Category: Business Daily

An oil marketer has lost its attempt to overturn a Sh578.56 million tax demand from the Kenya Revenue Authority (KRA) for filing the appeal 10 days out of time.

Evon Energy International Limited had sought the intervention of the Tax Appeals Tribunal to overturn the claim, but all its arguments were thrown out for filing crucial documents past the legally permitted time.

With the long rains here, now is a good time to talk about financing the agricultural sector, the sufficient lack of which continues to hinder the sector from unleashing its true transformative potential.

Despite agriculture accounting for 34 percent of the general economy and generating about one out of 10 formal jobs, the sector receives minimal funding. Data from the Central Bank of Kenya (CBK) shows the agricultural sector received Sh134.2 billion in credit out of the total Sh3,797.5 billion extended to businesses, accounting for just 3.53 percent of the total private sector credit.

Manufacturing accounted for Sh580.2 billion of loans to the private sector, or slightly more than four times what went to agriculture. To be fair to commercial lenders, they are shy about lending to the sector because it is a risky affair.

Last year, Kenya faced its worst flooding in over two decades, and just a year before, the country experienced the most severe drought in 40 years, both of which devastated crops and livestock production.

Still, agriculture is an important sector for the economy because it offers the path of least resistance towards poverty reduction.

After all, increasing productivity is simpler than other sectors. For example, to boost productivity a combination of availing the right seeds, fertilisers, and credit, as we have seen in the maize sub-sector, which hit an estimated record 70 million bags in 2024, up from 48 million bags in 2023 or a 46 percent increase.

This was attributed to the availability and stocking of the right fertilisers and seeds. This bumper harvest is not only creating jobs, but it’s also directly benefiting Kenyans by significantly reducing the price of maize flour, their dietary staple.

The above example is evidence that financing the agricultural sector by providing funds for purchasing quality fertilisers, seeds, pesticides, feeds, and other inputs can have a palpable effect on lives and livelihoods.

However, how can we effectively lend to the sector while managing risks and ensuring returns for lenders? Partnering with companies that are using technology to overcome these hurdles offers a promising solution. Agri-fintechs are such companies. These startups are using technology-driven insights to enable them to better lend to players in the agricultural value chain in better ways than traditional lenders, which even the banking regulator recognises.

The CBK’s November 2024 Agricultural Sector Survey Report highlights an improvement in access to credit for the agricultural sector, attributing this in part to digital lending, which effectively reaches businesses in the agricultural value chain in remote areas lacking brick-and-mortar banks or saccos.

Despite its immense potential for improving lives and livelihoods, the sector is underfunded. Therefore, there is an urgent need for innovative agricultural financing. Partnering with agri-fintech companies offers a promising solution not only for Kenya but also for the rest of Africa.

Agri-fintechs are also more adaptable or malleable to the realities of the agricultural sector value chain. For example, the cash flow cycle for the agricultural sector is different than other sectors.

The lion’s share of funding is often required ahead of the planting season but sales happen after harvesting which is months away.

Even where there are financial products that reflect these dynamics, traditional lenders are more comfortable working with larger firms in the sector and not SMEs, who have relationships, collateral, etc. but these only make up a small percentage of the larger agricultural value chain, leaving many underserved.

Speed is also one area where agritechs have an advantage over other mainstream lenders.

Speed is particularly important because often it can mean the difference between missing an opportunity or making a loss. Agri-fintech solutions facilitate rapid lending decisions, often within days, a crucial advantage given the unpredictable nature of rainfall patterns or market demands.

In most Nairobi satellite estates, progress has meant concrete, gates, and a quiet disappearance of neighbourly ties. But as new gated communities rise and glass, Gikambura somehow seems unchanged. It feels like a village that remembers itself even as it grows.

Here, amid Kiambu’s quiet hills, neighbours still share flour and stories, farmers still deliver milk at dawn, and men and women still meet in chamas, bringing cash in hand rather than M-Pesa transfers. That enduring sense of community is Gikambura’s quiet charm in a county racing toward modernity.

When the Covid-19 pandemic struck in early 2020, Africa found itself waiting at the back of the queue for vaccines and financial support.

Whereas wealthier nations secured vaccine doses in advance, most African countries had to wait for months because they lacked domestic manufacturing capacity and emergency financing buffers.

When help finally arrived, it was through global donation mechanisms such as COVAX (Covid-19 Vaccines Global Access).

It was yet another painful reminder of how dependence on external aid often leaves the continent vulnerable. More importantly, it underscored the need to urgently mobilise domestic capital and provide local solutions to our challenges. In other words, how can we unlock the vast pools of capital already within our borders instead of relying on aid?

The recent aid cuts are yet another reminder that we should strive to build independence and resilience, thereby reducing our dependence on donations.

Over the years, I’ve seen African innovators with brilliant ideas struggle to find funding, not because their ideas are not viable, but because financiers are too cautious to provide the initial capital required to test new ideas or markets due to perceived risks.

This has led to a development paradox of sorts. Sample this: The continent faces a $200 billion (Sh25.9 trillion) annual gap in financing the Sustainable Development Goals.

Yet Africa has more than $2 trillion (Sh259 trillion) lying dormant in pension funds, insurance companies, and sovereign wealth funds.

This capital could fund the hospitals, schools, clean energy, and job-creating enterprises the continent urgently needs.

This clearly shows that Africa does not lack capital; all it requires is risk-tolerant capital. Most private investors, such as pension funds and insurance companies, still perceive investing in social ventures as too risky. This is precisely where catalytic capital comes in.

Catalytic capital refers to risk-tolerant funding that absorbs early risk so that later investors can come in safely to scale.

It funds innovation, supports testing of new products, services, markets, and derisks social investments to make them attractive to private capital. It is the kind of capital that helps test concepts until they become attractive to private capital for scaling.

In simple terms, it is the ‘patient money’ that helps build bridges between philanthropy and profit. It can come from philanthropies, development finance institutions, governments, or even visionary corporates who are willing to test new models before the market catches up.

Without catalytic capital, countless game-changing African enterprises will remain trapped in what some call the ‘missing middle’ – too big for grants, too small or risky for commercial loans. These are the enterprises that could transform healthcare, agriculture, education, and clean energy if only they could access the right kind of financing.

And time is not on our side. Africa’s population is expected to double by 2050. The continent needs to create about 15 million jobs annually by 2030 to absorb new entrants into the labour market.

Yet our small and medium enterprises, the engine of employment, remain underfunded. At the same time, climate change, food insecurity, and gender inequality are deepening.

If we fail to mobilise the catalytic capital required to crowd in private capital now, the continent risks deepening poverty, worsening unemployment, and remaining highly vulnerable to future crises.

One of the biggest misconceptions about social investments on the continent is that Africa lacks investable opportunities. That is not true. Across the continent, entrepreneurs are innovating daily – from solar irrigation systems in Kenya to telemedicine platforms in Nigeria, and affordable private schools in Ghana. What they lack is early-stage capital that can absorb risk and prove commercial viability.

Another misconception is that you can’t make money while doing good.

The truth is that social investments can be profitable for social investors. Standard Chartered’s Opportunities 2030 report shows that sectors such as healthcare, education, and agriculture offer both strong financial returns and deep social impact. Profits in development are not bad when they are fair. They make social solutions sustainable and reduce their dependence on grants.

It is encouraging that we are already seeing examples of catalytic capital in action across Africa. In several countries, guarantee mechanisms have been used to unlock debt financing for small and medium-sized enterprises once considered too risky by banks.

In South Africa, similar guarantees have enabled medical students from underrepresented backgrounds to access education loans.

In Kenya, social impact bonds have supported reproductive health services for thousands of young women. In all these cases, philanthropic capital was used to derisk the programme to pave the way for scaling by other funders.

To make catalytic capital work, governments, philanthropies, and private investors must work together. Governments can formulate enabling policies and deploy limited public funds in catalytic ways through results-based financing or co-investment funds.

Philanthropies can provide risk capital and technical assistance. Private investors can then come in to scale proven models. Together, these actors can reduce risks and unlock larger flows of private capital.

In Kenya the affordable housing conversation has often been framed as a social imperative and rightly so. But what if building homes was also the most powerful way to build our country’s industries? Housing is the single most practical industrial policy the country can execute over the next 25 years and beyond.

Kenya’s housing deficit is often estimated at about two million units, with some 250,000 homes needed annually against a supply of approximately 50,000.

This figure does not include the secondary deficit arising from the need to replace poorly constructed buildings developed in the last two decades. It also doesn’t factor in the emerging county-level demand, as counties become the new economic centres.

With our population estimated to grow to over 84 million by 2050, demand for homes and related infrastructure including commercial, logistics and social infrastructure that accompanies them, will only accelerate. The question therefore begs: how can we link this projected housing boom to our industrialisation ambitions?

Consider this: every housing unit provides a huge demand for steel, cement, ceramics, sanitary ware, roofing, timber, paints, wiring, glass and aluminium. Since materials account for roughly 40 to 50 percent of total housing development costs, housing can be a reliable long-term source of industrial consumption.

Today, manufacturing contributes just 7.6 percent of gross domestic product (GDP), a decline from historical levels and below the global mean.

Turning housing into a multi-year industrial output demand signal is how we can change that. The scale is striking. Today the estimated manufactured inputs for a single housing unit, from steel and cement, to tiles and taps, costs about Sh29,500 per square metre.

If Kenya were to ramp up housing production to 200,000 units per year by 2030 and sustain this to 250,000 units thereafter, roughly six million new homes would be built by 2050.

Assuming an average unit of 50 square metres, this translates to 300 million square metres of newly built-up area.

At the estimated manufactured input per square metre, this construction boom would generate approximately Sh9 trillion in demand for manufactured goods, thereby injecting Sh354 billion into our economy every year. This would be transformational for our manufacturing GDP.

Where this money goes is therefore critical. We already have a strong cement production base. Despite a challenging 2024, cement output has rebounded 17.3 percent year-on-year in the first half of 2025 to 4.85 million tonnes.

Yet, for other critical items like ceramic tiles, sanitary ware, fittings and many steel products, our market is flooded with imports. If we don’t act decisively, this housing boom will not build Kenyan industries; it will just bloat our national import bill.

We don’t have to look far for inspiration. Egypt used State-backed housing projects and a new city construction to fuel an industrial surge. It is now becoming a major exporter of cement and other materials.

Similarly, South Africa built an integrated manufacturing cluster for cement, glass, ceramics and aluminium that now serves the entire region, fuelled by its housing agenda. Its cement capacity is about 15 million tonnes a year. These nations prove that a housing agenda, when linked with smart policy can build entire industries.

For Kenya, the economic case is clear. The government must treat housing as both an industrialisation policy as well as a social policy.

This starts by mandating and enforcing local manufactured content thresholds in all housing projects, which can be gradually increased over time.

As a starting point, the current Affordable Housing Programme should sign long-term procurement contracts that give our factories the confidence they need to invest in kilns, rolling mills and other production lines.

This appears to be ongoing to some extent but remains sub-scale. We must create a reliable pipeline of public and private housing projects that gives the local manufacturing industry a reason to build capacity now.

Housing is about giving our people dignity. But it can also be the industrial flywheel that powers our economy for the next 25 years and beyond. This will leave Kenyans not only better housed but with a much larger, more competitive economy. The choice is whether to import that future or make it right here in Kenya.

Mombasa Cement Limited plans to build a 10-megawatt (MW) power plant at its factory in Vipingo, Kilifi County, to help cut energy costs.

The power plant, which will rely on a combination of coal and biomass fuels.

Severally is a word Kenyans love to use-and quite frankly, often abuse. In fact, Kenyans severally use the word severally incorrectly, which drives my nitpicking and pedantic mind absolutely nuts.

And yes, that was a deliberately incorrect use of the word severally, which is defined as: separately, individually, singly, discretely; respectively. The antonym for the word is jointly. But enough of the English grammar lessons for now.

Kenya’s plan to lay a high-speed fibre optic cable from Isiolo to Mandera has entered a critical stage after the completion of an environmental and social impact assessment, setting the stage for the rollout of the project expected to open up the country’s most underserved digital corridor.

The proposed 740-kilometre link, to be implemented by the Information and Communication Technology Authority (ICTA), will run through Isiolo, Garissa, Wajir and Mandera counties, extending the national broadband backbone to the border with Ethiopia and Somalia.

Peter Drucker is quoted to have said, ‘Being at least as good as the leader is a prerequisite to being competitive’. His statement strikes at one of the foundational principles of performance management.

The lowest quality aspect of being competitive is employing benchmarking. It remains a time-tested strategy for organisations and investors when assessing and managing performance.

As organisations implement their sustainability strategy-to-reporting, they must apply this same principle.

While the sustainability journey will differ and requires tailoring to suit the context of each organisation, there are many opportunities for benchmarking that they must leverage to assess the reasonableness of their outcomes and hold themselves accountable.

Benchmarking is also being embraced by sustainability reporting standards, such as the International Sustainability Standards Board, which is responsible for issuing the IFRS Sustainability Disclosure Standards.

Therefore, organisations need to extend the use of benchmarking, a fairly familiar concept, to their sustainability universe.

Some of the areas where benchmarking can provide insights to organisations on their sustainability journey include the following.

The materiality process is a building block for sustainability and sustainability reporting. Organisations should apply benchmarking to this process to enrich their analysis of material sustainability risks and opportunities that affect their industry and competitors.

They can also use it to assess the reasonableness of their materiality process outcomes relative to peers in the market. This process will provide management with valuable insights for continuous improvement. Another important aspect often overlooked when benchmarking is sustainability reporting. The reporting maturity journey for organisations requires the use of benchmarking to not only set ambition but also drive performance.

The benchmarking exercise does not require a report that is better overall, but rather one that incorporates best-in-class practices in specific sections.

Therefore, the goal is to seek out peers who have demonstrated a maturity in specific reporting aspects and use that to enrich and drive improvements in an organisation’s own reporting or process.

Other opportunities for applying benchmarking along the sustainability journey include technology, governance, and risk management. Organisations should encourage the use of benchmarking across their sustainability work streams where relevant.

Benchmarking is a valuable external perspective that organisations can apply when validating and monitoring performance and outcomes.

Tax collections from betting are expected to more than double in the current financial year to June 2026, despite policy shifts through the Finance Act 2025 that slashed the excise duty on wagered amounts and withholding on winnings to five percent.

Parliament Budget Office (PBO) -which advises lawmakers on economic and budget affairs-projects collections of betting taxes to climb to Sh11.4 billion a year, from Sh5.4 billion as the State nets a windfall from changes in the applicable levies on gambling.