Board vice chairman Omweno Ombasa led the zonal directors -Samson Mosonik Menjo, Vincent Arisi, Francis Wanjau and Philiph Langat- to welcome calls for an audit of the loans portfolio in the factories, but said that the cost of the exercise should not be passed on to the small scale growers supplying their green leaf to the agency.

‘We want to emphasise that we have nothing to hide and we welcome any lawful audit that promotes transparency and accountability. But the cost of such an audit should not be borne by farmers. Those calling for an audit should meet the associated expenses,’ the directors stated.

Last week, KTDA directors from the East of Rift led by Mr Chege Kirundi (KTDA Board chairman) said that there was a need to embrace ‘innovation, improve efficiency, and strengthen the resilience of the tea sector so as to increase income to farmers’.

Mr Gabriel Kagombe, who is the Gatundu South Member of Parliament claimed that factories in the West of Rift owed those from the East of Rift over Sh 14 billion in loans.

‘The loans were advanced by the East of Rift factories to those in the West of Rift to boost their operational capacities, pay bonuses and other financial demands. That is because factories in the Eastern region are doing well with farmers adopting high quality plucking of green leaf,’ Mr Kagombe said.

Principal Secretary for Agriculture Paul Ronoh has come under attack from a section of stakeholders for ordering the Tea Board of Kenya (TBK) to conduct an audit on loans taken by KTDA factories.

Dr Ronoh directed TBK to establish the total amount borrowed by individual KTDA factories, how the loans were utilised, the terms and conditions under which the loans were acquired, and the current outstanding loans balances for each factory.

‘The findings of this audit will enable the Ministry to evaluate the financial sustainability of the factories and appropriate operational measures aimed at addressing the challenges currently facing the tea sub sector,’ Dr Ronoh stated in the memo dated October 22, 2025 and addressed to the TBK Chief Executive Officer Willy Mutai.

The PS directed the Tea Board of Kenya to hand in the audit report within 14 days from the time the directive was issued.

But the PS has come under a scathing attack by stakeholders for allegedly overstepping his mandate and seeking to police a private entity, issuing directives without consultation and introducing politics in the industry.

‘The PS (Dr Ronoh) has issued illegal directive to moribund Tea Board of Kenya (TBK) to conduct an audit over a private company, (KTDA) which much as it has its accountability challenges, is far much better than some government institutions,’ Nakuru-based advocate Benhard Kipkoech Ngetich said.

The KTDA directors have also called for an end to the increasing politicization of the tea sector challenges which have negative bearing on marketing of Kenya’s made tea in the global market.

‘The tea industry thrives on professionalism, co-operation and stability and not on political contestation. We urge leaders to approach the matters with sobriety, consultation, and respect for institutional structures,’ they said.

They added that ‘political interference (in the sector) only breeds confusion, drives away investors, and undermines market confidence, ultimately hurting the farmers we seek to serve.’

The death of businessman Hannington Juma inside Kenya Revenue Authority’s (KRA) Lake Basin Mall in Kisumu recently dramatises the all-too-familiar daily script of agony by taxpayers in the hands of the taxman.

This sad account mirrors a tale of ancient Rome, where the emperor sent his General to pacify rioters in a small city over taxes. Instead, he wiped out everybody with the gun and reported restoring peace. A scribe then remarked: they created desolation and called it peace.

The KRA Commissioner General faces a similar dilemma, calling into focus the need to revamp its service charter to stop killing businesses literally.

Firstly, return to the twin canons of taxation on elasticity and certainty. Taxpayers need the psychological comfort of knowing that they are valued partners by intentional and responsive policies which create assurance that their businesses can be salvaged from risks of a depressed economy.

Bring back the MG Waweru tax model on tax policy units to cater for remission hardships contemplated under section 20 of the Value-Added Tax Act. This is an effective quick win for struggling taxpayers looking for a turnaround.

The KRA policy regime must consider flexible payment plans to align with the recent Court of Appeal ruling in a tussle with Keroche Industries. Section 5 of the KRA Act gives advisory powers to the Treasury Cabinet Secretary.

Nothing prohibits the KRA from repackaging its tax policies, including restructured payment plans to resuscitate ailing enterprises.

For instance, a while back, banks never used to give loans past three years without sureties; currently, they offer facilities running to 10 years without any security.

There is a need for strategic leadership to re-conceptualise Kenya’s debt burden and interface it with tax compliance.

The pressure to collect more taxes to hedge against risks of debt default must not destroy the industrial economy, resulting in business collapse, shutdowns, relocations, and capital flight.

Equally, staff suffocate under the weight of unrealistic targets when it has a data repository that can be used for informed revenue forecasts.

Again, while tax amnesty enabled KRA to surpass collection targets, such one-off schemes cannot adequately cater to the ever-changing dynamics of tax culture. It must loop in feedback from debt validation to craft long-term reward schemes for the taxpayers.

The concept of endgame is key to crafting a winning strategy. The KRA must take a hard look at set targets, staff attitude and infuse user-friendly policies to restore confidence in the hearts of Kenyan taxpayers.

There is also the lost art of institutional memory in change management. During Waweru era each TSO had clearly defined units for compliance, audit, policy-technical, debt and customer experience.

This sharply contrasts to the irony of bureaucratic nightmare occasioned by technology. A client recently shocked me when they received 5 letters from KRA in a span of 4 days.

To wit, Audit Notice; Special Table warning; TCC withdrawal threat; Agency Notice; and threat of TIMS shutdown. This is the level of uncertainty and anxiety which drives taxpayers to death and depression.

Mwanaisha leads a county works unit at the Kenyan Coast. She has started confronting a growing backlog in service failures after the rainy season exposed old infrastructure weaknesses.

She rushes to split her department into two new teams and then signs hurried contractor agreements for repair runs, but without first agreeing to how to handle handoffs or successful transition indicators.

Staff inside the unit start scrambling while contractors chase invoices pleading for payment. Essentially, confusion takes over the team. County customers queue at ward offices and demand action.

However, the two sides point fingers at each other while infrastructure continues to fail. A month later, the director calls a crisis meeting to uncover why all the well-intentioned hard work failed to provide better service for county citizens.

Counties across Kenya face similar choices about who should deliver public services and how learning should occur during service delivery. Leaders often treat governance choices as singular one-off events. But effort alone does not solve problems.

Real life rarely rewards hope without specific task re-design. Performance only improves when people learn during action taken and when public or private structures invite intentional learning rather than block or ignore it.

Careful choices about roles, incentives, and information flow can convert effort into actual improvement that county citizens can see and feel.

New research by Louis Mulotte and Simon Porcher investigates the concept of learning by doing as it relates to inside public service delivery. It looks at a rare comparison between similar public entities.

The scholars track hundreds of French municipalities that decided to either keep work inside city or county-equivalent departments or instead contracted out to private providers for water services during a 10- year window.

The study focused on operating performance through billed water over total water supplied, which is a way to ascertain how well different teams reduce water leak losses.

The research then examined how experience over additional years can shape outcomes under each internal or external structure choice while factoring in and controlling for complexity and political uncertainty.

Even though the research was not conducted in East Africa, patterns emerge that could provide useful clarity here.

First, more actual time on the job generally improves operating performance in both internal and external structures. However, each extra year only yields smaller incremental gains since teams start with the easy pipe and structure fixes first and then have to deal with the harder problems later on.

Second, external service provider contracting often delivers steeper learning curves early because heavy financial incentives push providers to search out and find efficiency quickly and then lock in routines that reduce losses.

That advantage, though, weakens depending on technological complexity rising or when political uncertainty clouds a firm’s future planning and leads them to proceed cautiously with investments that may or may not have longer term yields.

Third, in more simple municipal environments with quite clear causes and effects of decisions, the highest incentives do indeed fuel rapid service delivery improvement.

But in more complex networks with many interdependent parts or in volatile political climates, internal teams often learn better because of their unique proximity, tacit knowledge, and stable priorities that support a more comprehensive trial, error, and refinement approach to problem solving and working.

Not only water boards and water companies, but also county leaders for other types of service delivery can notice some direct lessons that impact their respective portfolios.

Treat internal or external structure choices as a learning engine rather than a static decision. If straightforward tasks with clean interfaces, short feedback loops, and transparent results are involved, then leaders should consider external contracting and design contracts that can reward measurable loss reduction, quick data sharing, and the capability transfer to parastatal or county staff at a point in the future.

But for tangled complicated situations and networks with many interdependencies, legacy baggage, and fragile interfaces, then the research recommends that leaders should favour inhouse internal provision of service delivery that anchors multi-skilled crews, codifies and captures local know-how, and protects continuous experimentation without fear of contract changes accompanying political changes.

Leaders must align the internal or external structure with the learning challenge, not with any type of ideology or habitual practice.

Leaders who match governance to the nature of the work can avoid Mwanaisha’s above predicament. Structure that incorporates intentional learning beats structures that only allocate team effort. Working hard is not always working smart.

Pay-television firm MultiChoice Kenya has slashed the cost of its decoders by up to Sh349, including installation costs, in the latest push to arrest the dip in subscriber numbers.

The company says its high-definition DStv Zapper decoders will now cost Sh850 down from Sh1,199, while the prices of the GOtv decoders have fallen to Sh799 from Sh999.

‘These offers are our way of saying thank you to our customers for their loyalty and trust, while inviting new customers to join our growing family,’ said Nzola Miranda, Managing Director at MultiChoice Kenya, when he announced the offers that will last up to December 31, 2025.

The slashing of the prices of the kits comes at a time when the firm is grappling with a mass exodus of subscribers amid costly packages and the rise of illegal online streaming platforms.

However, it remains to be seen whether the price reduction will arrest the dip in subscriber numbers.

More than 80 percent of DStv’s active customers dropped out in the year to June 2025, leaving the firm with 188,824 active subscribers compared to 1.19 million a year earlier.

Spending power

The firm has also reduced prices on installation accessories, with the DStv dish kit now going for Sh1,650 from Sh2,000 and the GOtv antenna dropping to Sh700 from Sh1,000. GOtv targets customers unable to afford DStv packages due to their spending power.

The cost reductions come barely months after the firm increased the price of its packages for the fifth time in under three years to avert a hit on revenues amid a decline in subscribers.

Prices of DStv packages in Kenya rose by up to Sh700 effective August 1 this year. Subscribers on the Premium were hit with the highest price increase to Sh11,700 from Sh11,000, while those on the Compact Plus are paying Sh7,300 from Sh6,800.

Revenues for MultiChoice in all its markets fell 27 percent in the year to March 2025, revealing the impact of the falling subscriber numbers amid competition from online streaming sites, most of which are illegally accessed.

Subscribers are opting for the cheaper online television streaming sites or illegally accessing others amid tough economic times.

MultiChoice Kenya is keen to turn around its dwindling fortunes in the local market and ward off further subscriber losses to the cheaper online television streaming services.

The price cuts on the kits are the first major move that MultiChoice has made in Kenya since it was acquired by French broadcaster, Canal+.

Canal+ bought MultiChoice Group in September this year in a deal that saw the French firm acquire 94.39 percent of all MultiChoice Group shares.

The French broadcaster said that it will undertake an in-depth market review of MultiChoice Group operations and announce any planned changes by April 2026.

Kenya has just taken a historic step toward becoming a regulated digital finance hub with the passage of the Virtual Asset Service Providers Bill. This landmark legislation marks a decisive moment in the evolution of Kenya’s financial landscape.

For the first time, the Central Bank has a clearly stipulated role in licensing stablecoins – a form of crypto that maintains a stable value by being pegged to traditional fiat currencies such as the US dollar.

Kenya’s Capital Markets Authority also now has legal responsibilities for the oversight of crypto exchanges and virtual asset providers.

These developments are crucial because businesses and consumers alike now have a legal framework that brings transparency, trust, and accountability to Kenya’s growing virtual assets ecosystem.

The implications of this legislation are profound. In Kenya’s case, many people have previously approached virtual assets with caution, concerned about the potential for scams.

By establishing licensing and oversight mechanisms, the new legislation creates a safe, transparent environment where users can engage with virtual assets with confidence.

Before the law was passed, forecasts suggested that 42 percent of Kenyans could be using or owning crypto or virtual assets by 2030. But with the new legislation significantly boosting consumer trust, which is of course a critical ingredient for widespread adoption, these numbers could be pushed higher still.

This is important because the benefits of virtual assets for Kenyans are considerable. Indeed, one of the most exciting aspects of this legislation is its potential to drive financial inclusion.

Africa has one of the youngest populations in the world, and millions of young people are already digitally literate and eager to engage with technology-enabled financial services.

Modern digital banking services, powered by blockchain technology and cryptocurrencies, can play a powerful role in driving financial inclusion by empowering those excluded from traditional banking.

Accessible blockchain-based tools can give everyone direct access to savings, investment, and cross-border payment solutions without the friction of legacy banking infrastructure.

When properly regulated, as they now are in Kenya, stablecoins and digital exchanges offer a new avenue for wealth creation, entrepreneurial activity, and economic participation.

The parallels with Kenya’s past fintech achievements are clear. More than a decade ago, M-Pesa transformed how East Africans accessed and transferred money. Its success was built on a combination of innovative technology, forward-thinking regulation, and widespread adoption driven by consumer trust.

Today, Kenya has the opportunity to replicate, and perhaps even surpass, that success in the digital asset space. By providing clear regulatory guardrails, the Virtual Asset Service Providers Act, 2025 lays the foundation for a new wave of innovation fuelled by the emerging virtual assets industry – innovation that could transform the financial prospects of millions of Kenyans for the better.

This regulatory clarity is also vital in reducing friction for innovators and investors. Startups can now plan with confidence, knowing the rules of the game and the requirements for compliance. International investors, too, gain assurance that Kenya is serious about protecting both consumers and investors’ capital.

Kenya has now joined a small but growing cohort of African nations that have provided clear regulatory guidance for virtual assets, signalling to local and international investors that the country is ready for the next wave of innovation.

This credibility will be critical in attracting the venture capital and corporate partnerships that are essential for scaling digital finance solutions across Africa.

Kenya’s Virtual Asset Service Providers law is a proactive move that positions the country at the forefront of the continent’s digital finance revolution.

In the years ahead, we may look back at this legislation as the catalyst that unlocked Kenya’s next financial frontier, just as M-Pesa did 15 years ago.

Young Kenyans will now have greater and stronger access to blockchain-powered tools that reduce friction in payments, enhance transparency in financial transactions, and create pathways for wealth and entrepreneurship that were previously out of reach.

Investors, entrepreneurs, and consumers now have a clear signal: Kenya is open to virtual assets and financial innovation.

Savings and credit co-operative societies (saccos) have been spared mandatory write-off of billions of shillings locked in the Sh13.3 billion fraud at Kenya Union of Savings and Credit Co-operatives (Kuscco), putting them at odds with international accounting rules.

The High Court has quashed a guideline from the Sacco Societies Regulatory Authority (Sasra) that directed the co-operatives to set aside partial funds or provisions to cover the expected loss of billions of shillings worth of deposits and shares at Kuscco.

This was in line with the global accounting tenet, or the IFRS 9 accounting rules, which require lenders, such as saccos, to book expected losses on assets in one go.

However, the court determined that the Sasra guideline was rushed and had not undergone public participation.

The State had asked big saccos to make provisions on their Kuscco investments and lower their dividend payouts to protect their liquidity.

The court’s directive will ease fears of dividend freezes or cuts, which were seen as a blow to sacco members who have enjoyed annual payouts that ranged between 8.22 percent and 10.22 percent in the five years to 2023, including during the Covid-19 economic hardships.

‘There is no proportional nexus between the objective and the rationality or justification whatsoever in the guideline that was advanced that was satisfactory to the court. The guideline is unreasonable, disproportionate and unconstitutional, whether or not there was a protest,’ said the court.

‘The court is of the view that a public participation process would have culminated in an inclusive, informed, acceptable and more effective eventuality. Such an open engagement would have created room to secure input from key instrumental players like statutory accounting organisations and the interested party.’

The judge said Sasra’s argument that in deed some saccos had already started provisions ‘cannot sanitise nor convert an illegality into a valid guideline.’

The decision came after Nyati Sacco Society petitioned the court to quash the Sasra directive, arguing that there were no legal reports to show Kuscco was insolvent.

It stands to lose Sh86 million invested in Kuscco as shares and deposits.

Nyati Sacco won the case on a technicality, with the court saying the regulator failed to give any reasons for the ‘rushed decision.’

Some top saccos have set aside partial funds or provisions to cover the expected loss of billions of shillings worth of deposits and shares at Kuscco.

Wrongdoings at Kuscco include the cooking of books, large-scale theft by executives, bribery, unexplained bank withdrawals and conflict of interest through issuance of contracts to firms owned by top managers and masking the schemes through manipulation of financial statements to report non-existent profits.

In the end, Sh13.3 billion has been lost, the umbrella body for saccos is insolvent to the tune of Sh12.5 billion and Sh8.8 billion it owes saccos as deposits and shares.

This violates the IFRS 9 accounting rules, which require the saccos to book expected losses on assets in one go.

The IFRS 9 rules, designed to respond to a central lesson arising from the global financial crisis of 2008, allow firms to predict and recognise financial losses earlier for stability. The firms are expected to provision for the expected losses upfront.

Some of the top saccos that have breached the rule include Nyati Sacco and Tembo Sacco.

Nyati Sacco has made a 10 percent provision against its Sh86 million investment in Kuscco.

It sued Sasra over the provisioning order, adding that the write-off will shield Kuscco and the regulator from their obligations.

Saccos that made full provisions include Stima (Sh108 million), Kimisitu (Sh353.95 million), LSK (Sh19 million), Mhasibu (Sh408 million), Sheria (Sh146.8 million), Balozi (Sh437.55 million) and Kenpipe (Sh149.18 million).

Saccos that were owed billions of shillings were advised to stagger the provisions over the coming years, while some have been directed to tap bank loans for the risk buffer.

The State has cast doubts about whether saccos will recover their investments in Kuscco, underlining the extent of fraudulent activities in the umbrella body.

The rot has left Kuscco with assets of Sh5.2 billion against liabilities of Sh17.7 billion, sinking it into Sh12.5 billion insolvency for an organisation that operated without a regulatory watchdog.

Sasra, in its defence, told the court IFRS 9 requires firms to make provisions ‘immediately upon realisation’ that the short-term recoverability of their investment is doubtful and failing to do so would be in breach of the standard and also result in misleading accounts.

‘Any failure to recognise the impairment of investments in Kuscco will automatically result in violation of section 40 (3) of the [Sacco Societies] Act as well as the IFRS 9,’ said Sasra in the court papers.

‘But more importantly, [it] will result in accounts and financial statements of sacco societies which do not reflect a true and fair state of their affairs contrary to section 40 (2) of the Act, with the resultant consequences of putting at risk of loss of members’ deposits and savings held in the sacco societies.’

The regulator told the court that provisioning would ensure saccos do not overstate their assets and income, which could trigger some to make excess payments out of their deposits or savings in anticipation of money that may never come.

‘Making provisions does not stop the pursuit of the recovery of the impaired assets or investments, but it is a recognition that such pursuits may take a long time for any recoveries to be made and therefore provisioning to allow continuation of the business is necessary while preserving the existing asset portfolio,’ said Sasra.

Nyati Sacco said its investment in Kuscco matured in April 2024, but the entity withheld payment ‘without giving any plausible explanation,’ and this was not enough for a write-off.

Nyati Sacco CEO Julius Bett, in an affidavit, told the court that Sasra’s argument that Kuscco had been ‘reported to be facing financial challenges’ lacked any authoritative basis and did not meet the threshold of a lawful administrative action.

A forensic audit by consultancy firm PricewaterhouseCoopers (PwC) revealed the cooking of books and theft.

The audit retrieved the trove of incriminating information from e-mails, computer logs, M-Pesa statements and documents of at least 23 top managers at Kuscco in a review that placed eight executives in the spotlight, including then managing director George Ototo, finance manager George Owino and chairman George Magutu.

The PwC audit unearthed the cooking of financial books to the tune of Sh9.3 billion following the understatement of costs like commissions and interest expenses and the overstating of incomes-a scheme which saw Kuscco book phantom profits.