Category: Business Daily

At a recent end-of-year staff celebration, a truth about workplace dynamics revealed itself. In preparation for the event, the HR department had initiated a poll asking employees to nominate outstanding departments, managers and individuals in various categories, like innovation, contributions, leadership, among others. The response was enthusiastic. But when the final list was read, the HR department and its members were missing.

The HR team that designed the poll, championed the recognition, and even moderated the event, was not recognised by the employees whose welfare it had safeguarded throughout the year.

This came against a background of implementing enhanced employee retirement benefits, bereavement cover, mentorship and employee assistance programmes, lactation rooms, installing an HRIM System for seamless processes, and resolving countless staff issues with fairness.

These were in addition to the important but often invisible responsibilities of strategic workforce planning, talent development, succession management, and driving culture transformation. None of these efforts translated into recognition.

The outcome was hard to ignore. The incident triggered a moment of reflection about why HR remains one of the most misunderstood and least appreciated functions in some organisations. Some reasons come to mind.

Staff benefit from HR’s work daily, but the relationship they have with the HR staff after recruitment is often indirect and direct when there is a problem.

Employees are more emotionally connected to their line managers, who guide their routines, solve operational problems, and advocate for them in visible ways like providing additional resources.

HR, on the other hand, works behind the scenes, designing systems rather than leading teams, negotiating benefits rather than delivering daily instructions, and handling sensitive issues.

Many of HR’s most meaningful achievements are long-term, like organisational change, others are drastic-like downsizing, mergers, which affect job security. Many are confidential, especially those involving strategic business shifts, discipline, conflict resolution, gri

This structural distance often creates a skewed perception. Employees tend to remember HR’s role in difficult moments, but overlook the quiet wins. A well-negotiated medical cover does not come with HR’s name on it.

An effective HRIMS is experienced as convenience, not as a strategic investment. A stable workforce, improved productivity, and career progression appear to happen naturally, even though they are outcomes of deliberate HR planning and painstaking work with executives and department heads.

Talent management and career development, which require endless dialogue, analytics, coaching, and alignment with business strategy, rarely attract praise because the value unfolds gradually and indirectly, and may face resistance.

Why is HR misunderstood and not fully appreciated by employees? The answer is not for HR to demand praise, but to rethink how it builds connections with employees.

HR carries the burden of advocating for employees in boardrooms, absorbing organisational pressure, counselling distressed staff, and simultaneously enforcing decisions that can make them appear not compassionate.

A department responsible for people must invest in emotional presence. Simple, consistent interactions, brief departmental visits, informal conversations, participation in team moments, and regular communication can humanise HR.

Employees are more likely to appreciate what they understand, and more likely to trust what feels familiar. When HR communicates its achievements throughout the year, shares impact stories, and uses data to demonstrate progress in engagement, wellness, and talent growth, it builds visibility without appearing pushy.

Internal storytelling becomes a strategic tool for redefining the department’s identity. Instead of saying ‘introduced lactation rooms,’ say ‘We helped new mothers return to work with comfort and dignity’.

Qualify and quantify achievements using metrics and data like, number of jobs saved, careers grown from learning and development programmes, workplaces made safer and reduction of accidents, emotional health improved through wellness initiatives, systems strengthened, and efficiency improved through an HRMIS system. Create small celebrations of HR initiatives, like an enhanced new health cover.

Visibility alone is not sufficient. Organisation Leadership teams should create frameworks where cross-functional contributions are recognised alongside operational achievements.

Leaders could allocate budgets for departmental appreciation initiatives like luncheons or quarterly achievements. HR can guide such initiatives.

Recognition should not be a once-a-year moment; it should be a continuous culture-building process supported by deliberate leadership action.

The incident at the end-of-year party is therefore a reflection of a broader disconnect between what HR does and how the workforce experiences it.

For HR to be acknowledged as a true business partner, it must bridge the relational gap by being present, communicating effectively, engaging authentically, and amplifying its strategic value.

At the same time, the leadership must champion a culture where all contributors, including of HR department, are appreciated for the roles they play in sustaining organisational culture, performance and growth.

HR leadership must also interrogate its leadership styles. Well-meaning gains may be lost if the leadership does not demonstrate skills that create a strong connection with employees.

HR must also tell its own story more meaningfully, intentionally, and leadership recognise that the people who care for the employees also deserve to be felt and cared for.

As the controversial SIM card registration rules are enforced, telecommunication companies could find a silver lining in the use of fingerprints to curb fraud threats.

The Ministry of Information, Communications and the Digital Economy, in May, released new guidelines for SIM card registration under the Kenya Information and Communications (Registration of Telecommunications Service Subscribers) Regulations, 2025.

The new regulations require mobile subscribers to submit biometrics such as fingerprints, expanding beyond traditional identifiers such as names, ID numbers and dates of birth.

‘The new rules were developed to protect citizens from SIM card-related fraud and other criminal activities, including identity theft, SIM box fraud and scams, strengthen the identity of telecommunication services and support secure access to digital services such as mobile money, e-government and e-commerce,’ said the Communication Authority in a statement last month.

Although the rules generated a public storm, telco industry insiders say the adoption of biometric verification in telecommunication services could be a win for the sector that has long grappled with cases of fraud that are growing more sophisticated with advancements in technology.

Sources said some telcos are expected to start collecting fingerprint details when registering new and existing subscribers.

‘The key focus will be on fingerprints for SIM card registration, which I see as a big advantage for us telcos who have been frustrated by fraud,’ a source told Business Daily.

Pain for telcos

Fraud has been a pain for telcos, resulting in big cash losses. For example, in 2023, security agents arrested eight suspects accused of fraudulently generating SIM card numbers and taking out more than Sh500 million in loans from Safaricom’s Fuliza mobile overdraft service.

In the last financial year, leading mobile services provider, Safaricom, listed fraud and social engineering as the principal risks facing it and its customers.

‘Due to the wide use of M-Pesa services across the country, our M-Pesa customers and partners are exposed to M-Pesa fraud due to social engineering, fraudulent SIM swaps, digital identity theft, and mobile apps takeover,’ stated the firm in its annual report.

In 2021, Safaricom launched the Jitambulishe service, allowing prepaid and post-pay customers to enroll their voice and use it to access services such as getting their PUK, unlocking M-Pesa accounts, and retrieving their M-Pesa PIN and replacing their lines.

Kenya’s SIM registration environment already requires operators to gather customer details, validate identity documents, and maintain updated records to reduce impersonation, SIM-swap schemes, and criminal use of untraceable numbers.

Telcos, however, continue to routinely face cases where fraudsters exploit weak onboarding checks, recycle stolen identity cards, or submit manipulated documents during SIM replacements, causing financial losses and eroding trust in digital services.

These vulnerabilities have made SIM swaps particularly damaging as criminals can take control of a customer’s calls, messages, mobile money approvals, and banking alerts within minutes of replacing a line.

A biometric anchor eliminates these weaknesses by tying a subscriber’s registration to a non-transferable physical characteristic that cannot be forged, borrowed, photocopied, or reconstructed from stolen data.

Multiple countries across the world have already adopted similar approaches, using fingerprints or facial recognition to authenticate individuals during SIM purchases and high-risk account changes.

Such adoptions have been driven by rising fraud levels worldwide, pushing regulators and operators to move beyond simple document checks that criminals routinely forge or manipulate.

The concept of biometric use is already prime in the financial sector, with several commercial banks in the country, including Absa Bank, KCB Group, and Stanchart, supporting facial recognition as a login option to their mobile banking platforms, subject to the capabilities of users’ devices.

According to the Central Bank of Kenya (CBK), the adoption of new technologies such as biometric verification and big data analytics comes as banks explore the potential opportunities of new business models, including virtual assets, seek to improve operations, and minimise fraud.

Traditional password

‘Application Programming Interfaces (APIs) have been adopted by most banks with a 79 percent and 64 percent adoption rate by commercial banks and MFBs, respectively,’ explained the CBK in its latest annual report.

‘This was followed by Cloud Computing, Biometrics Technology, and Big Data and Data Analytics with an adoption rate of 42 percent, 40 percent, and 40 percent, respectively, across all banks,’ it added.

Biometric verification has been widely adopted in developing markets as an alternative to traditional password and PIN requirements that are considered by many as outdated in the face of emerging technologies such as Artificial Intelligence.

Some of the leading smartphone makers, including Apple and Samsung, have facial recognition and fingerprint authentication built into their devices that help users safely access their apps and personal data.

Last week, Australia implemented the world’s first social media ban for its citizens under the age of 16 in a bid to limit the harmful effects of the technology, including cyber-bullying and sexual exploitation of minors.

The ban, which has seen teens restricted from popular apps including Facebook and TikTok, will require social media firms to implement some form of biometric verification to ensure compliance.

In October this year, India started allowing citizens to approve payments on fintech platforms using facial recognition and fingerprints. Authentications are verified using biometric data stored in the state’s Aadhar digital identification system.

But telcos in Kenya will walk a tight rope on data privacy as they shift to biometrics for SIM card security.

In Kenya, the use of biometric verification for telecommunication services that include mobile money transfer will be closely watched to determine adherence to the data protection laws and other safeguards to users’ privacy.

According to the guidelines from the Office of the Data Protection Commissioner, ODPC, biometric data collection and processing by service providers should be lawful, fair and transparent, accurate and limited to the purposes of collection.

‘Clear policies and procedures for data retention and deletion must be established, defining specific purposes and retention periods,’ states the ODPC in the guidelines released earlier this year.

‘Prompt deletion or anonymisation should occur once the purpose is fulfilled to mitigate privacy risks from unjustified retention periods and ensure compliance with the Act and Regulations.’

The Uchumi Supermarkets share has shed 29.7 percent of its value in the last one week, handing investors who accumulated the stock at the peak of its recent rally a loss of Sh200 million on their holdings.

Uchumi closed at Sh1.30 per share on Tuesday, down from Sh1.85 per share a week ago, having fallen by between 9.4 percent and 9.7 percent in each of the last three trading sessions.

In the preceding four weeks, Uchumi was the fastest rising counter at the Nairobi Securities Exchange (NSE), rallying from Sh0.38 per share on November 11 after a disclosure that the company had made a rare profit of Sh8.8 million for the year ended June 2025.

The profit marked a reversal of a loss of Sh47.9 million in June 2024, as per disclosures in management accounts under Uchumi’s Company Voluntary management (CVA) framework.

The announcement of the profit triggered a buying frenzy on the share as speculators bet on the prospects of a turnaround at the company, despite its negative equity position and uncertainties over ownership of key assets such as land holdings.

As a result, the stock price rose fivefold from Sh0.38 on November 11 to Sh1.85 on December 9, before the price correction kicked in to pull it down to the current level.

The rally had handed investors a paper gain of Sh536.5 million at the peak price of Sh1.85 per share, with the company’s market capitalisation (the measure of investor wealth) rising to Sh675.2 million from Sh138.7 million. By the close of trading on Tuesday, Uchumi had a market valuation of Sh474.4 million.

This week, demand for the shares has also fallen, while the volumes supplied by those scrambling to offload their units have gone up.

In Tuesday’s session, investors traded 293,309 shares, but by close of trading the market had outstanding sell orders of about 5.06 million shares and no outstanding bids. At the peak of the rally on December 9, investors traded 4.39 million shares on the counter.

The price and demand swings illustrate the volatility of small stocks at the NSE, as well as the impact of material announcements on the performance of companies at the market.

In the case of Uchumi, the rally was triggered by the disclosures of the CVA report, prepared by Owen Koimburi of the business advisory firm Forvis Mazars Kenya, which showed that the company’s sales revenue rose from Sh63.5 million in the year to June 2024 to Sh123.01 million in the year to June 2025.

Uchumi’s biggest boost came from rental income, which was up five times to Sh62.7 million from Sh13.5 million in June 2024, largely driven by low cost household goods retailer China Square which leased the company’s Lang’ata Hyper Branch from June 2024.

As per the CVA disclosures, Uchumi has 11 tenants paying it a monthly rent of Sh5.94 million.

China Square pays Sh5 million or 84 percent of the monthly rental collections, followed by Paris Lounge Grill (Sh300,000), Isle Garden (Sh212,155), Sudo Liquor Store (Sh114,223) and Spatial Barberz (Sh64,655).

The CVA was set up in March 2020 to guide the company’s settlement of debt over a six-year period ending June 2026.

The latest report shows that the company has managed to pay 95 percent of the Sh245.9 million in debt it had planned to settle by the end of the period, with banks taking up the lion’s share at Sh146.5 million, followed by trade creditors and landlords at Sh9.84 million and staff salary arrears at Sh6.83 million.

In recent years, the government has intensified efforts to expand employment opportunities for Kenyan workers abroad while ensuring their safety, dignity, and fair treatment.

With an estimated four million Kenyans currently working overseas as of 2024, and hundreds of thousands migrating for work annually, labour mobility has become a critical component of the country’s employment strategy.

These reforms come at a crucial time. Kenya’s domestic labour market absorbs approximately 800,000 of the 1.2 million young people entering the workforce each year, leaving a significant gap that labour migration helps address.

Since September 2022, the government’s Kazi Majuu initiative has facilitated overseas employment for thousands of Kenyans, with an ambitious target of supporting one million workers annually over the next three years.

Recognising both the opportunities and risks inherent in labour migration, Kenya through the National Employment Authority (NEA) and the Ministry of Labour and Social Protection, has implemented comprehensive reforms designed to make migration safer, more transparent, and more beneficial for workers, which include;

At the heart of Kenya’s strategy is the negotiation and implementation of Bilateral Labour Agreements (BLAs) with destination countries.

These agreements establish clear frameworks for fair employment terms, worker rights protection, and dispute resolution mechanisms.

Kenya has successfully concluded agreements with six countries- Germany, the UK, Qatar, Saudi Arabia, Australia, and the United Arab Emirates. Negotiations are currently underway with 17 other countries, including Jordan, Oman, Bahrain, and Kuwait. Each deal is tailored to address sector-specific needs while ensuring protection for Kenyan workers.

Another significant reform has been the overhaul of the regulatory regime governing private recruitment agencies. For years, unscrupulous recruiters operating without proper oversight subjected Kenyan workers to exploitation, abuse, and in extreme cases, life-threatening situations. The human cost of this regulatory failure has been substantial.

The Ministry of Labour and Social Protection, working closely with NEA, has established stringent licensing requirements for recruitment agencies. Only compliant agencies meeting ethical and legal standards are granted licences, and their operations are subject to ongoing monitoring.

Those found engaging in fraudulent practices or worker exploitation face immediate de-registration. To date, thousands of non-compliant entities have been banned.

Enhanced oversight mechanisms now ensure adherence to ethical recruitment standards, with clearer guidelines on permissible fees, contract terms, and worker protections. This regulatory tightening aims to eliminate exploitation that has historically plagued the sector.

Kenya has also embraced digital solutions to enhance efficiency and transparency in labour migration. The centrepiece of this technological transformation is the National Employment Authority Integrated Management System (NEAIMS), accessible at www.neaims.go.ke.

Through NEAIMS, Kenyans can access verified overseas job opportunities, confirm the legitimacy of recruitment agencies, and apply directly for positions. Licensed agencies are required to recruit through the platform, creating an auditable trail that enhances accountability.

This digital approach significantly reduces the risk of workers falling victim to fraudulent recruiters operating outside the formal system.

The government strongly encourages all prospective migrant workers to use NEAIMS as their primary gateway to overseas employment opportunities.

Beyond regulatory and technological reforms, Kenya has implemented several measures designed to protect workers throughout their migration journey. All Kenyans travelling abroad for work must now obtain clearance from the Ministry of Labour and Social Protection.

This process ensures that workers are departing under legitimate arrangements. Before departure, they undergo orientation training covering their rights, workplace safety, cultural adaptation, and financial literacy, equipping them with essential knowledge for their overseas assignments.

Foreign employment contracts must now be attested by the Directorate of Labour, ensuring they meet legal standards and adequately protect workers’ rights before workers commit to positions abroad.

Further, Kenya has established labour attaché offices in key destination countries to monitor working conditions, address welfare concerns, and provide support to distressed workers. Upon arrival in their destination countries, Kenyan workers are required to register with the respective Kenyan mission, facilitating rapid assistance in emergencies.

NEA also conducts extensive awareness campaigns, educating prospective migrants on safe migration practices. These programmes cover how to identify job scams, verify registered agencies, understand contractual rights, and access legitimate opportunities through official channels.

Despite substantial progress, challenges remain. Ensuring consistent monitoring of worker conditions across diverse destination countries requires sustained resources and diplomatic engagement.

Some workers continue to bypass official channels, attracted by promises from unlicensed recruiters. Strengthening coordination between government agencies, diplomatic missions, and destination country authorities remains an ongoing priority.

The government continues to enhance its capacity to respond to distressed workers abroad, including repatriation support and reintegration services for returning migrants, areas requiring further development.

As these systems mature and expand, continued investment in monitoring, enforcement, and worker support will be essential. The success of these reforms will ultimately be measured not just in the number of workers deployed abroad, but in their safety, fair treatment, and the dignity they maintain throughout their overseas employment.

NEA remains committed to refining these systems based on feedback from workers, recruitment agencies, and destination country partners, ensuring that Kenya’s labour mobility framework evolves to meet emerging challenges and opportunities.

About 2,453 wealthy individuals offered Safaricom Sh39.9 billion for the concluded green bond in a span of 11 days, reflecting the millions in the hands of retail investors amid a recovering economy.

Safaricom disclosures show that individual investors placed 96 percent of the Sh41.86 billion for the bond, putting an average offer at Sh16.2 million per person.

The individual investors’ appetite reflects Safaricom’s appeal among retail investors, echoing the interest it received in 2008 when the telecom firm listed at the Nairobi bourse via an initial public offering, which buyers oversubscribed theirs by 670 percent.

But in a recovering economy, the placement of bids worth tens of millions within 11 days offers a sneak peek into Kenya’s growing income inequality, where wealth is concentrated in the hands of a small segment of the population.

Kenya’s economy has grown on average by 5.0 percent annually over the past decade, but the benefits have not been equally distributed, and the gap between rich and poor is rising, analysts argue.

The number of super-rich in Kenya is among the fastest growing in the continent, yet the economic benefits have not trickled down to the majority of Kenyans quick enough.

This also mirrors the measly share of 0.65 percent of all bank accounts, including those linked to corporate companies, which hold more than Sh500, 000.

‘Obviously you want a bond issuance to be successful, but you also want that success to be in a way that makes you feel that the issuance was broad-based. If we had a wish list, we would have wanted retail investor participation to be more than the rest,’ Dilip Pal, Safaricom Plc chief finance officer told the Business Daily in an interview on Tuesday.

‘Safaricom has in the past done that with the equity issue. We are also inching towards the same level of participation for bonds.’

This emerges in a period when retail investors have upped their investments in government papers and unit trusts, like money market funds.

Retail investors including individuals, private companies and self-help groups piled a record Sh1.44 trillion in government bonds and unit trusts at the end of August, up from Sh580.45 billion in August 2023.

This underlines the growing flight to passive investments over starting businesses in an environment where startups are strolling to survive.

The number of Kenyans investing in unit trusts more than doubled to 2.96 million in a year to September 2025, highlighting the scramble for collective investment products.

The assets under management in unit trusts reached a record high Sh679.6 billion in the period from Sh316.4 billion a year earlier.

The Central Bank of Kenya (CBK) revealed that individual investors controlled more than three-quarters of government bonds trading accounts.

CBK latest data showed that individual investors held 73,585 accounts or 79.4 percent of the 92,677 total DhowCSD accounts opened as of September 6, 2024.

Safaricom green bond received bids worth Sh41.6 billion, representing a 177 percent oversubscription from the targeted Sh15 billion.

The telecom operator accepted Sh20 billion from the offers by exercising a Sh5 billion green shoe option.

Investors participating in the offer will receive a tax free interest rate of 10.4 percent per annum for the five-year paper expected to mature in December 2030.

The notes were listed on the NSE on Tuesday, allowing investors to buy and sell the green bond.

Safaricom said it would use the Sh20 billion to finance new green projects and refinancing debt tapped earlier for sustainable developments.

The planned green projects include solar installation and the modernization of data centres, legacy infrastructure and network.

The projects are restricted in the Kenya market, with financing for the Ethiopia subsidiary done outside the green bond.

Safaricom will issue a second tranche of the Sh40 billion bond and the firm did not issue a schedule on when it will raise the remaining Sh20 billion.

‘The programme allows flexibility to also refinance eligible investments under the sustainable finance framework, but we are yet to decide on the quantum of debt to be refinanced at this point,’ added Dilip Pal.

Safaricom’s paper is the largest by a listed company and adds to the activity in the corporate bond segment that has been dwarfed by government securities.

Safaricom’s bond follows East African Breweries Plc (EABL) paper, which raised Sh16.7 billion last month to boost the brewer’s cash flow and clear debt obligations.

The brewer’s bond was also oversubscribed 52.4 percent giving EABL the option to absorb up to Sh6 billion offered beyond the Sh11 billion offered in the first tranche.

EABL has the headroom to borrow an additional Sh3.23 billion in extra tranches under the Sh20 billion bond.

The brewer made an early redemption of its previous five-year paper which had a Sh11 billion balance that was set to mature in October 2026.

EABL’s coupon was relatively higher than Safaricom’s, offering a fixed return of 11.8 percent.

Safaricom previously tapped Sh30 billion, sustainability-linked loan or green bond from a consortium of banks including KCB, Absa Bank Kenya, Standard Chartered Bank Kenya and Stanbic Bank Kenya.

A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.

The telecoms operator expects to spend between Sh54 billion and Sh57 billion for capital projects in Kenya over the 12-months period to March 2026.

Safaricom closed the half-year period ended September 2025 with a debt of Sh117 billion, including Sh61.2 billion in long-term borrowings and Sh55 billion in short-term borrowings.

Safaricom reported a 52.1 percent rise in its half-year profit to Sh42.7 billion, helped by a smaller loss in Ethiopia and M-Pesa’s double-digit growth.

The operator’s net profit grew from Sh28.1 billion a year earlier.

It is expected to declare an interim dividend in February next year.

Private investors seeking to use leased public land as loan collateral will now be required to provide third-party guarantors and strictly adhere to lease terms, under new Treasury measures to protect public assets from loss through loan defaults.

A new advisory from Treasury Cabinet Secretary John Mbadi to State officials said allowing private investors to use leased public land as collateral without adequate safeguards could expose the government to the risk of land loss.

Now, Mr Mbadi has moved to tighten controls on public land leased to private entities-especially within Special Economic Zones (SEZs) and Export Processing Zones (EPZs)-by introducing a stricter clearance process for investors seeking business loans using such land as collateral.

Under the new directive, investors intending to use leased SEZ or EPZ land to secure business loans will require explicit approval from the relevant board and the cabinet secretary of the line ministry before such land can be used as collateral.

Mr Mbadi said the application must be accompanied by clear conditions ensuring that all lease terms remain fully enforceable throughout the loan period and that any breach of terms automatically discharges the public entity from obligations related to the financing arrangement.

‘Any board and cabinet secretary of the line ministry approval-granting consent for the use of public leased land as collateral should clearly provide that all conditions of the lease shall apply during the term of the loan facility and any breach of the Lease terms shall discharge the public entity from any related obligations,’ said Mr Mbadi in the December 8 circular.

The investors will be required to provide a ‘comprehensive business continuity and repayment guarantee’ to safeguard public assets during the full duration of the loan. This will ensure public land is not placed at risk due to weak project financing or poor business performance.

Mr Mbadi said the State will roll out measures that prevent financial institutions from assuming ownership of leased land following loan defaults.

‘The government should implement policy measures that prevent the permanent transfer of leased SEZ/EPZ land or any other public entity land to financial institutions in the event of loan default, ensuring that land reverts to public ownership,’ he said.

The advisory also introduces stricter rules on lease structures. Master leases issued by the government must now be longer than any sub-leases by a minimum of 10 years.

The move aims to ensure the State retains long-term control over the land while allowing investors sufficient time to develop and operate their projects. In instances where the lessee intends to sub-lease the land, the terms and conditions will closely mirror those of the original lease agreement to prevent dilution of government protections through layered leasing arrangements.

‘A lessee who intends to use the leasehold interest as collateral must obtain the lessor’s written consent. The validity of the consent will be dependent on the lessee’s continued compliance with its obligations under the lease agreement,’ reads Mr Mbadi’s circular in part.

The Treasury’s directive comes on the back of increasing activities in SEZ and EPZ that have mounted pressure on the State to strike a balance between facilitating access to capital and protecting public resources.

Data from the State Department of Trade shows the number of EPZs grew by 32 in the year to June 2025 compared with 12 in the prior financial year.

The State Department said the target was surpassed due to the rigorous promotion activities and more inquiries turning into actual projects.

The review period saw EPZ firms export goods worth Sh126 billion, an 8.9 percent rise from Sh115.71 billion in the previous period. The value of local purchases from these zones hit Sh20 billion from Sh16.58 billion a year earlier.

Early this year, East Africa’s flower industry faced an unexpected threat. The False Codling Moth, a tiny larva, triggered sweeping regulatory action by the EU, placing billions of dollars in exports and close to a million jobs at risk.

For leading producers such as Kenya, Ethiopia and Rwanda, the response had to be swift and precise. What followed offers an account of adaptation, coordination and institutional resilience.

From April, all shipments entering the EU were required to meet tighter surveillance standards and far more exacting documentation requirements.

For Kenya and Ethiopia, the world’s top flower exporters, the implications were immediate. The market expected near flawless compliance, and any weakness in surveillance or certification risked disrupting trade.

Regulators and technical agencies moved quickly to translate the EU regulation into clear operational requirements.

They sought clarity on what constituted a credible Systems Approach, how surveillance should be structured, and which elements of documentation would attract scrutiny. Coordinated analysis helped reduce ambiguity and enabled national authorities to benchmark their readiness.

Attention then turned to strengthening systems that underpin compliance. The Kenya Plant Health Inspectorate Service, supported through the EU funded Business Environment and Export Enhancement Programme, reinforced surveillance and documentation, contributing to a successful DG SANTE audit in October.

Across the border, the Ethiopia Agriculture Authority, working with Ethiopian Horticulture Producers and Exporters Association and supported through an AFD-funded capacity building plan, strengthened the Systems Approach at both farm and airport levels.

Surveillance procedures were upgraded, inspection standard operating procedures were redrafted to align with international standards, and inspectors received targeted training ahead of the November DG SANTE audit.

Rwanda rebuild its sanitary and phytosanitary architecture through the Mastercard Foundation’s VIBE programme. The Rwanda Inspection and Competition Authority, working with National Agricultural Export Development Board, invested in traceability, inspection and monitoring across key value chains. The results have been felt across the region.

Kenya’s floriculture exports are projected to exceed one billion dollars for the first time. Ethiopia is expected to cross the half billion dollar mark. Rwanda is positioning itself to regain compliance and expand its horticultural footprint.

Thousands of workers whose livelihoods depend on the sector have avoided what could have been a severe economic shock.

The episode offers a broader lesson about modern trade. Quality alone is no longer sufficient. Market access increasingly depends on the strength of inspection regimes, the credibility of digital traceability systems and the agility of regulatory responses.

For countries that invest early in these systems, the reward is not only compliance, but resilience, influence and sustained growth in high value global markets.

As climate pressures intensify and importing economies tighten biosecurity controls, those with robust sanitary and phytosanitary systems will be better placed to withstand regulatory shocks.

Two related ideas featured prominently at a gathering of 300 educationists in Laikipia last Monday. When asked about their vision of Laikipia, they were emphatic. Good governance, and economic transformation.

To be like Singapore, they said. The latter resonated with the pitch by President Ruto, who in recent months has been talking about transforming the country, from a third to first-world economy, in our lifetime.

To put this vision in numbers, that means increasing the annual per capita gross national income from the current $2,550 to around $14,000, the equivalent of Sh152,000 per month.

The most commonly used categorisation of countries by income thresholds, is by the World Bank. Initially developed in 1989, the income classifications were designed to include all industrial countries in the high income ($6,000, at 1987 prices) category. The classification was partly to determine which (poor) countries would receive concessional lending terms.

Today, the income classification is mainly for statistical and analytical purposes and is no longer strictly tied to lending by the bank. The thresholds are updated every year on July 1st, ensuring they remain fixed in real terms and do not shift due to global price changes.

The gross national income (GNI) per capita for each country is calculated using a three-year average of exchange rates, adjusted for inflation to smooth out short-term fluctuations in currency markets. This is called the Atlas method.

The current, 2026 fiscal year, income classifications are as flows. Low income countries, such as Ethiopia, Uganda, Rwanda and DR Congo, are those with a GNI of $1,135 or less.

Lower-middle income countries such as Kenya, Ghana and Nigeria have $1,136 to $4,495. Kenya achieved this in 2013, forcing a re-stating of Vision 2030 to frame the aspiration as upper middle income by 2030. Upper-middle income category is GNI of $4,496 to $13,935. At our current trajectory, we shall join Mauritius, Botswana and South Africa in that category in five to six years.

High-income countries, such as Seychelles, have GNI of more than $13,935 per person per year. This is the inflation-adjusted value of the original 1987 benchmark. Costa Rica is the most recent (July 2025) entrant to this category.

The questions by the Laikipia educators, and policy wonks like me are which growth rates will get us there, and how long will it take?

The highest economic growth rates in Kenya were 22.2 percent in 1971, and 17.1 percent in 1972. This, on top of eight percent growth achieved in both 1968 and 1969. Since then, other high rates of growth were 8.4 percent in 2010, 7.59 percent in 2021, 6.3 percent in 2018, and 5.32 percent quarterly growth in Q4 of 2020.

1971 was a standout year during the “Kenyan economic miracle” (1964-1973), a period of rapid economic expansion that gave late president Kibaki, then finance and planning minister, fame as an astute economic manager.

The primary factor driving growth in 1971-2 was the coffee boom, where Kenya benefited from a massive spike in global prices, vastly increasing foreign exchange earnings.

Significantly however, the country had adopted an import-substitution industrialisation strategy, replacing foreign imports with domestic products. This led to a boom in the manufacturing sector, which grew at 8-9 percent annually for the period, including a spectacular 25 percent in 1971-3.

The strategy coupled well with regional trade expansion. The establishment of the East African Community (EAC) in 1967, provided Kenya with expanded export markets for the growing industrial base.

It is quite possible to transform to a first-world economy in our lifetimes, I assured the Laikipia educators. First, Kenya’s GNI per capita has grown from $414 in the year 2000 to $2,550 in 2025.

That is an increase of 6.16 times in 25 years. If we stay on that trajectory, we will reach high income status by 2050.

If we were to grow at the 1971 rate, we would transform to first-world in eight years! At the more modest annual growth rate of 12 percent, we will need about 15 years.

A few hurdles remain though. Will irrigation transform small-holder agriculture, increasing productivity? Will the KTDA model of solving the aggregation problem work for, and therefore transform, pastoralism?

Will physical infrastructure, ICT and mobile money, be enough to power the next Kenyan economic miracle? Above all, how will we overcome the negativity mindset deeply ingrained in current politics? On all four, superior county performance will help.

Four Kenya Tea Development Agency (KTDA) managed factories in the South Rift Region will be split into autonomous entities within the next six months, in a strategy aimed at improving efficiency.

The shareholders of Kapkoros Plc, a factory that has four factories under its wings – Kapkoros, Motigo, Olenguruone and Tirgaga – in Bomet and Nakuru counties, on Monday voted for the split.

This means that each of the factories will independently process and market its tea.

The shareholders also adopted a recently concluded boundary delineation exercise, which realigns the catchment areas of the factories.

Mr Robert Kipngeno Rono, the Kapkoros Plc chairman, said that the factories had already been given their independent codes by KTDA, and the resolutions passed by the shareholders will be forwarded to the Tea Board of Kenya (TBK) and other government agencies as required by law.

Mr Rono said the agitation by the farmers, which had lasted over three years, had been acceded to following the unanimous resolution, while the issues relating to inter-factory borrowing of loans were being dealt with.

KTDA has banned the inter-factory borrowing of money for construction, payment of bonus, repairs, and other key issues, with the factories pushed to take commercial loans from banks.

‘Issues relating to the separation of the factories, assets, and liabilities have been dealt with by a spe-cial committee that is in place. The issues have been dealt with,’ Mr Dickson Kirui, the Kapkoros Plc Secretary said.

Mr Kirui said: ‘Following the resolutions made by the shareholders, a Special General Meeting will be held by each of the factories in June 2026 to kick off the operationalisation and independence of the unit.’

‘After separation, the areas that will not have factory zonal directors will have elections declared to enable the shareholders to elect representatives,’ Mr Kirui said.

Bomet East Member of Parliament Richard Yegon said the separation would enable individual factories to operate without carrying the burden of the loss-making ones.

‘Motigo factory, for example, is known for high production of quality tea that is popular in the market. The management would easily pay farmers Sh 43 in bonus as opposed to the Sh 13 that was received recently,’ Mr Yegon said, triggering a protest among the directors.

Mr Yegon said: ‘The separation will enhance transparency and accountability in operations, marketing, and payment to the farmers by the individual factory units.’

The meeting attended by factory directors – Robert Kipngeno Rono, David Korir, Simon Mutai, Benard Koech, Kipkorir Chepkwony, Dickson Kipyegon Kirui, and Benard Rono – was a culmination of two years of a see-saw between the shareholders from the four factories centred on separation.

In an earlier resolution made on January 9, 2024, by the board of directors on behalf of the sharehold-ers, it was decided that ‘the four factories shall be completely separated and each factory will be granted full independence as a stand-alone entity.’

‘Assets and liabilities shall be allocated and settled to ensure that each factory is in a position to oper-ate as a fully-fledged independent entity, and so it can operate efficiently and sustainably,’ the resolu-tion, which was adopted on Monday, states.

Enhancing quality

Cabinet Secretary for Agriculture Mutahi Kagwe and Principal Secretary Paul Ronoh held a meeting with the zonal directors from the four factories on April 8, 2025, at Kilimo House in Nairobi, following a standoff on the push for the separation of the factories.

The CS said the government would assist the factories to modernise their equipment with a view to enhancing the quality production of tea before offloading it to the local markets and the Mombasa Tea Auction.

Mr Kagwe confirmed at the meeting that the government backed the shareholders’ resolution to have the factories operate independently from each other so as to enhance transparency.

The government is keen on having the players in the tea industry embrace value addition and branding before the tea is offloaded to the market, in what is expected to raise prices and create employment opportunities for Kenyans.

Separation of the factories comes in the backdrop of low prices per kilogram of green leaf supplied to the factories by the farmers and declining annual bonus paid by the agency.

Kenya enters 2026 with a cautiously optimistic economic outlook, but also with a sharper-than-ever need for resilience. The World Bank projects the economy to grow at an average of 4.9 percent through 2026-2027, buoyed by easing inflation and improved credit conditions.

However, businesses face persistent headwinds: macroeconomic uncertainty, climate unpredicatability, and political transitions are already reshaping the operating environment. For leaders, resilience is no longer a defensive measure. It’s a strategic lever for growth.

To stay resilient and risk-proof, Kenyan businesses must proactively strengthen their core foundations across six integrated pillars.

First, they should build financial buffers and strengthen capital structures. Despite the positive momentum, inflation remains sticky – hovering around 6.9 percent and external pressures such as geopolitical tensions and fluctuating commodity prices could tighten financial conditions.

Businesses face an increased call to prioritise liquidity by strengthening balance sheets, building financial reserves, and diversifying credit sources.

The recovery in credit growth forecast for 2026 presents an opportunity for firms to renegotiate facilities, restructure debt where necessary, and secure financing aligned with long-term growth priorities.

For MSMEs, disciplined cash-flow management and insurance protection against property, operational and political risks will be critical as the country heads toward the 2027 election cycle.

Secondly, there’s need to invest in digital transformation as a core resilience strategy especially as it hasmoved from operational convenience to organisational survival. Research shows that digital adoption – particularly e-commerce, data analytics and Fintech integration – strengthens market agility, stabilises revenues and enables businesses to scale beyond physical and geographic limitations.

In 2026, firms should prioritise systems that enhance business continuity: cloud migration, digital customer service platforms, automated operations, and data-driven decisioning.

Digital capabilities are especially vital for small businesses, who remain highly vulnerable to disruptions caused by power outages, supply chain delays and inflationary shocks.

Third, reinforcing supply chains and operational continuity is crucial as Kenyan businesses continue to face pressure from global supply chain instability, climate-related disruptions and shifting trade links. In this environment, operational continuity must be reframed as a strategic function, not a reactive one.

Leaders should diversify supplier bases, shorten supply chains where possible, and invest in predictive analytics that flag vulnerabilities early.

Business insurance remains a crucial tool for safeguarding assets and maintaining continuity during political or climate-driven disruptions.

As we approach a politically active period ahead of 2027, risk transfer mechanisms will be especially important.

Fourth, firms should integrate climate preparedness into corporate strategy. Climate events are a persistent top threat, affecting food systems, commodity prices, and household purchasing power, easily threatening to undo expected growth gains. Leaders must move decisively from simple climate awareness to comprehensive climate readiness.

This involves strengthening physical infrastructure, improving energy resilience, adopting sustainable resource use, and building robust climate risk models to inform long-term planning. For core sectors like agriculture, logistics, and manufacturing, proactive climate adaptation will form both a resilience measure and a significant competitive advantage.

Fifth, building strong people, culture, and leadership systems should be a priority for ultimately it defines success. Kenya’s competitive edge lies in its dynamic private sector and its young, innovative workforce. Leadership determines whether organisations harness or squander this potential.

Organisations must foster adaptive cultures built on clear communication, adaptability, and employee wellbeing to navigate volatility successfully.

Leaders must create environments where teams can respond quickly to market shifts, innovate under pressure, and maintain high performance without burnout.

As inflation cools and growth picks up, firms that prioritise talent development and organisational health will be best positioned to capture new opportunities.

Lastly, strengthening enterprise security and governance has never been more urgent. Consider this, businesses are responding to rising operational and political risks by expanding their security budgets.

Reports indicate 79 percent of Kenyan firms expect to increase spending, focusing on modern security technologies, risk assessment and regulatory compliance.

In 2026, the interplay between political realignment, economic transitions and evolving regulatory frameworks will demand stronger governance systems.

Firms should map investments in enterprise-wide risk assessments, scenario planning, cybersecurity infrastructure and compliance programmes that align with both local and international standards.

Finally, with competition rising across most sectors, businesses need to double their efforts in reaching and engaging customers. Meaningful engagements will triumph over transactional interactions in 2026.

Companies that understand their customers’ evolving needs will be better positioned to anticipate challenges and adapt quickly to solve them. Businesses that can personalise contact points, products and services will deepen customer loyalty while creating business models that are adaptive to change.