Category: Business Daily

Before World Bank cut ties with Webmasters for listing ‘fake’ experts for a project in Somalia, the company and its founder, James Ayugi, had already hit the headlines for the wrong reasons back home.

Mr Ayugi and Webmasters, the company behind the eCitizen platform, were recently banned from World Bank-funded projects for five years, adding to the controversies that have dogged the techpreneur since he built the expansive digital platform in 2013.

The World Bank took the action after claims that the company listed two individuals as ‘experts’ in a tender bid document for a project in Somalia financed by the bank.

The ‘experts’ later told investigators that they had been listed by Webmasters for the job without their knowledge, sparking the debarment from World Bank projects.

Mr Ayugi insists the company has records showing the two professionals, who are Somalia citizens, did indeed apply for the jobs and sent their CVs.

The debarment is a major blow for Mr Ayugi because it was through the ‘World’ in the multilateral lender’s name that he took his projects across the globe – from Iraq and Bangladesh to Zambia, Rwanda, Benin, Lesotho, South Sudan, Somalia and Malawi.

And it was the ‘Bank’ in World Bank that helped ensure governments had the money to pay for them.

If the World Bank made Mr Ayugi famous around the globe, eCitizen may have made him infamous at home, where hardly a government project is mentioned without a whiff of controversy.

Indeed, without the eCitizen tag, Mr Ayugi and Webmasters’ debarment might barely have made headlines.

In March last year, it emerged that eCitizen was being run by a consortium of three companies – Webmasters Kenya, Pesaflow and Olivetree – all associated with Mr Ayugi.

At the heart of the controversy is the Sh50 charge imposed on every transaction a Kenyan makes on the platform, described as a ‘convenience fee’.

Mr Ayugi says Webmasters only receives a fraction of this fee for being the brains behind the technology and for maintenance of the platform.

He has no regrets being associated with eCitizen, an idea he conceived around 2013 and which he believes has had a huge impact on Kenyans.

‘It is a privilege to be associated with eCitizen as James and as Webmasters,’ he says.

‘We don’t feel offended because these projects are working. The projects are successful and a source of pride.’

However, the noise around eCitizen pales in comparison with the World Bank debarment, which could leave a deeper scar on Webmasters’ reputation just as the firm seeks to venture into the territory of creating solutions that directly affect citizens.

The World Bank says Webmasters Kenya presented the two professionals as key personnel for a contract, with the company confirming their availability during negotiations.

The pair later denied authorising the use of their CVs or participating in the assignment.

‘That is a story for another day,’ Mr Ayugi says when confronted with the World Bank’s claim that the professionals denied authorising the use of their CVs.

‘The project manager contacted them and how they shared all those things. These are things that are available,’ he says.

According to Mr Ayugi, the two may have found other opportunities and forgotten that they had sent their resumes and other details.

‘Nitajuaje mtu wa Somalia? (How would I even know someone from Somalia)?’ asks Mr Ayugi, adding that part of the condition for the project was for Webmasters to hire local talent.

He says the company later found a replacement, and the project – which involved developing the Somali government’s digital services platform – was eventually completed and handed over to the government.

Although Mr Ayugi has perfected working with governments, he feels this is having a toll on him and Webmasters and would like to pivot to open-market tenders.

At the time of the interview, he wears a matching black suit, a black T-shirt and his trademark black ascot. This time, the dreadlocks that usually protrude from the sides are gone. It is, perhaps, part of the transition.

‘The World Bank shaped the person I have become and the company we are. Most of our projects were financed by the bank and we appreciate that,’ the 41-year-old says.

Mr Ayugi, who denies any wrongdoing and insists that the Somalia project was successfully handed over to the government, sees the debarment differently.

To him, the World Bank is merely handing Webmasters over to the world – an opportunity to transition from being a purely GovTech firm to building solutions that directly benefit citizens.

‘With our skills and knowledge, you will be seeing these solutions. Now we won’t be wasting time on tender preparations,’ he says.

‘We’ll be developing solutions that will solve problems citizens face every single day.’

It might or might not work for Mr Ayugi. The transition will not be easy for the techpreneur behind one of Kenya’s most expansive digital platforms, which has brought hundreds of government services onto a single online platform.

Webmasters’ relationship with the World Bank, which would eventually give birth to eCitizen, started in 2008, when Ayugi was just 23. He had been bitten by the computer bug.

His childhood dream of becoming a star musician that saw him hitch a ride from Busia to the capital city was still alive.

At the time, the World Bank Group’s private-sector investment arm – the International Finance Corporation (IFC) – was looking for a local company to customise for Kenya an e-registry developed by a Norwegian firm.

Mr Ayugi says the IFC took a chance on him, despite his lack of international experience, ‘because I was very energetic’.

‘I believed I could deliver anything,’ he says.

Before then, he had already started working with the government, designing a website for the Ministry of Lands in 2005.

The relationship would then blossom, with the World Bank and Webmasters walking in lockstep across the planet, initially helping governments digitise services and improve the ease of doing business.

Eighteen years later, the relationship has soured, with Mr Ayugi saying he would like to move on from the break-up. But walking away may not be that easy.

Kenya Power is in the spotlight after the public procurement watchdog found irregularities in a Sh1.86 billion tender for enlisting 2,810 private security guards.

The Public Procurement Administrative Review Board (PPARB) nullified the entire tender after it identified several flaws in the procurement process, such as conflicting rules on the number of guards, splitting zones despite a requirement to award them in full, unexplained changes to winning bids, and using due diligence to eliminate bidders at the preliminary stage.

The dispute arose from a tender advertised by Kenya Power on February 27, 2026, for guarding services under two categories – Class A and Class B.

The tender attracted 70 bids, and its rules required each security zone to be awarded to one bidder while limiting every company to 200 guards, even though a region described as Stima Zone required 245 guards.

For Class A, Ismax Security Ltd, Lavington Security Ltd, Spyeagle Security Services Ltd and Sumich Solutions Ltd were proposed as successful bidders and recommended for 715 guards cumulatively, and a combined price of Sh677 million for the two-year contract.

Ismax was allocated 206 guards, Lavington (200 guards), Spyeagle (200), and Sumich 109 guards. Class B involved 15 firms covering 2,095 guards at Sh1.18 billion.

Riley Falcon Security Ltd, whose bid was rejected in Class A because its prices were deemed ‘not competitive’, challenged the decision before the Board.

The Board’s decision reveals that Kenya Power’s General Manager for Supply Chain and Logistics had recommended terminating the procurement on June 9.

He said the process had raised ‘material governance concerns’ and recommended that the procurement be terminated. His review raised concerns over the evaluation process, including the way the tender’s award requirements were applied and how the procurement process was conducted.

But on June 11, the company Accounting Officer rejected the recommendation, approved the Evaluation Committee’s proposed awards and directed that the concerns be recorded as ‘lessons learnt’ for future tenders.

Riley Falcon then sought review, arguing that Kenya Power had rejected its bid because its prices were ‘not competitive’, although that phrase was not a disclosed evaluation criterion or accompanied by a benchmark.

Kenya Power defended the decision, saying Riley Falcon had passed preliminary and technical evaluation but lost at the financial stage because its prices were higher than those of successful bidders.

The utility said the tender used the Lowest Evaluated Cost Selection method and could not lawfully recommend a higher-priced bidder.

Kenya Power also defended awarding 206 guards to Ismax Security Ltd, arguing that the 200-guard limit had to be read together with the requirement that entire zones be awarded to one contractor.

However, the Board found the tender created an impossible choice.

The rules required each zone to be awarded in full, while also limiting a bidder to 200 guards. Yet Stima Zone alone required 245 guards.

The PPARB said complying with the 200-guard limit would require splitting the zone, while awarding it in full would breach the limit.

‘This inconsistency was inherent in the Tender Document itself,’ the Board said, finding that the competing requirements created uncertainty over how the evaluation should be conducted.

Western Region was shared between Sumich Solutions Ltd and Lavington Security Ltd, while Nairobi Region was shared between Ismax and Spyeagle Security Services Ltd.

This breached the requirement that zones be awarded in full, according to the Board. Ismax was also recommended for 206 guards despite the stated 200-guard ceiling.

The Board further found that Ismax’s original Nairobi price was Sh9 million, including VAT, but the Evaluation Report recommended Sh7.5 million without explaining how the lower figure was calculated.

The Board also considered Riley Falcon’s conflict-of-interest allegation involving Sumich’s majority shareholder and director, Jackline Lanoi.

Riley produced a company record showing Saruni held 800 of Sumich’s 1,000 shares, or 80 per cent, and alleged she was a serving National Police Service Chief Inspector.

The Board rejected the allegation because Riley produced no appointment letter, employment record or official evidence confirming her alleged public-officer status.

‘A finding of breach of Section 59 of the Public Procurement and Asset Disposal Act cannot be founded on conjecture or unverified allegations,’ the Board said.

The Board found wider procurement failures. It said the preliminary evaluation, financial evaluation and due diligence had not complied with various sections of the procurement law.

‘The defect originates from the Tender Document itself and is therefore incapable of being remedied through a re-evaluation,’ the Board said.

It nullified the June 12 award notifications and the entire procurement, directing Kenya Power to begin afresh after reviewing the tender document.

In Bhutan, South Asia, she could have become a monk. In Australia, where she was born, she realised that nothing would happen unless she made it happen herself. In Latin America, she learned Spanish so she could work in a non-English-speaking country. She lives her life as if she were answering a survey about it; if someone asked, ‘Where next, Nikki?’ her answer might be, ‘Spin the globe. Pick a spot.’

That’s how Nikki Germany, the CEO of Moringa School, has lived her life, guided by the philosophy of picking the road less travelled. ‘Everybody can choose their own life, rather than the life that society expects of them,’ she says. Nikki is no stranger to brave choices, like choosing not to have children or trading the relentless chase of status for the deeper currencies of freedom, health, and community. You can spend your days trying to ‘make it’ in life, but to Nikki, it is much more important that life is what you make it.

Have you had an interesting life?

Well, I like to do interesting things. And obviously, what’s interesting to me is different from what’s interesting to everybody else. But in my professional career, I love what I do: making sure that young people have the technology skills they need for the future. I have a wonderful partner, great friends, and family, so I’m really lucky. I recharge by being in nature. I do a lot of hiking-some walking in Ngong Forest with my partner, meeting friends in Karura Forest, some cycling, some running. Triathlon sometimes [chuckles].

In what ways have these sporting pursuits transformed your life?

It’s been a great way to meet people. Because I’ve moved around a lot in my life, being part of sporting communities has been a great way to meet people.

Having travelled and lived in so many places, what’s your golden rule for travel?

Be open to meeting people. Talk to people. When people travel, they’re often open to conversations. You can meet interesting people who you might not necessarily meet in your normal life.

What’s a travel experience, good or bad, that has stayed with you?

I was travelling in Bhutan with a very close friend of mine. We were hiking with our guide and camping on the top of a mountain, and we convinced our guide to let us go for a walk on our own. We came across a monastery, and there were hundreds of monks playing volleyball because it was the end of their season and they were just about to go home. We spent the afternoon playing volleyball with the monks. And then they said, “Well, we’re having a big party tonight; you should stay for our party.” We stayed for the party [chuckles].

What’s one rule you live by?

It’s up to me to make my own opportunities. I don’t think that things are going to come to me. I actually grew up in a village in Australia, where nothing was going to happen unless I made it happen. I put my hand up for jobs when I’m not even really sure if I’m comfortable doing them. I learn languages so that I can go and live in other countries. So, I’d say the rule I live by is creating your own opportunities.

Did your career unfold according to plan, or was it happenstance?

Haha! When I was 20, I would never have thought that I would be living in Kenya, running an educational institution. But I did think that I would travel the world and do many different things, and so I’ve created that path that’s led me here.

How has your worldview been challenged or changed?

People laugh because I’m Nikki Germany, from Australia, living in Kenya. The thing that’s been so great about so much world travel is that you just really get to understand other cultures so much better and appreciate other cultures.

What have you become less certain about as you’ve grown older?

It doesn’t all have to be about success and achievement. I recently did an exercise around values. When I look at my values now compared to my values when I was in my twenties, when I first did that kind of exercise, they’ve completely changed. I used to value achievement and success and those types of things, and now it’s much more about contribution and freedom. I’ve become less certain that there’s one right way to live life.

What has become easier with age?

You don’t beat yourself up so much. When you’re young in your career, everything you do seems to be so important. You say the wrong thing in a meeting, you make a mistake in a presentation, and you’re like, “Oh no, my career is over.” As you get older, you’re like, “It’s okay, right? We’re all human.’

What lie has success disabused you of?

I used to think it was very important to follow the career ladder. From a young age, I really wanted to be very successful and to have a lot of achievements in my professional life, and that has happened. And so, that was a lie I told myself: that success was important, when actually, that’s not what’s important. What’s important is that you’re doing something that has meaning in the world, that helps others, and that you’re contributing by developing young talent.

What’s your definition of success?

My definition is having people around you that care about you, and that you care about. Doing something in life that is meaningful to you-whether that’s paid work, entrepreneurship, or volunteerism-and being healthy. That’s the other thing as you age: you really start to think a lot more about, “Am I healthy?” And I’m so grateful that I’m healthy.

Over the course of your life, is there something that you wanted but, with retrospection, you are glad never happened?

I wanted to be a journalist because I wanted to travel to war zones and tell the stories of what’s happening there and, sort of, off-the-beaten-path places. But I think it’s very good that I didn’t become a journalist, because even though I like to write, I like to write on my own timeframe about my own things, not on other people’s deadlines. I would not have made a very good journalist [chuckles].

What part of your personality do people underestimate the most?

I have a different personality outside of work than I have inside of work, and I’m not proud of this. But I think in each sphere, the people that I see at work underestimate one side of me, and the people that I have in my personal life underestimate the other. In my personal life, I’m actually quite laid-back, fun, quiet, “let’s do interesting things.” I’m a very good listener, a very good supporter, and not very Type A. So people who know me personally can underestimate me because I actually don’t seem to have a strong personality. At work, I am the opposite: Type-A, high energy, and high standards.

What habit has best improved your life?

Being willing to ask for things. Saying, “I’d like to do that.” Being willing to say, “Can I do that?” in a professional environment. “I see you’re working on that interesting project. I’d like to be part of it. Can I join?” Sometimes people would say yes, and sometimes they’d say no. But at least I asked, and sometimes you get things that you don’t think you can get just by having the guts to ask.

Has ambition made your life simpler or more complicated?

Honestly, it’s probably made it more complicated. I grew up in a village, literally, and so many people stay there and have a very simple life: a family, a job, and they’re very happy. When you have ambition, you’re always wanting the next thing, and I’m really happy with the way I’ve lived my life; I wouldn’t trade it for a simple life. But always wanting the next thing can mean that you’re not always as content where you are. You’re always thinking about the future and thinking about, “Okay, what’s next, and what’s next, and where am I going, and where am I getting to?” And so I think that makes life harder in a way, but in an interesting way. And I wouldn’t trade it for simple.

What’s the weirdest piece of advice you’ve given yourself?

Take the road less travelled. So, when I’ve had big decisions to make in life, I’ve had a tendency to choose the option that’s been more challenging, that’s been less certain, and I think that has enriched my life in many ways-even though it can be very scary at the time.

How does that look in your personal life?

I don’t have children. And that was a choice I made because I was so interested in exploring the world, and having all of these experiences; I felt that was a better path to take than the road of having children. And that’s a decision that I don’t regret at all. For many people, having children is the right road, but some people have children just because society expects it of them.

How would you like to be remembered, if at all?

I would like people to say I impacted their careers. In a previous role, I had hundreds of young people here in Kenya working, and I was working very closely with all of them. And they often reach out and say, “You really impacted me. I learned things from you, and my career is progressing because of some of the things that I learned from you.” And that’s really meaningful to me.

What do you miss about your younger self?

Haha! I don’t feel much different than I did. You feel more confident in yourself and who you are, and that your choices are fine. I think I miss most… when you’re young, the whole world is open to you. There are so many doors that you can walk through, and there’s such a sense of possibility. And as you walk through some of those doors, the next time there aren’t as many doors, and then you walk through one of those, then there’s even less. I feel like the number of doors that are open to me is less. And I miss that feeling from being 20.

What does your weekend plan look like?

It will probably be a quiet weekend because my partner has been away for a month, and he’s just coming back on Saturday morning. We’ll probably go for a walk in Ngong Forest and go out to dinner with friends.

What’s your most controversial opinion?

Oh. Everybody can choose their own life rather than the life that society expects of them. And the fact that I chose to have a life without children, I think, is controversial. It certainly causes a lot of concern here in Kenya [chuckles]

Kenya’s reliance on electricity imports increased in the six months to June 2026 as the country raced to avert potential rationing, with the share of supplies from Ethiopia and Uganda rising to 12 percent of the total supplies to the Kenya Power.

An analysis of official data shows that the share of imported power on the grid rose from 10 percent in the comparable period of 2025, mainly tied to more inflows of hydropower from Ethiopia.

Kenya has turned to Ethiopia to plug the gap in local electricity generation and meet a fast-growing demand, a move that, however, leaves Kenya exposed in the event of major disruptions in the neighbouring country.

Ethiopia supplied Kenya Power with 7.88 million kilowatt-hours (kWh) in the six months to June this year, or 10.3 percent of the total supplies, up from 7.26 million kWh or eight percent in the same period last year.

A fast-rising demand for power from households and businesses has piled pressure on Kenya Power and eaten into the extra generation capacity available above demand, forcing the utility to ration supplies especially during peak hours to protect the grid.

Kenya Power Managing Director Joseph Siror recently warned that the increased dependence, mainly on Ethiopia, leaves Kenya in a precarious position in case of major disruptions to hydropower plants.

‘My concern is that this is hydropower from these countries and in a situation where there is a serious drought, then they might be left in a position where they might be unable to meet this obligation (supplying the agreed amounts of electricity),’ he said.

Supplies from Uganda marginally rose to 158,390kWh or two percent of the total electricity bought by Kenya Power in the review period, up from 114,120kWh or 1.5 percent in the six months to June last year.

Extra generation capacity available above demand, technically known as spinning reserves, shrunk to less than 3.3 percent as at June this year, which is significantly lower than the internationally allowed range of 20 percent to 35 percent.

Thinning reserves heighten the risk of blackouts because the grid is unable to meet sudden spikes in demand, triggering a collapse of the grid.

Kenya’s peak demand (highest point of electricity usage) currently stands at 2,439.06 megawatts (MW) recorded on December 4, 2025.

The fast-rising consumption from households and businesses and increased connections have left Kenya Power scrambling to meet the demand, forcing increased reliance on Ethiopia and Uganda.

Kenya has a 25-year Power Purchase Agreement (PPA) with Ethiopia and a power exchange deal with Uganda and Tanzania.

Under the running 20-year PPA with the Ethiopian Electric Power (EEP), which was signed in 2022, Kenya is entitled for the supply of 200MW of electricity priced at $0.65 cents per kWh, or approximately sh84.03 per kWh.

The deal with EEP allows Kenya Power to tap 200MW at peak and 65MW during off-peak. Kenya Power will take up an extra 200 megawatts (MW) of power in December 2026 under a PPA with Ethiopia to plug a gap in supply. This means that Kenya Power will, from December 2026, tap a total of 400MW of electricity under the PPA with EEP. Under the deal, Kenya will, from December, take up 400MW at peak times but cut uptake to 150MW during off-peak times.

Kenya is also seeking to change the exchange deal with Uganda to a PPA in a bid to import more hydropower from Kampala.

Under exchange deals with Uganda and Tanzania, the country that imports more from the other within a defined period pays.

Gardi Okello suffered a serious back injury from ‘ego lifting’ and spent six months recovering before realising he could solve two problems at once.

The first was personal. He needed to take stretching seriously, both before and after exercise, especially as he got older, when injuries can take longer to heal and recovery becomes more difficult.

Old Mutual Holdings net profit rose to Sh882 million in the half-year to June 2026, exceeding its 2025 full-year earnings in six months, riding on the benefits of disposing of underpriced medical customer accounts.

Underpriced customer accounts in insurance refer to policyholders whose premium payments are lower than the true level of risk they pose to the insurance company. The insurer’s net profit was 176 times the Sh5 million posted in a similar period last year and more than the Sh856 million it recorded in the 12 months ended December 2025.

Management disclosed that the insurer enjoyed a 2.8 percent profit margin from its medical business this year, being the first time it had a positive return since 2023 from the underwriting business, citing repricing of its business.

Underpricing of customer accounts marks the cutthroat competition in the industry, resulting in quoting lower prices than the cost of managing the customer’s medical expenses when they arise.

“We have now priced the portfolio properly on a case-by-case basis, and really at the end of the day some people said we are expensive and went to get service from somewhere else. But we were okay with that because we were losing money on some of the accounts,’ said Old Mutual Holdings chief executive officer, Arthur Oginga.

The repricing saw the lender record underwriting profit of Sh287 million compared to a loss of Sh303 million in the previous reporting period despite its insurance revenues remaining flat at Sh16.3 billion.

The insurer’s operating costs grew by five percent, which was attributed to renegotiation of supply contracts. Some of the renegotiated contracts include those with pharmaceutical companies on the price of drugs, especially for chronic disease patients.

‘We are also using artificial intelligence (AI) in managing fraud and waste,’ said Mr Oginga.

Old Mutual reported a 69 percent fall in confirmed fraud losses compared to the similar period last year, with Sh60 million of attempted fraud prevented in the first half of the year.

The insurer had an investment income of Sh3.1 billion, a 26.1 percent drop from the Sh4.1 billion earned in the previous review period.

Its asset management business recorded a 34.4 percent growth in commissions earned to Sh1.37 billion following a 32.4 percent rise in its portfolio to Sh192 billion.

Old Mutual has also been repositioning its regional business by exiting the South Sudan and Tanzania markets while increasing its focus in Uganda.

The insurer appointed Edith Jiya as its chief executive officer in Uganda to spearhead the consolidation of its three businesses in the market – insurance, investment and wealth management.

The appointment of Ms Jiya, who has previously served as chief executive of Malawi, also signals the transition of Uganda to a standalone market reporting to South Africa.

The insurer’s board of directors did not recommend an interim dividend.

Old Mutual is in the process of using a portion of its share premium, Sh4.6 billion, to wipe out part of its Sh7.5 billion accumulated losses so as to return to dividend distribution.

Besides the balance sheet restructuring, the insurer is also disposing of its properties in the region valued at over Sh19 billion to unlock cash for business, repayment of its debts and distribution to shareholders.

Management disclosed that it was in negotiations with possible buyers for its iconic Old Mutual Towers located in Upper Hill, Nairobi.

CIC Insurance Group net earnings have raced past its entire 2025 profit in the first six months of this year, boosted by investment income and land sales despite underwriting revenue falling by more than half.

In the half-year ended June, the group’s net profit rose 70.4 percent to Sh1.08 billion, more than doubling the Sh513.82 million it earned in the whole of last year.

The 70.4 percent growth was supported by stronger investment returns and increased income from other business segments. Investment return rose to Sh3.96 billion from Sh2.75 billion a year earlier, helping push up the net investment revenue.

The group bucked the trend of falling investment returns in the industry by growing its net investment income by 11 percent to Sh1.67 billion. It also benefited from Sh962 million booked from the sale of part of its land, from which it booked a gross margin of Sh341 million.

‘We are pleased with the growth trajectory of our business and remain confident in our ability to scale even greater heights,’ said Patrick Nyaga, group managing director at CIC.

The revenue from land sales as well as the pharmaceutical business more than compensated for the 67.2 percent decline in insurance service results to Sh42.03 million from Sh128.23 million due to elevated claims and reinsurance expenses.

CIC peers, including Britam Holdings, posted a decline in net investment income on the back of a declining yield curve but were saved by a recovery in underwriting performance. Insurers invest premiums in Treasury Bills, Treasury Bonds and other fixed income assets and therefore when returns on such investments are falling it results in slowed growth in investment income.

The insurer’s asset management unit generated Sh1.04 billion in revenue from asset management services compared to Sh829 million in June 2025, helping CIC avoid the industry-wide softening of investment income.

Insurers with stronger asset management units that have diversified into classes such as equities have enjoyed increased returns in an environment of reduced returns from government paper.

CIC General insurance business posted a 33 percent rise in pre-tax profit to Sh734 million as the growth in insurance revenue outpaced the growth in claim costs. Over the same period, pre-tax profit of CIC Asset Management rose by nine percent to Sh526 million as that of the life insurance unit retreated to Sh190 million on higher claims.

Across the industry, top players including Jubilee Holdings, Britam and Old Mutual have grown their half-year earnings.

Jubilee Holdings maintained an interim dividend of Sh2 per share after half-year net profit rose by 12.7 percent to Sh3.45 billion, helped by the life insurance business.

Britam Holdings’ net profit rose 53.3 percent to Sh2.666 billion, helped by increased underwriting performance and reduced expenses.

Old Mutual Holdings posted a sharp turnaround in its half-year performance, with net profit rising to Sh882 million from Sh5 million a year earlier as the exit from loss-making insurance lines and cost controls boosted earnings.

The National Treasury has cashed 41 percent of its annual domestic borrowing target just two months into the fiscal year, signalling a rush to capitalise on a highly liquid market to secure early funding to plug its budget deficit.

New disclosures by the Central Bank of Kenya (CBK) show that the net borrowing in July and August stood at Sh406 billion, against the full fiscal year target of Sh987.4 billion. This means that the Treasury has already tapped 41.11 percent of its annual domestic target with 10 months still to go.

The State mainly borrows from the domestic market via Treasury bonds, with a smaller share coming through Treasury bills and overdrafts from commercial banks and the CBK.

August’s infrastructure bond issuance, which netted Sh312 billion from record bids of Sh460.4 billion from investors, was key to the State’s efforts to accelerate its borrowing in the domestic market.

The large uptake of debt also gives the Treasury crucial headroom in case revenue continues to lag behind target, without risking a spike in interest rates, which happens when investors sense that the government is desperate for cash.

‘It makes sense for the Treasury to frontload the borrowing and send a signal to the market that its appetite for cash will be contained down the road, setting interest rate expectations for the rest of the year,’ said Churchill Ogutu, the head of research at Capital A Investment Bank.

‘It therefore reduces the pressure to make large borrowings towards the end of the fiscal year.’

In September, the CBK will be back in the market for a further Sh120 billion through two reopened bond issuances, potentially pushing it past the 50 percent mark in borrowing within the first quarter of the fiscal year.

The first sale targeting Sh60 billion opened on Thursday, with the CBK reopening a 15-year bond that was first floated in 2019 at an annual interest rate of 12.34 percent, and a 30-year paper first sold in 2011 at 12.5 percent. The issuance closes on September 2.

The second sale of the month that will also target Sh60 billion will see the CBK reopen a 20-year bond from 2019 at 12.87 percent and a 30-year paper first issued in April 2026 at a rate of 12.5 percent.

There are no bond maturities in September, meaning that all the cash raised from the sales should ideally go towards the net borrowing column, unless the government utilises some of it to settle the maturing Sh213 billion Treasury bills.

T-bills are usually rolled over by investors when they fall due, especially in a period of high liquidity when there is competition to place cash in government securities.

Potential upward revisions in the borrowing target through supplementary budgets have also made it prudent for the CBK to keep ahead of the borrowing target in recent fiscal years.

Revenue shortfalls and higher spending have become a common feature of government budgets, with the domestic market shouldering the burden of meeting the expanded budget deficit.

In the fiscal year ended June 2026, the Treasury opened with a projected budget deficit of Sh923.2 billion, equivalent to 4.8 percent of GDP.

Spending and revenue revisions through the year, however, meant that the actual deficit rose to Sh1.26 trillion by the end of June 2026, equivalent to 6.8 percent of GDP.

In the previous year, the budget statement (of June 2024) had set the budget hole at Sh597 billion, but three supplementary budgets pushed the total deficit to Sh1.034 trillion, financed through domestic borrowing of Sh854.5 billion and external borrowing of Sh179.7 billion.

A higher domestic borrowing target usually signals to the market that the government is likely to be more accommodative of higher yield demands to close the larger funding gap.

After what seemed like a rebound in 2024, Kenya Airways sank deeper into the red last year, and even deeper this year, after posting a 31.9 percent growth in its half-year loss to Sh16 billion.

While its operations have improved, bringing in more revenues, it is navigating elevated fuel prices and an industry-wide shortage of aircraft, engines and spare parts that has kept some of its planes on the ground and constrained its capacity.

The national flag carrier is also seeking an investor to support its growth plans, while working on its balance sheet and looking at leasing aircraft as a bridge to longer-term fleet expansion.

In this interview, KQ’s acting chief executive George Kamal discusses the carrier’s plan to return to profit, its plans to grow the fleet, the search for an investor and the restructuring of its debt.

KQ’s loss has continued to rise. What is the plan to turn it around?

This year, we have been significantly impacted by the Middle East crisis, which increased our fuel costs by up to 66 percent, year on year.

That’s average prices compared to average prices for the first half last year. But since the beginning of the war, our fuel costs have surged by 72 percent. That is the only reason we made a loss.

If fuel costs remained stable and we’re operating at full capacity, we would have reported a completely different number. Because we have seen a growth in demand. Our cabin factor increased by 9 percent, but our capacity was down.

And despite that, we recorded a growth in revenue. The second highest half-year revenue in the history of KQ. That tells you we have a viable business.

Without the rising fuel costs and the constrained capacity, would you have made a profit?

Absolutely. You know, our fuel costs rose by up to 72 percent, but we’re only allowed to put a fuel surcharge of up to 20 percent on fares.

The rest we have to absorb. I cannot pass it all to the customer. I cannot do that.

So this year we had multiple challenges. Rising fuel costs and the capacity constraints.

If you look at the impact they’ve had on us, yet we posted a growth in revenue, that tells you where we would have been if not for the challenges.

Is the capacity problem unique to KQ, and do you expect it to persist into next year?

It is not only a Kenya Airways’ issue. Globally, the leading original equipment manufacturers Boeing and Airbus have a huge backlog of over 16,000 planes. With this backlog, those OEMs pull out most of the spares to put in the new aircraft so they can deliver. So I can’t find any in the market, unless I look for them in the secondary market, which we don’t do.

At the same time, the same shops that work on their own engines to assemble them are the same shops I need to do my overhaul. That’s why the turnaround time went from 90 days to 120. Now it goes even beyond 120. But why does it appear more visible in KQ? Because the number of aircraft is very limited.

When do you expect the capacity constraints to ease?

We’re planning that by Q1, and that’s conservative, we should have our 787s up and flying. All of them. There’s no other discussion, except for the normal maintenance. Usually January is not a very high-season month, so you use it for maintenance. That’s normal maintenance, which takes 30 days up to three months. That’s it, and then it’s good.

Am I going to have the capacity I’m looking for? No. Because I’m looking for a bigger plan. Think big, you grow big. I’m looking to bring new aircraft and grow the capacity.

What are you doing to expand the fleet?

First of all, let me assume that I’m looking at buying. The earliest I can get the aircraft is 2032, 2033. That’s the minimum. This leaves me only with the option of leasing. Leasing a new aircraft is a bridge solution to the operating aircraft. We will use that bridge solution to get the capacity required to achieve 60 by 2030. Today we are 42.

But this 60 is not cast in stone. It is not a silver bullet. It might be a little bit higher, might be a little bit lower, depending on the availability of an investor and the investor appetite.

What kind of investor are you looking for?

All options are on the table. We have people approaching us from the beginning of the year. At first it was one, all of a sudden it became three and four.

Now we have to do the governance process. The governance process starts with an IM (Information Memorandum). You set it out in the market, you say this is what we are open to, then you go to the IM, you show the interest, then all of them come in.

Everybody can come with his own ability. You cannot dictate. I cannot say it’s equity or not. One can say, ‘I can give a loan.’ Another says, ‘I need equity.’ Another says, ‘I have aircraft and I can take equity by putting my aircraft in.’ And so on and so forth.

We are open to everything and everybody. Very transparent process because we are publicly listed. No hidden agendas. Everything is on the table.

How can an investor invest in a debt-ridden company?

An investor will not invest in debt. The investor is coming to invest in growth. We are in the process of discussing with all the shareholders. You saw that the support from the government is very strong. We are having discussions. What we’re looking at today is restructuring the balance sheet at some stage when there is an investor coming in, and we’re looking at different options.

Will the government take up all the debt?

No, I don’t think the government will take on any debt. As I understand it, restructuring will only happen if there is an investor. Why? Because the investor will come and take part of it, converting it into equity in the company. But the government will not be able to take on that debt.

Where would they get the money from? Who will pay for it? Yes, there will be restructuring and so on. Restructuring only occurs when the investor is in a position to support it.

Younger generations aged 18-44 years are the strongest newspaper readers in Kenya, driven by digital access to news, a new survey has revealed.

The Communications Authority (CA) said that up to 20 percent of Gen Z (ages 18-27) and up to 22 percent of Gen Y (ages 28-44) adults read newspapers across the 2025/26 fiscal year-the highest level among all age groups.

Gen Y and Gen Z read newspapers using both traditional formats (print and e-editions) and online formats (website and app articles).

‘Newspaper reading in Kenya shows a noticeable difference between men and women, with men consistently reporting higher readership than women in all quarters. By age, people aged 25-34 years are the most active newspaper readers, recording the highest levels of readership,’ the CA said.

‘In contrast, newspaper reading is lower among teenagers aged 15-17 years and adults aged 45 years and above, suggesting that print media appeals most to young and mid-career adults.’

Gen Y (Millennials), born between 1980 and 1996, account for about 22 percent of Kenya’s population while Gen Z, born between 1997 and 2012, represent 33.42 percent.

Millennials are mid-career adults who strive to read newspapers and other material to stay informed about professional and economic trends as well as other public affairs.

Both Gen Z and Gen Y are digital communities and use their phones for most tasks, including reading newspapers in formats such as e-editions and newsletters. Most Kenyans rely on smartphones as their main means of accessing the internet, highlighting the central role these devices play in staying connected and accessing information.

CA data shows that internet use in Kenya is highest among young people aged 15-24 years, where more than 70 percent are online. Internet use then steadily decreases with age, with the lowest levels seen among those aged 45 years and above, where fewer than 40 percent report using the internet.

‘High internet access in Kenyan urban areas is largely due to strong digital infrastructure, including wide broadband coverage and reliable mobile networks. Urban residents also benefit from higher income levels and better access to digital devices, making it easier for them to adopt new technologies,’ CA said.

‘In addition, internet use rises steadily with higher Living Standards Measure (LSM) levels, showing a clear connection between income, education, and digital participation in Kenya’s evolving media landscape.’

In the CA survey, newspaper readership in Kenya is significantly higher in urban areas compared to rural regions.

‘Urban dwellers consistently show greater engagement with print media, reflecting better access to distribution channels and higher literacy levels,’ the regulator said.

CA said that in the fourth quarter of 2025/26, newspaper readership was highest in the Lake region at 21 percent, followed by Rift at 20 percent, indicating relatively stronger engagement with print media in these areas.

‘Most other regions recorded modest recovery or remained broadly stable, while North Eastern had the lowest readership at eight percent, highlighting a generally soft but regionally varied newspaper consumption landscape,’ it said.