Category: Business Daily

Kenya is setting up a sovereign wealth fund that will be barred from investing in local bonds and stocks as it seeks a buffer against economic shocks and fluctuations in resource earnings.

A sovereign wealth fund is a State-owned investment kitty that is centered on managing a country’s surplus reserves to generate economic benefits for its citizens.

The Kenya Sovereign Wealth Fund will have three components – a stabilisation unit, an infrastructure investment arm, and a segment focused on savings, according to draft legislation.

It will get funds from the minerals and petroleum sector and invest the billions of shillings into foreign currency-denominated instruments, including investment-grade bonds, securities backed by multilaterals such as the World Bank and the International Monetary Fund (IMF) and deposits in offshore banks.

The draft Kenya Sovereign Wealth fund Bill, 2025 has also banned investments in speculative derivatives, unlisted real estate, private equity, arts, and commodities.

Proceeds from the investments will be used to invest in key sectors without repeating a debt binge that has strained public finances in recent years.

So far, it will have nearly Sh200 billion that Kenya earned from the mineral sector in the form of royalties, prospecting licences and acreage leases.

The offshore bias in investment is expected to serve as a natural hedge to returns generated from the fund, which are purposed to provide the national government with a buffer from fluctuations in resource revenues, finance strategic infrastructure projects and build savings for the future.

‘The fund shall not be invested in speculative derivatives, unlisted real estate, private equity, art and commodities,’ reads the bill.

‘The assets of the stabilisation component shall not be invested in securities listed at the Nairobi Securities Exchange.’

The sovereign wealth fund will be invested primarily in financial instruments denominated in internationally convertible currency, including deposits held at other Central Banks or the Bank for International Settlements.

Foreign securities shall be required to have an investment grade rating from an internationally recognised rating agency or have the backing of the IMF, the World Bank or any other sovereign State besides Kenya, with the guarantor also expected to have an investment grade rating.

This also rules out investments in Kenyan Eurobonds because they have been issued by the government and lack a high rating from the global agencies

The first part of the fund or a stabilisation unit shall be used to provide the national government with a buffer from fluctuations in resource revenues and manage extraordinary shocks that may affect macro-economic stability.

A second part of the fund, known as the Strategic Infrastructure Investment Component, shall finance infrastructure priorities in sectors including agriculture, transport, housing, energy, water, education and health while backing public-private partnership (PPP) projects.

The last part of the fund dubbed Urithi shall build a savings pool for the future.

‘The object and purpose of the Future Generation (Urithi) Component is to build a savings base for future generations by providing an endowment to support strategic infrastructure for future generations when the revenues from minerals and petroleum are depleted,’ the draft bill adds.

Norway’s Government Pension Fund Global, with over $1.7 trillion in assets, is the world’s largest sovereign wealth fund at present.

‘The component shall also distribute wealth across generations.’

The fund shall be primarily financed by resource revenues, including the government’s share of profit derived from upstream petroleum operations, petroleum and mining royalties and proceeds from divestment of petroleum and mining interests held by the government.

The fund or funds can take the form of stabilization, savings, public benefit, strategic development or serve as a foreign currency reserve.

Norway’s Government Pension Fund Global, with over $1.7 trillion in assets, is the world’s largest sovereign wealth fund at present.

Other top sovereign wealth funds are in China, the United Arab Emirates (UAE), Kuwait, Saudi Arabia, Qatar and Hong Kong.

Kenya’s Sovereign Wealth Fund will be vested in the National Treasury in trust for the citizens of Kenya.

The country has previously marred the creation of a sovereign wealth fund, especially after the 2012 discovery of multi-billion oil deposits in Turkana.

The Central Bank of Kenya (CBK) shall hold a bank account for the fund known as the holding account, which shall be used for receiving, holding and disbursing all the proceeds of the fund.

The Stabilisation component of the fund shall be financed using transfers from the holding account and fifty percent of self-generated income.

The other half of the generated income from the component shall prop the funding base for the future generation component, with the Urithi kitty also receiving half of the proceeds from interest generated from the strategic infrastructure component.

The strategic infrastructure component which shall also be funded in part by transfers from the holding account, shall also keep 50 percent of its interest income.

Consumers may find some relief in cheaper products in the coming months after factory costs dropped to levels last recorded 30 months ago.

Latest data from the Kenya National Bureau of Statistics (KNBS) shows that the Producer Price Index (PPI), which tracks changes in selling prices received by domestic manufacturers or producers for their output, stood at 134.78 as of the close of September 2025, levels last seen in March 2023.

Producer inflation is a measure of the average change in selling prices received by domestic producers for their output, and it is tracked by PPI.

The cost of electricity, gas, steam, and air conditioning supply fell by 2.03 percent, as water supply and waste management dropped by 2.69 percent.

‘The overall producer prices in September 2025 decreased by 2.45 percent compared to June 2025 prices,’ wrote the KNBS.

The sustained fall in producer costs indicates continued softening in production expenses, partly supported by lower global commodity prices and a stronger shilling during the review period.

The easing producer costs come at a time when the Central Bank of Kenya has maintained a relatively accommodative policy stance, cumulatively lowering the benchmark lending rate by 3.75 percentage points since August last year to support private-sector lending.

But while businesses pass on increases in the cost of raw materials in the form of high retail prices, a fall in PPI does not guarantee reprieve to consumers.

This is mainly because businesses can opt to widen profit margins when the cost of raw materials drops, denying consumers anticipated gains.

The Consumer Price Index, which measures the actual change of retail prices, rose slightly to 146.56 in September, up from 146.21 the preceding month, pushing monthly inflation up by 0.2 percent.

Longhorn Publishers reported a larger net loss of Sh261.4 million in the year ended June, due to a substantial drop in sales in the Kenyan market.

This bigger loss, compared to Sh237.9 million a year earlier, extended the company’s dividend drought.

Sales in the review period fell by 55.8 percent to Sh679.8 million, with Longhorn attributing the decline to reduced demand from households and the government.

‘Revenue for the year declined by 56 percent . reflecting disruption in both the private and government markets,’ the Nairobi Securities Exchange-listed firm said in a statement.

‘Final approvals for revised [learning] materials were issued only in January 2025, creating uncertainty at the start of the school year. Parents deferred purchases, government procurement was delayed, and Sh463m of revenue was consequently pushed into the 2025 financial year.’

The company reduced operating expenses by Sh82.8 million to Sh328.1 million in the review period, but this was not enough to compensate for the revenue decline.

‘Management reduced operating expenses by 20 percent, but the company still recorded an operating loss of Sh35 million (excluding provisions and impairments), compared to an operating profit of Sh165 million in the prior year,’ the publisher said.

Longhorn says it has had a turbulent operating period since the introduction of the Competency-Based Curriculum (CBC) in Kenya, its biggest market.

‘The past seven years have been a testing period for the education sector and for the company. The transition from the 8-4-4 system to the Competency-Based Curriculum (CBC) required significant investment and adaptation,’ the company said.

‘Between 2018 and 2025, the company invested over Sh714 million in CBC content development, absorbed Sh254 million in inventory and debtor impairments, and wrote off Sh149 million in development costs.’

Longhorn expects costs to fall and sales to rise going forward as the CBC settles down.

‘With curriculum rationalisation complete and final CBC approvals in place, stability is expected to return to the sector. Development costs will decline, while clarity in curriculum requirements should support renewed sales momentum,’ the company said.

With the rollout to Grade 12 nearing completion, the business is positioned to move into a more stable and profitable phase, Longhorn added.

The company noted that it has secured government contracts and anticipates stronger uptake in the private market.

Longhorn said that its digital platforms – now serving more than 300 schools and 50,000 learners – continue to grow, providing an additional engine of expansion.

The government gave up an additional Sh4.6 billion in excise duty in 2024 compared to 2023, following a surge in the supply of alcohol to military canteens and increased local assembly of vehicles.

State tax expenditure is the value of taxes forgone due to waivers, exemptions, or breaks on certain commodities or entities to support certain groups, industries, or individuals.

The spending on excise duty rose 37 percent to Sh16.9 billion in the year to December 2024 from Sh12.3 billion a year earlier, according to the latest Tax Expenditure Report published by the National Treasury.

This came amid an overall drop in the government’s tax expenditure over the same period, which decreased by 22.2 percent to Sh286.5 billion from Sh368.4 billion, driven by the latest reforms to boost tax efficiency, according to the Treasury.

The largest increment on excise tax spending was on import excise duty, which nearly tripled to Sh6.2 billion from Sh2.1 billion in 2023, largely driven by the growing local assembly of motor vehicles.

‘This underscores a deliberate policy decision by the government to support and promote local manufacturing,’ said the Treasury in the report.

Imported cars are charged an excise duty of between 10 percent and 35 percent, depending on engine type and size, while locally assembled ones are fully exempt to support the domestic manufacturing industry.

The rise in domestic excise duty expenditure by the government was, on the other hand, driven by increased purchases of alcoholic beverages by the Defence Forces Canteen Organisation, which sells duty-free products to military officers.

Excise duty forgone on alcohol sold to the soldiers rose from Sh680.9 million in 2023 to Sh711.8 million last year, while those foregone on non-alcoholic drinks rose by Sh2.4 million from Sh14.7 million to Sh17.1 million.

In conversations about climate change and the urgent need to build climate-resilient economies, banks, investors, and governments often take centre stage. Yet there is one sector, which is just as critical to enabling this transition: insurance.

Green investments cannot scale without insurance. Every wind farm, geothermal plant, solar park, or electric vehicle depends on the assurance that risk can be managed.

Insurance forms the invisible backbone of the green economy and is one of the most powerful enablers of green growth. By taking on risks that would otherwise deter financiers, insurers help mitigate the risks associated with green investments, giving banks and investors the confidence to channel capital into clean energy projects and climate-resilient infrastructure.

However, their role extends beyond protection. Insurance, at its core, is about people. It is about safeguarding lives, livelihoods, and progress.

As climate-related shocks such as floods, droughts, and extreme storms intensify, the strain on communities, businesses, and national economies across Africa is unprecedented. For families and enterprises in East Africa, access to insurance cushions these shocks and provides a pathway to recovery and resilience.

Beyond protection, insurance also serves as a compass for the flow of capital. Through underwriting decisions and risk pricing, insurers can guide capital allocation toward low-carbon, climate-resilient ventures, ensuring that markets reward sustainability rather than perpetuating high-carbon risks.

This catalytic role is increasingly recognised at the global level. The United Nations Environment Programme’s Principles for Sustainable Insurance emphasise that insurance is not only about transferring risk, but also about preventing and transforming it.

Similarly, the OECD highlights climate risk insurance as a critical tool in strengthening adaptation, particularly in vulnerable regions in Africa.

Across the continent, insurers are already putting this into practice-from providing cover for hydroelectric power plants, dams, and solar energy installations to underwriting geothermal and wind energy projects.

By taking on these complex and capital-intensive risks, the insurance sector is helping catalyse Africa’s green transition, building the confidence that enables investors, governments, and communities to commit to clean and resilient energy systems.

In underwriting these projects, insurers transfer risk and actively catalyse East Africa’s green transition, building the confidence that enables investors, governments, and communities to commit to clean and resilient energy systems.

To sustain this momentum, insurers must also evolve how to understand and manage climate risk. Increasingly, companies are adopting internal climate risk assessment tools that evaluate the exposure of corporate and small and medium enterprise policyholders to both physical and transition risks.

These tools integrate indicators such as sectoral vulnerability, geographic exposure to extreme weather events, and transition factors like regulatory shifts, carbon intensity, and market changes.

The green transition is not just an environmental imperative; it is an economic one. Insurance will determine which investments thrive and which falter in the face of climate uncertainty. For insurers, the mission is clear: to build confidence in a future that is cleaner, fairer, and more resilient.

By mapping climate risk across portfolios, insurers enhance their underwriting, protect SMEs, ensure that capital flows to climate-resilient activities and consequently empower clients to self-assess and be more resilient.

Globally, the opportunity before the insurance industry is enormous. If countries deliver on their current renewable energy targets, the related investments would generate additional premiums from the energy sector of $237 billion by 2035, a tenfold increase compared to $22 billion in premiums from oil, gas, and coal insurance paid in 2022.

Even with slow progress, the potential for insurers to unlock green growth remains vast.

Public universities in Kenya will benefit from a Sh9.5 billion ($73.31 million) loan from the African Development Fund-the concessional lending arm of the African Development Bank Group (AfDB), aimed at strengthening science and technology education.

Implemented in partnership with the Ministry of Education, this financing marks the second phase of the Support for Higher Education, Science and Technology (HEST) Project.

The initiative will modernise 19 public universities by equipping them with advanced laboratories, updated teaching tools, and improved digital learning infrastructure.

Three engineering centres of excellence and a science and technology park will also be established, providing spaces where students and researchers can transform innovative ideas into practical business and industrial solutions.

‘For many, education remains the surest path to a better life,’ said Hendrina Doroba, Division Manager for Education and Skills Development at AfDB.

‘We’re helping Kenya’s young people gain the skills that employers need today-and the confidence to create their own jobs tomorrow.’

Similarly, the HEST II will fund scholarships for 103 university lecturers, provide retraining for academic staff in line with emerging technological needs, and implement a competency-based education system.

The initiative will also promote youth innovation and entrepreneurship by offering training, mentorship, and incubation support to more than 100 start-ups, providing young innovators with the necessary space and resources to grow their enterprises.

The first phase of the project, HEST I, launched in 2012, laid the groundwork by upgrading eight public universities, modernising laboratories, and enhancing engineering and applied science programmes. It also supported staff training, curriculum review, and stronger links between academia and industry.

The second phase involves rolling out the initiative nationwide to ensure that all regions benefit from a more equitable, innovative and well-connected higher education system that supports Kenya’s Vision 2030 goals.

It is expected that the project will benefit over 20,000 students by 2030, including 8,000 young women, and generate approximately 5,000 direct and indirect jobs.

Passengers and motorists involved in accidents where the drivers had expired licences will qualify for insurance compensation under proposed rules that also allow customers with unpaid premiums to enjoy coverage, as the regulator seeks to curb arbitrary rejection of claims.

The draft Insurance (Claims Management) Guidelines, 2025 introduces strict timelines for claim processing, bans unreasonable grounds for rejecting claims, and imposes stronger customer service obligations on insurers.

If adopted, the guidelines by the Treasury will require insurers to compensate drivers whose licences may have expired at the time of an accident, provided they were not disqualified from holding one.

Policyholders often face arbitrary rejection of claims, with insurance firms offering divergent reasons for their decisions.

The Treasury has spelled out in the proposed rules a list of ‘unreasonable or unfair grounds’ that insurance companies can no longer cite when rejecting claims.

Insurers will not be allowed to decline claims from incidents that have been reported late without considering and documenting the reasons for the delay.

Claims will also not be rejected due to non-payment of premiums where the insurers had not cancelled the policy or where cancellation was done by brokers and agents without notifying the policyholder.

The guidelines also bar insurers from rejecting claims on non-disclosure of facts customers could not reasonably be expected to know or innocent misrepresentation that is neither fraudulent nor negligent.

Undiagnosed pre-existing medical conditions will not be used to reject claims, notably life covers.

Insurers will also lose the right to reject claims based on breach of conditions if the terms of the policy were not provided to the customer.

The rules are aimed at protecting policyholders while improving the image of an industry that has long faced criticism over delayed or rejected claims.

Many insurers have been relying on technical grounds to reject legitimate claims.

‘The objective of these guidelines is to ensure prompt payment of claims and promote consumer confidence in the insurance industry,’ the draft guidelines say.

Insurers see the proposed guidelines as a mixed bag and are currently deliberating before taking a position through their umbrella body, the Association of Kenya Insurers (AKI).

‘Currently, insurers make their own assessments, usually based on the uniqueness of each case at hand. Having the grounds for not rejecting claims spelled out is a mixed bag for the industry,’ said William Kiama, the AKI manager for general insurance business.

‘For instance, reporting a claim late may, in some circumstances, mean the insurer cannot collect any evidence to determine whether they are dealing with a genuine claim.’

Mr Kiama said while many insurers may not have a problem with settling a claim for drivers with expired licences, doing so for those whose premiums they have not received would be impractical.

‘We understand the spirit of the guidelines is for consumer protection, but it should also strike a balance with the industry’s ability to fairly assess and manage risks. Our members are still going through the draft up to November 5, after which we will state our position,’ he said.

IRA data shows complaints against insurers rose for the fourth straight year to 1,962 in 2023, surpassing the 1,878 in the previous year.

Delayed settlement of claims accounted for 1,045 or 53.3 percent of the complaints, followed by 370 cases of denied claims (18.9 percent) and 227 cases of unsatisfactory compensation (11.6 percent).

In the half year ended June 2025, insurers rejected claims worth Sh1.51 billion compared with those worth Sh879.85 million that were declined in a similar period last year.

Kenya’s insurance penetration rate – the ratio of premiums to gross domestic product – remains below three percent compared to the world’s average of seven percent, despite the country’s relatively mature financial sector.

The new guidelines also aim to rein in the delays in claims settlement, which has seen many Kenyans view insurance as a last resort product rather than a financial safety net.

If adopted, insurers will be required to acknowledge receipt of claim notifications within two working days and to provide clear instructions on the documents needed for processing.

Once all required documents are received, insurers will be required to acknowledge this within another two days and settle the claim immediately if the liability is clear.

If further assessment or investigation is required, the insurer will be required to appoint an insurance service provider, such as a loss adjuster or investigator and communicate this to the claimant.

Once the assessment or investigation report is received, the insurer will have seven days to make an offer or communicate the rejection, complete with reasons.

The proposed guidelines also seek to standardise how motor vehicle valuations are done.

All vehicles must be valued at policy inception and upon renewal, with the valuation forming the basis for determining compensation.

This proposal aims to eliminate disputes arising from undervaluation or inflated depreciation during claims.

The provisions effectively strengthen consumer rights and limit insurers’ discretion to reject claims without clear justification. They will also speed up the claims settlement process.

Insurers will be required to develop detailed claims handling procedure manuals-covering every step from notification to settlement for all classes of business. The manuals will include expected timelines for each stage and define internal controls and reporting systems.

Insurers will also be expected to update customers regularly on the progress of their claims and to establish a well-resourced customer service function to handle queries and complaints.

The High Court has ordered real estate and property management firm Lloyd Masika Limited to disclose its financial records to Stanbic Bank Kenya, escalating a debt dispute triggered by alleged inflated asset valuations.

The court granted Stanbic Bank’s application compelling Lloyd Masika to produce its books of account, audited financial statements, bank statements, title documents, and such other records relevant to the recovery of the contested debt.

The unprecedented decision comes after a public auction of the firm’s assets, which recovered less than two percent of the outstanding debt.

The legal battle traces back to February 2018, when Lloyd Masika valued three Machakos County properties (Machakos/Ndalani Phase II/461, 462, and 465) at Sh87 million open market value and Sh56.5 million forced sale value.

Relying on this valuation, Stanbic Bank advanced a Sh40 million loan to an unnamed borrower.

Trouble began when the borrower defaulted, prompting Stanbic to commission a revaluation that pegged the same properties at Sh17 million open market value and Sh13.1 million forced sale value-a huge drop from Lloyd Masika’s initial assessment.

Stanbic was aggrieved with the occasioned loss because it advanced a loan facility on the footing of Loyd Masika’s report.

The dispute was referred to arbitration, and in December 2021, the arbitrator found Lloyd Masika ‘wholly negligent in submitting false valuation reports,’ holding the firm liable for the Sh40 million loss Stanbic incurred.

The arbitrator noted the valuations fell ‘outside permissible margins of error’ and ordered Lloyd Masika, a prominent real estate firm, to pay Sh44 million, including costs.

Despite the company’s attempts to set aside the award, the High Court upheld it as binding in April 2023.

However, Stanbic’s recovery efforts hit roadblocks after Lloyd Masika defaulted on repayment, leading to a public auction that raised only Sh1.1 million, of which Sh706,335 was remitted to the bank. The lender said the debt balance remains unpaid.

It accused the company of concealing assets and sought court orders to compel directors to submit to oral examination as to the debts owing and means of satisfying the decree.

The bank hinted at plans to lift the corporate veil should evidence emerge that directors fraudulently transferred company assets to evade creditors.

Lloyd Masika’s directors opposed the application, arguing they had initiated a separate case at the High Court to enforce a Sh500 million professional indemnity insurance policy from UAP.

They insisted that this insurance policy constitutes a “chose in action” (a legal right to sue) capable of satisfying the decree and that the bank’s application for disclosure of financial books was therefore premature. The company argued that the bank’s application was intended to embarrass and blackmail the directors.

“The bank knowingly contracted us under an agreement requiring this insurance. Their application is premature and violates our constitutional property rights,” the directors stated in court filings.

However, the court dismissed Lloyd Masika’s objections, noting that the existence of an insurance claim did not exempt the firm from disclosing other financial affairs.

The court held that the insurance claim does not preclude the decree-holder from invoking Order 22, Rule 35 of the Civil Procedure, which allows decree holders to apply for the disclosures.

‘The purpose of this provision is to enable the decree-holder to obtain information on the company’s assets and financial affairs. Whether or not the insurance claim ultimately satisfies the decree is a separate question that does not foreclose discovery of other potential assets,’ ruled the court.

The ruling shows that upon furnishing the bank with the stated documents, the lender will be at liberty to apply for the cross-examination of the company directors in court, potentially leading to piercing the corporate veil-a rare move that would expose directors’ personal wealth to recovery efforts.

The preferred contractor for the Nairobi-Nakuru-Mau Summit Highway is heading into talks with the government seeking a raft of tax reliefs-including a 30-year corporate income tax exemption on toll revenues.

The consortium says the goal is to keep tolls affordable for motorists while making the project bankable for investors over the life of the concession.

A summary of the evaluation report published by the Kenya National Highways Authority (Kenha), the contracting authority, shows that the consortium of China Road and Bridge Corporation (CRBC) and the National Social Security Fund (NSSF) Trust has requested 18 tax exemptions. The government has since settled on the privately-initiated-proposal (P-i-P) for the CRBC-NSSF consortium.

Some of the tax sweeteners the bidders are looking for include relief from county cess and other levies that they argue raise the cost of delivering Sh170 billion toll road from Nairobi to Mau Summit in the Rift Valley.

However, the government has insisted that the CRBC-NSSF consortium should enter negotiations having designed the project under the existing legal tax regime.

The requested adjustments may only be considered for discussion at a later stage, and cannot be treated as pre-conditions for moving the project forward.

‘The Proponent is to proceed to the next stage subject to unequivocal and unconditional confirmation that it shall.apply the existing legal tax regime to the project,’ reads a summary brief of the project development phase documents for CRBC and NSSF. This sets a firm baseline for talks.

The CRBC-NSSF consortium has sought exemptions on virtually every tax applicable to the project, including value-added tax (VAT), corporate income tax, withholding tax and import duty-cost items they say feed into the eventual tolls that users pay.

The bidders argue that targeted reliefs would ease cash flow pressures and support faster delivery.

The group is seeking a corporate income tax holiday on toll revenues collected from motorists using the upgraded road over the 28-year concession period. They also propose that toll fees should not be subjected to the 16 percent VAT. Their view is that trimming these charges will reduce operating costs and help keep the price per kilometre in check for users.

The CRBC-led consortium has proposed a base toll of Sh8 per kilometre, adjustable to reflect inflation and exchange rate movements.

Under this approach, the toll would start at a set level and then rise modestly each year to account for the cost of money and imported inputs needed to maintain the road.

The proponent also wants VAT zero-rating for goods and services procured locally and imported for use on the project. This covers the construction of the road from Nairobi via Nakuru to Mau Summit, and the Nairobi-Maai Mahiu-Naivasha link. They further seek excise duty exemptions for imported or locally purchased vehicles above 1,500cc used on the project.

Additional requests include exemptions from import duty and the Export and Investment Promotion Levy on equipment and materials used on the road.

The consortium also proposes withholding tax exemptions on payments to non-resident expatriates during construction and operation, covering income, dividends, insurance premiums and interest on loans. They want similar relief for payments to resident contractors and agents working on the scheme.

Beyond operating taxes, the bidders want changes to the Income Tax Act to improve cash flow over the concession. They seek permission to carry forward tax losses from the project throughout the period by amending Section 15. They also want relaxation of interest deduction limits so all project-related interest can be deducted during the concession.

In addition, they propose a Capital Gains Tax exemption when the project special-purpose vehicle’s shares are transferred during the concession and again when the road is handed back to the government. This would require changes to the Eighth Schedule of the Income Tax Act.

The consortium also seeks relief on stamp duty. It wants renewal of a discontinued legal notice that granted exemptions for secured loan agreements used to fund strategic infrastructure. It further asks for renewal of Legal Notice 60 of 2016 to exempt stamp duty on the initial nominal share capital of the project company.

At the county level, the bidders want local levies and cess to be waivable under existing law. They point to the Public Finance Management Act, 2012 and county Finance Acts, which allow County Executive Committee Members for Finance to waive or vary county taxes, fees and charges under set criteria and proper documentation.

Taken together, the bidders say these measures would lower financing and transaction costs, ultimately helping to keep toll fees affordable for motorists.

The government, however, faces tight fiscal constraints and is likely to be cautious about granting extensive concessions when public finances are strained.

A massive nine out of every 10 of the Sh65 billion unclaimed assets, including cash shares and dividends, are worth below Sh1,000, piling pressure on the Unclaimed Financial Assets Authority (UFAA) to lower the cost of reunifying the properties with their owners.

Auditor-General Nancy Gathungu revealed that 17.7 million of the 20 million idle assets in the books of UFAA, or 88.5 percent as of the financial year ended June 2024, are worth sums below Sh1,000.

Cash sums below Sh100 formed the bulk of the idle asset records forwarded to the UFAA, with 61.5 percent or 12,318,000 falling under this category.

The Auditor-General said that holders of small amounts were forced to incur high costs, such as travel expenses and certification fees, when claiming the money from the agency. This resulted in most of them forgoing the money.

All claimants are required to present claim forms duly commissioned along with certified copies of the national identity card and the Kenya Revenue Authority PIN certificate. The cost of certifying the documents is an average of Sh500.

Claimants are also required to physically visit the office of the unclaimed asset holder to obtain an official letter, increasing the time and cost involved in lodging the claims.

‘Due to the non-differentiated nature of the claim process, apparent owners of unclaimed financial assets that were relatively low in value incurred the same cost as high-value claimants. Consequently, fewer claims were lodged, leading to a low reunification rate,’ reads the report by the Auditor-General.

The National Treasury was cited for failing to implement proposals by UFAA to simplify the claims process. The agency had proposed the use of a single standardised form to be signed by the claimant without certification by a judicial officer or legal practitioner. The small amounts accumulated to form a huge sum, with the authority previously disclosing that assets worth less than Sh5,000 totalled Sh43 billion.

These small amounts have been attributed to people forgetting their bank accounts, ignorance, relocation, and death.

Mobile money has also been cited for the small records, as dormant accounts are passed on to new users.

On the upper side, 2,000 records worth between Sh500,000 and Sh750,000 were submitted to the authority. Records worth more than Sh100,000 but below Sh500,000 were 22,000.

The auditor general urged UFAA to make use of Huduma Centres to decentralise its services and increase the rate of reunification with rightful owners of assets.

‘The audit established that the authority intended to deploy their staff in the Huduma Centres, although they had yet to recruit the required staff. This contributed to the low number of claims lodged and ultimately the low reunification rate,’ said Ms Gathungu.

As of August 2024, the authority had received Sh65 billion from holders of unclaimed assets, with four percent of the assets reunified with their rightful owners.

Assets are considered unclaimed if they are dormant for a long period. The period differs between asset classes; for example, dormant bank accounts become unclaimed after five years, while utility deposits such as water and electricity are marked unclaimed two years from the date service is terminated.