Category: Business Daily

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 modern retirement reality is self-sponsored. Gone are the days when one could comfortably depend on children or extended family to provide financial support in old age. For many, this marks a profound cultural shift.

In African societies, family has long been seen as the safety net. Children taking care of their parents was both expected and honourable. Yet as lifestyles evolve and economic pressures intensify, this tradition has become harder to sustain.

The same young people who were once viewed as retirement plans now carry their own financial burdens, from raising children to coping with the high cost of living. We are witnessing a generation caught between expectations and realities.

On one hand, there is still a strong belief that family will step in. On the other, there is growing awareness that retirement is increasingly an individual responsibility.

This new reality calls for planning, discipline, and foresight. The comforting illusion of automatic family support is giving way to the truth that financial independence in later years must be built with intention and consistency from a young age.

At the same time, people are living longer than ever before. Advances in medicine, improved access to healthcare, and better nutrition have extended life expectancy across Africa.

According to the United Nations Economic Commission for Africa, the average life expectancy on the continent has risen from about 43 years to 67 years and is projected to reach about 75 years by the middle of this century. This is a remarkable achievement, but it also means that retirement now stretches across decades.

The question, then, is how to sustain a dignified life throughout those years. It requires not only saving but also thinking creatively about how to maintain income after formal employment.

Many successful retirees today planned early and built diverse sources of financial security, blending savings, insurance, and investment to maintain a dignified lifestyle.

A dignified retirement is not achieved by chance; it is the result of deliberate and disciplined planning. It begins with a clear vision of the life one wishes to maintain, and a practical understanding of the financial resources required to sustain it.

Commit to consistent saving, however modest at the start, and take full advantage of structured pension plans and voluntary retirement schemes available in the market.

Retirement today reflects our changing times. It calls for awareness, resilience, and a deliberate shift from dependence to self-determination.

Invest with intention and seek professional guidance to ensure your investment strategy remains sound.

Most importantly, safeguard your health through adequate medical coverage, as this remains essential to protecting both your savings and your peace of mind in retirement.

A meaningful retirement also depends on more than finances. Prepare emotionally and socially for the transition. Cultivate interests and skills that can keep you engaged and fulfilled. Stay active, nurture friendships, and participate in community life. These choices strengthen both wellbeing and purpose.

In this new era, independence is empowerment. It means choosing not to burden loved ones but to prepare oneself with foresight and wisdom. It means breaking the cycle of black tax, where financial responsibility moves endlessly between generations, and instead building a legacy of preparedness.

The modern retiree takes ownership of their future, choosing to live freely, securely, and with dignity.

Over the past two years, Generative AI (GenAI) has captured global attention, including here in Kenya, thanks to its ability to draft content, summarise reports, and offer conversational assistance. These tools provide meaningful value, especially for teams looking to boost productivity and ease administrative workloads.

However, GenAI represents only one part of the broader AI ecosystem. For most Kenyan organisations, the real opportunity lies in understanding how generative and agentic technologies complement rather than replace one another, and how each can be applied at different stages of digital maturity.

The effectiveness of any AI system, whether generative or agentic, depends heavily on the quality of the data and workflows it operates on. This is where many Kenyan organisations face their greatest challenge.

Manual processes, inconsistent data entry, fragmented systems and limited integrations between various systems remain common issues across sectors. These realities make it difficult to leap directly into advanced AI use cases. Without clean, organised and accessible data, even the most sophisticated AI systems can produce inconsistent or misguided outputs.

For this reason, the most practical starting point for many Kenyan businesses is not the immediate adoption of advanced GenAI models but the digitisation and automation of core processes. Tasks such as routing customer-service tickets, reconciling mobile-money transactions, managing field-officer reports or processing sensor data may seem modest compared to futuristic AI visions.

Yet these workflow-driven improvements provide immediate, tangible value. They reduce errors, improve consistency and create a clearer picture of how information flows through an organisation. As these processes stabilise, they naturally highlight areas where AI can make a difference.

Once these foundations are in place, AI becomes especially powerful. While GenAI helps teams create and be more productive, agentic AI helps organisations act and be more efficient. It proposes actions, verifies them and then executes based on predefined business rules.

This distinction matters greatly in Banking, Financial Services, and Insurance sectors or public services in Kenya, where trust, compliance and accountability are central.

A loan approval system powered by agentic AI, for instance, might recommend an action but will only execute it after confirming that KYC rules have been met, thresholds respected and documentation verified. This combination of intelligence and verifiable guardrails enables fast and reliable decision-making.

As Kenyan enterprises grow more comfortable with AI-enabled systems, another important layer emerges: context. Global AI LLM models, despite their power, often struggle with the nuances of local regulations, business practices, cultural norms and sector-specific terminology.

This is where contextual AI and sovereign LLMs become essential. These are models fine-tuned with local data and designed to operate within specific regulatory frameworks, ensuring that the insights and actions they generate reflect the realities of the Kenyan market. Such models do not replace global systems; rather, they complement them by adding the local intelligence required for accuracy, relevance and regulatory alignment.

Beyond the technology itself, the rise of AI presents an exciting opportunity to strengthen transnational localism, the idea that global technology can fuel local innovation and economic empowerment.

No-code and low-code tools, embedded with AI capabilities-allow SMEs, NGOs and governments in regions like Kisumu, Eldoret or Turkana to build their own automations without needing specialised data-science expertise.

A micro-insurer can automate risk assessments based on local claims patterns; a county office can streamline citizen services; an agritech startup can create workflows around farmer support. The result is a decentralisation of digital innovation that allows solutions to emerge from the communities that understand their challenges best.

For leaders charting their AI journey, the path forward becomes clearer when viewed through this practical lens. The most sustainable strategy is to begin with workflow automation, build strong data foundations, introduce GenAI where it offers productivity improvements and gradually adopt agentic AI when the organisation is ready for secure and auditable automation. As maturity grows, contextual and sovereign AI models add the essential layer of local relevance.

Kenya’s AI future will not be defined by a race toward the most advanced model. Instead, it will be shaped by organisations that take a balanced approach.

Those that invest in good data, well-designed workflows, and systems designed to act responsibly will see the greatest returns, through improved customer experience, reduced operational costs, and empowered teams who spend less time on repetitive tasks and more time on meaningful work. Ultimately, the future belongs to businesses that embrace AI not as a flashy tool, but as a dependable partner in delivering lasting impact.

Across Nairobi, this cosier option has become one of December’s biggest retail drivers and few know this better than Caroline Murimi, the owner of Carole Home Solutions, an outlet that stocks everyday household staples.

‘I have been in business for seven years now, but I started stocking Christmas pyjamas and other festive items about four years ago,’ says the entrepreneur. ‘This decision was based on a gap I saw – there was demand for these items, but the supply was lacking.’

With the Christmas pyjamas being capital-intensive and the time frame of selling out your stock being very short, she understands why some people would shy away, but business has been on an upward streak ever since she took the risk.

‘People have embraced photo shoots and the idea of creating memories, and there is also the factor of seeing other families looking good in coordinated fits and wanting the same for themselves.’

This shift has made it so that the once niche curiosity is now an urban essential seeing buyers this year, making orders and purchases earlier than ever.

‘Kenyans used to be last-minute shoppers but it seems like they’re catching up with early planning,’ Ms Murimi notes. ‘A lot of people would usually come in December, but this year, for some reason, they started ordering as early as November 1st.’

The best sellers

Her best sellers are the red polycotton family sets, which she says are light enough to sleep in, but also durable enough to last all year.

For the children, her sets go for around Sh1,500 while the adult’s set averages at around Sh1,900. Sales, she reveals, are mostly driven by social media – Tik Tok and Instagram.

Still, the logistical headache is real.

‘We barely sleep in December. I get three to four hours a night just so I can ensure that I clear my entire stock,’ she admits.

‘But it’s also challenging when we clear our stock and the demand is still there. You can’t really predict the demand in a year, but it’s frustrating when some sizes sell out and customers are forced to compromise. It makes you wish that China was closer so you can just go and restock some more.’

Someone else with a front-row seat to the festive fad is Edwin Mokaya, co-founder of Keliam Kids Baby Shop. While the shop mainly sells baby furniture, children’s clothes, and maternity essentials, they also stock Christmas fits: pyjama sets, festive t-shirts, and thrift rompers, when the festivities come around.

This addition crept its way into their shelves slowly at first, then all at once after they noticed how long their customers took trying to choose lounge/night wear sets for each member of the family.

‘That’s when we realised there was a gap, both for matching family sets and for adult pyjamas because we were initially stocking for children only,’ says Mr Mokaya.

He says the festive trend is being pushed by young parents, especially those celebrating a baby’s first Christmas – a milestone that often comes with a themed photo shoot. If the baby has siblings, demand goes up. But it is not limited to families alone. He also attests to seeing groups of friends and chamas hopping onto the trend.

‘And social media, particularly TikTok, plays the biggest role in the momentum of this trend,’ the businessman mentions. ‘I think this is where the matching pyjama idea really grew because it allows families to share more real-life family moments.’

Naomi Makori, also a co-founder of the baby shop, adds that the willingness of Kenyans to splurge a little more toward the end of the year plays a big role in driving sales.

‘People spend without much thought in December,’ she observes. ‘If mummy wants coordinated fits for the entire family, that’s it, they are buying them.’

Their brand-new cotton two-piece sets range between Sh2,700 to Sh3,500, while their thrifted rompers, which fly off the shelves as soon as they land, start from as low as Sh450 all the way up to Sh1,200.

‘These rompers are unique, cosy, top-notch when it comes to quality, and very cost-effective,’ says Ms Makori. ‘It’s not a surprise that they sell out so fast.’

Something else that moves quickly are their Christmas-themed t-shirts which are priced from Sh300.

‘For these we only have smaller sizes for children aged 0 to 5 years, and they mostly sell towards the end of October when schools are about to close,’ Ms Makori says. ‘I think it’s because most schools have end-year school activities and they tend to go for anything Christmas-themed for those.’

Off-grid solar energy products startup Sun King has sold a $40 million (Sh5.1 billion) stake to the UK-based investment company Lightrock to raise capital for expansion across its African markets.

The equity financing round will fund Sun King’s scaling across the 46 countries it operates, including Kenya, Tanzania, Nigeria, and Malawi, to sell one million solar kits each month.

The end of the year invites a time of reflection as individuals and organisations take stock of the year and prepare to start the new year with renewed vigour and enthusiasm.

Amid various economic and social challenges, it’s inherent for human beings to pursue goals that give them personal satisfaction. Additionally, the passage of time brings with it life events through individual choices and decisions or the natural cycle of life taking shape.

One of the key aspects of personal goals is financial matters.

Chinese automotive manufacturer Dongfeng has partnered with ePureMotion to enter the Kenyan electric vehicle (EV) market, beginning with the introduction of two models of passenger electric cars.

The partnership marks Dongfeng’s first move into Kenya’s EV segment through locally supported retail and service operations.

The initial rollout includes the ePureCitie compact hatchback models in Classic and Lux trims. The Classic variant, priced at Sh4 million, offers an estimated driving range of 330 kilometres (km), while the Lux version, retailing at Sh4.5 million, delivers an extended range of about 430 km and includes advanced driver assistance systems.

The vehicles are currently imported as fully built and are positioned for urban commuting, corporate fleets, and ride-hailing applications.

ePureMotion has also confirmed a collaboration with Associated Vehicle Assemblers (AVA) to begin local assembly of selected Dongfeng electric vehicle models in Kenya to benefit from tax incentives.

Assemblers of electric vehicles are exempt from the 35 percent import duty levied on fully-built units shipped into the country. They also pay a lower excise duty of 10 percent.

The lower taxation helps assemblers to lower their costs and boost their competitiveness in Kenya’s new vehicle market.

According to the company, the move is intended to support Kenya’s industrialisation agenda by lowering vehicle costs, improving spare parts availability, and enabling quicker response to market demand as volumes increase.

‘ePureMotion confirms collaboration with AVA (Associated Vehicle Assemblers) to begin local assembly of Dongfeng EVs in Kenya, supporting Kenya’s industrialisation agenda,’ Mr Gilbert Saggia, ePure Motion’s founder and chief executive officer told the Business Daily.

‘So the manufacturer of the actual vehicle is Dongfeng. We’ll assemble it next year.”

Dongfeng plans to introduce additional electric passenger vehicles and light commercial EVs into the Kenyan market in the first quarter of 2026. These models will target private buyers, corporate fleets, logistics operators, and public-sector users.

‘More Dongfeng models next quarter, national charging expansion, and increased local assembly with AVA,’ said Mr Saggia when asked about future plans.

Dongfeng already has an established presence in Kenya through its commercial vehicle operations, with DFAC Kenya Ltd serving as the authorised distributor and assembler of Dongfeng trucks in the country.

The partnership between Dongfeng and ePureMotion also brings an integrated electric vehicle showroom and charging technology centre, bringing together EV sales, charging solutions, after-sales support, and accessories.

Dongfeng joins the few companies that are locally assembling electric cars, as much of the output has so far been in two-wheelers and buses.

According to the Energy and Petroleum Regulatory Authority, electric vehicles in the country have been on an upward trajectory with 6,442 registered electric vehicles (EVs) as of June 2025 attributed to growth in charging points.

The Kenyan startup has set up charging stations in a few malls across Nairobi, expanding access and convenience for EV users.

The Chinese road firms lined up to build and operate the Rironi-Mau Summit toll road will share excess revenues with the government, a move aimed at limiting the private operators’ potential for excessive profits during the concession period.

The Public-Private Partnerships (PPP) Directorate has disclosed that the State will enter into a revenue cap agreement with the two firms awarded the contract, requiring them to share with the government any revenues generated beyond an agreed threshold.

The arrangement will allow part of the toll proceeds to be reinvested in the maintenance and upgrading of the 236-kilometre highway, while also enabling the State to earn from the project’s proceeds during the concession period.

‘There will be no minimum revenue guarantee, but we will agree that once the revenues surpass a particular point, they will be shared with the government,’ Kefa Seda, Director-General at PPP Directorate, told the Business Daily.

A minimum revenue guarantee (MRG) would have required the government to compensate the operators if toll collections fall below an agreed level, effectively insulating the project from demand risk.

The revenue cap model, by contrast, allows the State to benefit only from excess collections beyond the agreed threshold, without bearing the risk of underperformance.

Mr Seda did not disclose the revenue threshold that would trigger the sharing arrangement, saying negotiations with the contractors are ongoing and a final agreement has yet to be signed.

The approach marks a departure from the demand-risk model used for the Nairobi Expressway, where the Chinese operator absorbs losses if traffic volumes fall short of projections, but retains all excess revenue when usage exceeds expectations.

Nairobi Expressway has not earned a profit since its launch, with operational costs exceeding toll revenues. However, this will not affect the pre-agreed 27-30 year concession period, as per the demand-risk model.

Motorists, for instance, paid Sh7.16 billion in toll fees in the six months to December 2024, falling short of the Sh9 billion required to cover loan repayments, operations and maintenance, according to the Treasury.

Over those six months, about 12.5 million vehicles passed through the Nairobi Expressway.

Its net loss widened to Sh1.84 billion in the six months to December compared to a Sh1.2 billion loss in the year to June last year.

The government, last month, made a last-minute decision to split the contract for the Nairobi-Nakuru-Mau Summit toll road to avoid scrutiny and lengthy approval from the Chinese government.

In a U-turn, the Kenya National Highways Authority (KeNHA) reinstated the runner-up from the original bids and gave it a section of the 236-kilometre road network, while the initial contract winner will handle the remaining portion.

This follows revelations that the winning bidder-China Road and Bridge Corporation (CRBC)-would require a lengthy internal review from Beijing, which demands its approval for overseas projects exceeding $1 billion (Sh129 billion) that are handled by state-owned Chinese companies.

The National Treasury has ruled out any possibility of layoffs in the public service, walking back on a promise made during the wage bill conference last year as the State sought to address the wage bill crisis.

While the government had last year promised a ‘serious, radical and surgical’ reform that would cut Kenya’s public service to size, the Treasury now says the decision seems unlikely.

The U-turn comes at a time when Kenya’s public service workforce hit 1.05 million in June, gobbling up Sh1.25 trillion in salaries and allowances for the 2024/25 fiscal year, just about half of the Sh2.57 trillion taxes collected during the year.

But the Treasury now says that rather than fire employees, the government is rolling out a new human resource management information system that is expected to weed out ghost workers and seal other leakages in the public wage bill system, with all national government entities planned to onboard before the end of this month.

‘With the new human resource management information system that we are putting in place, we are going to manage the wage bill at least at the rate at which it is today because I don’t see the government having a strategy of or bringing retrenchment as a strategy,’ Treasury Cabinet Secretary (CS) John Mbadi said in an interview.

He added that the government walked back on the earlier promise ‘because already we are having so many unemployed Kenyans.’

The government is integrating current fragmented payrolls across different national government entities and in the counties into one system, aiming to flush out malpractices such as the existence of ghost workers.

By eliminating ghost workers, the Treasury says, the government saves billions of shillings that have long been wasted on unproductive expenditures.

‘Just by the Ministry of Education using a system to check on capitation, it has led to reports that I’ve got Sh4 billion savings on capitalisation. This is an example of the savings we are looking at,’ the CS said.

During the national wage bill conference held in April last year, however, the government had indicated that it would target thousands of support staff, casual workers and persons with fake academic certificates in a mass layoff planned to clean up the public service and lower the wage bill.

The government said this while revealing that support staff constituted two-thirds of public service workers, yet the requirement is a composition of 70 percent technical staff and 30 percent support staff.

This means that of the 1.05 million public service workers, support staff are estimated at around 702,950, more than double their required number.

‘The composition of the establishment itself is problematic in that it is seriously skewed towards support staff at the expense of technical and other core-function staff. Clearly, 83 percent of state departments have violated the recommended ratio of technical staff to support services,’ President William Ruto said.

The President spoke after his Public service CS at the time, Moses Kuria, warned that the ministry was partnering with the Head of Public Service to undertake a major shakeup in the public service that would end up in ‘cutting this public service.’

The Treasury, however, admitted that it has faced resistance within government even in its efforts to roll out the new human resource system from parties who have been against the transition.

It said the plan is to integrate all national government entities into the new system by December 31, 2025, and that all the counties would be on board by the end of June 2026.

‘We can make our public sector more efficient and manage our payroll so that we eliminate ghost workers in our payroll and that is why we are integrating the payroll now, with the resistance of course from some quarters but they are not going to succeed,’ CS Mbadi said.

The government has failed to remit deductions of Sh1.2 billion to the civil servants’ pension scheme, risking a loss of returns to workers in Kenya’s troubled retirement benefits system.

According to the Office of the Auditor General, the Public Service Superannuation Fund (PSSF) had a balance of Sh10.6 billion at the end of June 2025 relating to unremitted employer and employee contributions due to the fund.

The State had paid up arrears of Sh9.38 billion at the end of August, leaving a balance of Sh1.2 billion which remained during the audit of PSSF books.

Delays in remitting the deductions means the funds have less time to earn returns for retirees, hurting their benefits.

Read: State fails to remit Sh220m pension for new employees

The unremitted pension contributions add to the concerns on Kenya’s weakening pension ecosystem including the erosion of public confidence in the safety of retirement contributions.

‘This is contrary to Section 8(c) of the Public Service Superannuation Scheme Act, 2012 which states that, not later than ten working days after the end of the month in which the contributions are due, the government shall remit an amount comprising the member’s and the government’s contribution to the custodian,’ the Auditor General said.

‘Unless the outstanding balance is paid together with the penalty provided for, contributors stand to lose returns that would have been earned had the contributions been received in time.’

The government has persistently delayed remittances of pension contributions to the civil servants’ scheme and has previously carried arrears to the fund.

In the financial year ending in June 2023, the government failed to remit Sh219.9 million to PSSF, revealing risks for the defined contribution pension scheme established in 2021 to cover workers including teachers, police and employees of the National Youth Service (NYS).

In the year to June 2024, the government failed to remit deductions totalling Sh3.2 billion but settled the arrears in September of the same year.

Players in the pensions industry have raised alarm against the non-remittance of deductions highlighting the impact to not just savers but also the execution of State projects.

‘Pension funds are the backbone of Kenya’s long-term investment base. They buy government bonds, finance infrastructure projects, and provide liquidity to real estate and equity markets. When contributions fail to arrive, funds lose investable cash. Some are forced to liquidate assets prematurely or slow down new investments,’ Enwealth Financial Services Limited Managing Director Simon Wafubwa said.

‘The silent capital drain ripples through the economy: fewer pension inflows mean lower domestic savings and greater dependence on short-term borrowing.’

The widespread non-remittance of pension deduction has seen the industry regulator-the Retirement Benefits Authority (RBA) push for changes to rein in the chief executive officers (CEOs) and accounting officers of State agencies who collect but fail to remit statutory deductions.

The regulator plans to enlist the help of the Kenya Revenue Authority (KRA) in its quest to collect total unremitted pension deductions which reached Sh72 billion as of June 2025.

RBA has attributed the surge in unremitted pension contributions to ‘indiscipline’ in the public sector, where funds allocated for salaries and wages are reallocated for other purposes.

‘We are in the process of amending the law so that all employers, whatsoever, including CEOs, who do not remit those contributions will be held accountable and to be punished from day one. We have also amended the law to empower KRA to collect any unremitted contributions with the necessary penalties on behalf of RBA and that has happened,’ RBA Chief Executive Officer Charles Machira said in a previous interview.

The pension industry’s assets under management grew by 12.2 percent in six months to June 2025, reaching Sh2.53 trillion from Sh2.2 trillion in December 2024.

PSSF’s fund value rose from Sh142 billion in June 2024 to Sh242 billion in June 2025 supported by fresh contributions estimated at Sh4.5 billion each month and higher investment income.