Category: Business Daily

Sovereign wealth funds (SWFs) and official foreign exchange reserves are the two principal pools of public financial assets that governments hold and manage.

They are often discussed as separate worlds: reserves belong to the central bank and serve monetary and external stability, while SWFs mostly operate from ministries of finance and pursue long-term and strategic returns and development objectives.

In practice, both SWFs and Reserves are closely linked. Many SWFs were born from Reserves, several share assets, managers and governance structures with central banks, and both draw on the same national balance sheet. Understanding this nexus helps policymakers decide how much to hold, where, and who should manage it.

Official reserves are external assets controlled by the monetary authority to meet balance of payments needs, intervene in currency markets and sustain confidence. The IMF’s Balance of Payments Manual (BPM6) and its Guidelines for Foreign Exchange Reserve Management set the order of priorities: safety first, liquidity second, return third.

SWFs, by contrast, are government-owned investment vehicles established for stabilization, strategic development and intergenerational savings. Their longer horizon allows listed, private-market and infrastructure assets unsuited to Reserve Funds.

The most direct link is genealogical. When Reserves accumulate well beyond precautionary needs, the opportunity cost of holding low-yielding liquid assets rises, and transferring the surplus to an SWF is a natural response. Singapore’s GIC (1981), the Korea Investment Corporation (2005) and the China Investment Corporation (2007) were all capitalized, directly or indirectly, from excess Reserves.

This depends on a credible measure of reserve adequacy: the IMF’s Assessing Reserve Adequacy (ARA) metric, Import-Cover and the Greenspan-Guidotti rule set the precautionary floor, and only resources above it should go to a sovereign wealth fund.

Modern reserve management also segments reserves into a liquidity tranche, an investment tranche and sometimes a long-term tranche that begins to resemble an SWF. Reserve Funds and SWFs thus sit on one continuum, ordered by liquidity needs and risk tolerance.

Norway’s Government Pension Fund Global is managed by Norges Bank Investment Management, an arm of the Central Bank, while remaining legally separate from the country’s Reserves Fund; Botswana’s Pula Fund, managed by the Bank of Botswana, is partly counted within official reserves.

The relationship is symbiotic. Adequate reserves let an SWF invest for the long term because the central bank stands ready to meet liquidity shocks, the Fund can ride out volatility, hold illiquid assets and avoid forced sales.

In turn, a well-run SWF relieves pressure on Reserves by absorbing surplus foreign exchange, stabilizing fiscal spending when commodity prices fall and, in a severe crisis, acting as a second line of defense. Together they present a stronger sovereign balance sheet than either could alone.

Africa offers some of the clearest illustrations, because several newer SWFs have been housed within, or seeded by, Central Banks. Namibia’s Welwitschia Fund, launched in 2022, has the Bank of Namibia as custodian and manager. Its seed capital of about $17.2 million combined government funds with central bank dividends boosted by reserve gains.

A liquid stabilization account cushions shocks and protects reserves, alongside a long-term intergenerational savings account. By 2026 the fund exceeded $30.8 million, an annualised return of about 15.5 percent. Reserve earnings helped create the Fund, the Fund now shields the Reserves.

Mauritius offers a more assertive, and more debated, model. In June 2020, at the height of Covid-19, the Bank of Mauritius established the Mauritius Investment Corporation (MIC) as a wholly owned subsidiary, capitalised with about $2 billion from its foreign exchange reserves, to support systemically important firms and build long-term national wealth.

Despite initial apprehension, Mauritius has retained reserves cover of more than twelve months of imports, showing how strong buffers can be partly converted into a Sovereign Investor.

Uganda illustrates the nexus at an earlier stage as it prepares for first oil. Under the Public Finance Management Act 2015, petroleum revenues flow into the Petroleum Fund held at the Bank of Uganda. Amounts beyond budget-support prescribed-limit, then flow into the Petroleum Revenue Investment Reserve (PRIR), which the Central Bank manages as the country’s future-generations fund.

Together these cases reveal a distinctly African pattern. Central Banks are often the most capable and trusted public institutions for managing foreign assets, so housing a new SWF there accelerates set-up, lowers costs and lends immediate credibility. But the arrangement needs safeguards.

The boundary between monetary policy, fiscal policy and public investment can blur: losses may erode a central bank’s capital, political pressure may push the fund toward quasi-fiscal lending, and discretionary withdrawals can undermine both a sovereign wealth fund and reserves.

Policymakers should therefore enshrine purpose and withdrawal rules in law, separate accounts and investment committees, publish audited reports and align with the Santiago Principles and IMF guidelines, respectively.

Because both instruments affect the same external position, they must be coordinated. Transfers to an SWF reduce central bank buffers, while large SWF inflows or repatriations can move the exchange rate and complicate monetary policy. Clear Treasury-central bank rules on deposits, withdrawals and currency conversion are essential.

Governance is converging too: Central Banks rely on independence and conservative mandates, while SWFs follow the Santiago Principles’ call for a clear legal basis, defined purpose, operational independence and transparency.

For many African countries the question is less about deploying excess reserves than about building buffers while financing development.

This argues for sequencing: first secure adequate reserves, then establish stabilisation and savings funds with transparent fiscal rules, and only then expand into strategic mandates. Botswana, Ghana, Nigeria, Angola, Rwanda, Namibia and, prospectively, Kenya and Uganda illustrate different points on this journey, with regional development finance institutions at hand to continuously help build capacity along the way.

In conclusion, sovereign wealth funds and reserve funds should best be understood as complementary layers of a single sovereign asset-liability framework, not rival institutions. Reserves are the first line of defense and anchor confidence; SWFs extend the horizon, seeking returns and preserving wealth for future generations.

The nexus rests on three elements: a rigorous measure of reserve adequacy, coordinated fiscal and monetary policy, and sound governance consistent with IMF guidelines and the Santiago Principles. Getting this balance right lets Governments protect stability today while building prosperity for tomorrow.

Foreign investors shed 23.6 million KCB Group shares valued at Sh2.1 billion at the current market price in the three months to September as local investors increased their holdings in the lender over the same period.

Latest shareholder profile shows foreign holdings fell from 281.66 million shares in June to 258.04 million in September, reducing their ownership in the Nairobi Securities Exchange-listed lender to 8.02 percent from about 8.8 percent.

At KCB’s opening share price of Sh90.25 on Wednesday, the selling in the three months to September translates to about Sh2.13 billion, deepening the bank’s ownership towards home investors.

The reduction in the stake held by offshore investors came after a period of high capital gains on the KCB share, which has been among the best performing at the NSE with a 30.32 percent gain over the past six months.

Between the starting of June and end of September, KCB share traded between Sh67.50 and a record Sh99.25, offering investors a profitable exit.

Foreigners had raised their stake in KCB to above 10 percent, closing March 2025 at 10.21 percent before the new wave of selling set in.

The latest foreign sell-off mirrors the trend in 2023, when overseas investors’ stake in the bank fell to about 8.66 percent in September of the same year from a peak of 29.25 percent at the end of December 2017.

Over the three-months to September this year, local institutional investors increased their holdings by 19.2 million shares to 1.52 billion while individual investors added 4.43 million shares to take their stake to 799.26 million.

The latest quarterly shift was, therefore, driven mainly by institutional investors, whose additional holdings raised their stake to 47.33 percent in September from 46.73 percent in June. The stake of local individuals rose to 24.87 percent from 24.73 percent.

The combined increase of 23.62 million shares among local investors matched the decline in foreign holdings, being the largest selling by foreign investors in a single quarter over the past 19 months to September 2026.

Foreigners had sold 29.26 million shares in the quarter ended June 2025, followed by a further 23.14 million selling in the quarter ended September last year. They then bucked the trend in the fourth quarter of last year by buying additional 13.27 million shares.

However, they have been net-sellers this year, cutting 3.64 million shares in the quarter ended March 2026, followed by 3.84 million selling in the quarter to June and a further 23.62 million in the three months to September.

In August this year, KCB Group announced that it has increased its interim dividend by 50 percent to Sh3 per share after reporting a 14.2 percent growth in net profit to Sh36 billion in the half-year ended June 2026.

The bank closed its books for the dividend on September 2 and made the distribution on November 10.

Effective May 1, 2024, Morgan Stanley Capital International (MSCI), an international firm that provides investment data and analytics services to investors, promoted KCB Group to the MSCI frontier markets index, increasing the stock’s visibility to global investors.

KCB was elevated from the small cap index, joining the likes of Safaricom, Equity Group and East African Breweries in the constituents of frontier markets index that captures large and mid-cap stocks across 28 frontier markets.

The value of fish produced in Kenya jumped 38.53 percent to Sh54.86 billion in 2025, rising from Sh39.62 billion the previous year, lifted by higher production.

Fresh data by the State Department for the Blue Economy and Fisheries showed the country produced 189,150 tonnes of fish in 2025, marking a 12.3 percent increase compared to the 168,424 tonnes realised the previous year.

‘The subsector has growing demand for fish and fish products that is projected to reach 450,000 tonnes by 2030, and there is a deliberate shift towards structured aquaculture (fish farming) and coastal/marine production in order to bridge the gap to meet the demand,’ the Department said.

Freshwater fish production rose from 86,527 tonnes in 2024 to 125,374 tonnes in 2025, with its value rising from Sh14.5 billion to Sh28.6 billion. Marine production increased from 48,608 tonnes in 2024 to 63,776 tonnes in 2025, with a value of Sh15.2 billion and Sh26.2 billion in 2024 and 2025, respectively.

Aquaculture fish production increased by 2.9 percent to 34,260 tonnes in 2025 from 33,289 tonnes in 2024, with a value of Sh9.9 billion in 2024 and Sh11 billion in 2025.

‘Fish production from fish farming (pond) declined by 20.7 percent to 6.1 million tonnes, while cage farming increased by 10.1 per cent to 28.1million tonnes in 2025,’ the Department said.

Freshwater fisheries contributed 66 percent of Kenya’s total fish production in 2025, with the principal catches coming from Lake Victoria. This was a significant jump from 52 percent in 2024.

‘The subsector supported the livelihood of over four million people directly and indirectly working as fishers, traders, processors, suppliers and merchants of fishing accessories, employees and their dependents. Besides being a rich source of protein, especially for riparian communities, the sub-sector is also essential for preserving culture, national heritage and recreational purposes,’ the department said.

The 2025 earnings and production performance marks successive growth for the industry amid interest from new investors, especially in cage farming.

Cage fish farming has gained traction in Lake Victoria, with more than 4,000 cages in place and concentrated on the Kenyan side of the water mass. Many of the cages are individually owned, even though more corporations, such as Victory Farms, are eyeing aquaculture opportunities in the lake.

Cage farming involves setting up a netted enclosure that is suspended in the lake with fish fingerlings enclosed in it. The fish are fed and tended to in the enclosure. The harvesting cycle for caged fish is about one year per cage.

An increase in fish production from marine fisheries and cage culture in Kenya has reduced the country’s dependence on foreign suppliers and stabilised the domestic market. Still, Kenya produces less than the national demand of 510,000 tonnes of fish.

A former Trans Nzoia County accountant has been ordered to forfeit assets and money worth Sh207.7 million to the government after the High Court found that he had failed to satisfactorily explain their source.

Anti-corruption court Judge Rose Ougo ordered Andrew Biketi Musuya to surrender properties in Mombasa and Bungoma valued at Sh150.2 million, bank and M-Pesa funds amounting to Sh53.5 million, and two motor vehicles worth Sh4 million.

The properties include two five-storey apartment blocks and a five-bedroom townhouse in Mtwapa, Mombasa County, as well as seven undeveloped parcels of land in Mombasa and Bungoma.

The ruling followed a petition by the Ethics and Anti-Corruption Commission (EACC) seeking to recover assets deemed disproportionate to Mr Musuya’s known legitimate income.

‘Having considered the evidence in its entirety, this court finds that the applicant discharged the initial evidential burden imposed by Section 55(4) of ACECA [the Anti-Corruption and Economic Crimes Act] by demonstrating assets and financial resources that, having regard to the respondent’s known legitimate sources of income, were disproportionate and required an explanation,’ Justice Ougo said.

The judge acknowledged that Mr Musuya earned a salary and had legitimate income from part-time teaching, business, farming, maize trading, consultancy work, loans and rental income. However, she found that he had not demonstrated how these sources could account for the extent of his wealth.

EACC investigations covered the period between January 1, 2013, and October 31, 2018.

The commission established that Mr Musuya had accumulated assets and funds worth Sh289.9 million, comprising bank and M-Pesa transactions totalling Sh53.5 million, land and buildings valued at Sh226.8 million, and motor vehicles worth Sh9.6 million.

The commission initially sought to recover Sh284.1 million, which it considered unexplained wealth.

The judge rejected his reliance on business revenue as sufficient proof of the source of the assets, noting that gross sales did not necessarily represent profits available for investment.

‘The figures represented gross sales rather than net income available to the respondent for investment,’ she said, adding that a business incurs expenses such as stock purchases, salaries, taxes, licences and rent.

Mr Musuya, who operated Kapenguria Municipal Club, commonly known as Mtello, presented sales records showing business activity in 2009 and 2010. He claimed the club generated approximately Sh23.9 million before closing in July 2010.

However, the court found that he had not adequately demonstrated the expenses incurred, the resulting profits, his share of those profits or a credible financial trail linking the proceeds to the disputed properties and bank deposits.

The judge said legitimate employment income could not, by itself, explain wealth substantially exceeding the demonstrated capacity of those earnings.

The investigations were triggered by a report that Mr Musuya had accumulated wealth disproportionate to his income while serving as an accountant officer I in the Ministry of Public Health and Sanitation and later as a principal accountant in the county government.

The commission examined Mr Musuya’s bank and M-Pesa records, employment earnings, property holdings and business activities after obtaining investigative warrants.

The EACC identified bank deposits of Sh45.5 million, excluding salary, and M-Pesa receipts of Sh8 million. It put his known legitimate income at Sh5.8 million.

The bank funds included Sh16.1 million in an Equity Bank account held by Mr Musuya, Sh8.6 million in an Equity account held by Mukuyu Petroleum Dealers, Sh11.8 million in a Co-operative Bank account in his name and Sh9.1 million in another Co-operative Bank account held by the business.

Mr Musuya opposed the forfeiture proceedings, denying that he acquired the assets through corruption, embezzlement of public funds or money laundering. In affidavits filed in response, he said his wealth had been accumulated lawfully over several years and accused the commission of selectively considering his financial records.

He argued that the investigation period was too narrow because some of his businesses and savings predated 2013.

He said he joined the Ministry of Public Health and Sanitation in October 2010 and later became a principal accountant in Trans Nzoia County, effective October 1, 2014. He attributed Sh6.5 million of his wealth to employment income earned between 2010 and 2018.

He also said he had engaged in maize farming since 2006, leasing 50 acres in Kiminini. He attributed Sh34.5 million to farming proceeds, saying he financed the venture through salary, gratuity, allowances, family assistance and proceeds from livestock sales.

He presented lease agreements, storage arrangements and maize purchase and sale receipts to support his claims, maintaining that proceeds from farming and trading were reinvested in the businesses.

On consultancy work, Mr Musuya acknowledged that Josim received Sh52 million from the county government for services that included auditing, verifying and valuing the assets and liabilities of defunct local authorities. However, he denied receiving any part of the payment.

He also acknowledged serving on the County Procurement Committee during the 2014/2015 financial year but argued that its mandate covered procurements valued at Sh500,000 or less, below the value of the contracts cited by the commission.

The court nevertheless found that the explanations, considered cumulatively, did not adequately account for the disputed assets and financial transactions.

‘The respondent was required to go further and demonstrate the expenses incurred in generating the stated sales, the resulting net profit, the portion of that profit attributable to him, and the manner in which such net proceeds were preserved or applied,’ the judge said.

The news of Microsoft’s reported restructuring of its engineering operation in Nairobi has largely been framed as a blow to local employment.

While the immediate impact on livelihoods is undeniably significant, this moment signals a much deeper, structural turning point for the continent’s digital economy.

As artificial intelligence (AI) fundamentally reshapes how technology is designed, built, and deployed globally, Africa faces a profound strategic crossroads: will we merely become highly efficient consumers of AI, or will we establish ourselves as creators and builders of it?

For years, the continent’s tech strategy has focused on a straightforward metric: training more software engineers. However, AI tools are rapidly shifting the talent equation by automating routine coding, testing, and debugging.

Today, smaller teams can achieve what once required massive engineering organisations. The premium has moved from basic code execution to high-level systems architecture, data engineering, cybersecurity, and product judgment.

This is exactly why the departure of hundreds of experienced engineers from a global tech giant matters so intensely. They represent a concentrated pool of deep technical capability-professionals who understand how to ship complex technology at scale.

In the emerging AI era, this accumulated capability is an invaluable asset that Africa cannot afford to squander. Currently, the regional conversation centres heavily on AI adoption-how local banks, retailers, and governments can use foreign platforms to automate workflows and optimise customer service.

While adoption drives internal productivity, it does not guarantee local value capture. Africa risks becoming hyper-productive using software built elsewhere, sending the bulk of the economic rewards, intellectual property, and licensing fees right back out of the continent.

True digital transformation requires shifting our collective ambition from consumption to production. To turn this immediate labour-market shock into a long-term technology formation event, the broader ecosystem must pivot.

Instead of wondering where these engineers will find their next corporate roles, we must ask how to empower them to build from Africa for the world. Some will launch startups; others will step into leadership roles within local fintech, healthtech, and agritech ventures.

But this transition will not happen automatically. It requires deliberate support: local capital willing to back technical founders, domestic firms willing to become first customers, and agile policy frameworks that protect local intellectual property.

AI lowers the barrier to entry, enabling lean African teams to build globally competitive products with a fraction of traditional capital.

Africa’s long-term success will not be measured by how many AI tools we subscribe to, but by the intellectual property we own.

The story of these engineers should not end with their exit interviews. It must mark the beginning of a new era of African-built technology.

Timothy Laku is an AI Transformation Partner, global speaker, and author of Scaling Impact. Based in Nairobi, he advises boards and executives across Africa on turning artificial intelligence into measurable business value. Read more at timothylaku.com.

When Al-anwar Hassanali, an entrepreneur in Kenya’s watch industry, told his father he wanted to drop out of university to pursue business, his father gave him one ultimatum.

Hassanali says he was worried that his father was spending so much on his school fees yet getting so little in return.

‘I realised my father had taught me more about business at his shop than what I was learning in university,’ he says.

When he was due to start his third year, he never returned to school.

Throughout his childhood, Hassanali had accompanied his father to his shop along Nairobi’s Kenyatta Avenue, spending weekends and school holidays there. The visits began when he was just three years old and continued until he joined university.

Hassanali watched his father run the family business, learning firsthand how to attract customers, price products, manage inventory and close sales. These were practical lessons, he says, that no business class could have taught him.

His father, however, was unsettled with his decision to drop out of university.

‘My father wanted to get a degree of his own and become an accountant. But he had to drop out of school and take over the family business after his dad passed away. When I told him I wanted to leave university, he told me, ‘I am giving you a semester break, and if you prove to me, you can make money, then you have my blessings,’ says Hassanali, who was pursuing a Bachelor’s degree in Business Administration.

He tried his hand at several businesses, from running an inspiration blog and dabbling in wedding photography to owning a tour company.

His first entrepreneurial lesson was how fast they failed. Not giving up, he saw an opportunity in the watch business, drawing on a childhood fascination with timepieces and seeing his father sell.

‘I was about five years old when I was given a watch as a birthday gift which had ‘Woof’ written in 3D on the rubber belt, along with cute little cartoon dogs. It was so expensive that I used to wear it only on Sundays. On other days, I kept it in the drawer,’ he says.

Hassanali’s entry into the watch industry began with a bet on Citron watches, which a friend of his father had supplied for sale in the family’s shop. He saw an opportunity to take the business online.

He sold 12 watches in just six hours, but the initial success proved short-lived. Half were returned by customers, forcing him to refund the money he had been so delighted to earn. It was his second lesson in entrepreneurship: making a sale is one thing; keeping the customer satisfied is another.

He later acquired several Chinese watch brands but achieved limited success in growing them into thriving businesses.

‘After three months, I had made only Sh8,000. My dad told me to go back to university because I was not making any headway in being an entrepreneur. I prayed so hard for Allah to guide me as I did not want to go back to school,’ Hassanali says.

Not one to give up easily, he embarked on research and stumbled upon Leather Belt Casio Edifice, a brand which came to define his business for years.

Leveraging online marketing, Hassanali settled on selling watches online, setting up Saa Zone – a low-budget watch shop. Apart from Casio watches, he also sold Omax watches through Facebook ads, and good orders started coming.

‘I had a page on Facebook and would sell a watch a month, mostly to friends. Money started coming, and this convinced my dad to let me pursue my dream. This was in 2012.’

He soon learnt his third lesson in entrepreneurship: although the watches sold quickly because of their low prices, their poor durability proved a liability. Customers complained that the watches broke easily, undermining confidence in his business.

Going into debt

He decided to concentrate on selling Casio watches, which, although they cost about 10 times more than Chinese brands, were durable. The watches were genuine, but the cost of importing the stock soon pushed him into debt.

‘We even went into debt because the thing with genuine watches is that when a customer buys one, they won’t return for at least five years, so you don’t have recurring clients,’ he says.

Hassanali gives an example of Orient’s Bambino series, known for its domed crystal and longevity. Its durability comes at a cost.

‘Automatic watches are a very old technology that uses a pallet fork to control the movement. They can last forever. If it gets spoiled, it is easy to repair. They can easily be passed on from one generation to another.’

But this did not deter him from the watch business. Before long, more customers began coming, drawn by their reputation for durability.

Five years into the business, Hassanali realised he had found something worth pursuing seriously.

He opened a physical shop in Nairobi’s Central Business District, running the business as a one-man operation. ‘I was the one doing marketing, packaging, deliveries and everything. Now I have six employees,’ he says.

As the business grew, he started scouting for bigger space with good foot traffic.

His fourth lesson in entrepreneurship: you cannot simply walk to a property management company and say you want to set up a competing watch business in a mall. There is only so much room for watch retailers in one shopping mall, and success depends on standing out.

‘Getting a location was difficult. Popular malls already had other watch shops; even though they were not selling the same brands as ours, they did not give us space,’ he says.

‘They asked if we had shops in other malls, our bank balance, ability to sustain the shop in terms of rent and lots of other things. Even though we were big online, the metrics did not matter to them,’ he says.

It took nine months for Hassanali to secure a space at Our Mall, on Magadi Road, where he now has a shop.

Luck strikes

Luck struck, and Titan, an Indian watchmaker, approached Hassanali and appointed Saa Zone as its sole authorised distributor in Kenya. He added the brand to his Casio and Orient brands.

Titan was looking to expand into Africa, and Hassanali’s biggest headache and fifth entrepreneur lesson was selling a brand that was relatively unknown. Until recently, Titan had been solely focusing on the Indian market where they make about 20 million watches annually and are the fifth-biggest watchmaker in India.

Hassanali says Titan has about 3,000 outlets in India but is now beginning to venture into the international market.

‘We had always been known for Casio, but when Titan came along, it even inspired the opening of a physical shop,’ he says of the shop that cost about Sh2.5 million to set up.

He explains that before Saa Zone committed to working with Titan, they tested their products for one year, gauging their durability and design.

‘Once the durability test met our standards, we came into an agreement, and currently we are now their authorised dealer in Kenya,’ says Hassanali.

‘It was a big gamble’

‘We buy from Titan and sell at a price where we can make a profit,’ he says, adding, ‘it was a big gamble that we had no idea whether it would work because we have been an online shop for years. We had that difficult period in the beginning, but the business has started generating profit.’

The lesson he is currently learning to navigate is how to sell to a customer base that often lacks the expertise to distinguish genuine watches from counterfeits, particularly in the entry-level premium segment, where fake watches are prevalent.

He further notes that watch dealing is not a necessity-driven business that guarantees daily customers or consistent revenue. As a result, the business does not always yield immediate returns, requiring him to carefully balance his finances and manage cash flow during slower periods.

‘No one is buying watches every day, and so there are periods when I had to do some side businesses during the starting phase to make ends meet,’ he says.

He argues that the high cost of genuine timepieces, coupled with their relatively slow turnover, explains why few watch shops in Kenya deal exclusively in authentic watches.

‘There are only six authorised dealers of original watches in the country,’ he says.

Betting on collectors

Watch dealers are betting on the emergence of a new class of collectors in Kenya. While local sellers may not deal in investment-grade luxury brands such as Rolex, Patek Philippe and Audemars Piguet, some buyers are building collections around more accessible brands, including Casio, drawn by vintage designs.

The latest Knight Frank’s Wealth and Investment Trends 2026 report ranked luxury watches as Kenya’s second-most-popular passion investment, behind art and ahead of classic cars.

‘For some, it’s a memory attached to each piece,’ Hassanali says.

Life insurance premiums surged by 33.6 percent to Sh147.46 billion in the six months ended June 2026, pushing them past general covers, fueled by retirement savings channelled via private insurers and a surge in investment-linked products.

Data from the Insurance Regulatory Authority (IRA) shows gross premiums under long-term insurance business rose from Sh110.39 billion a year earlier.

The growth lifted life insurance’s share of total industry premiums above half, to about 51 percent, overtaking general insurance, which recorded a slower 9.2 percent rise to Sh141.90 billion from Sh129.88 billion.

The figures reinforced a shift in the industry’s premium mix towards long-term savings and investment products, even as general insurers continue to rely heavily on medical and motor covers.

The IRA attributed more than half of the increase in long-term premiums to two classes of business, being investments and deposit administration. The pair generated an extra Sh19.99 billion, accounting for 54 percent of the Sh37.06 billion increase in long-term premium income.

Investment-linked business recorded the fastest growth, with premiums rising 130.7 percent to Sh21.95 billion from Sh9.51 billion.

The investments class contributed 14.9 percent of long-term premiums, up from a much smaller base (8.6 percent) a year earlier, overtaking group life to become the third-largest contributor to long-term premiums.

The regulator attributed the increase mainly to unit trusts managed under unit-linked and linked-investment products, through which policyholders’ funds are invested in financial assets.

APA Life Assurance and Britam Life Assurance were the largest contributors to the expansion, accounting for 59.6 percent of the increase in investment-class premiums. APA’s premiums in the class rose by Sh3.88 billion, while Britam recorded an increase of Sh3.41 billion.

The performance points to the growing importance of investment-linked products in insurers’ business, combining investment exposure with insurance arrangements.

Deposit administration was the other major driver, with premiums increasing 21.1 percent to Sh43.31 billion from Sh35.75 billion. The class remained the largest contributor to long-term business, accounting for 29.4 percent of premiums.

The IRA linked the continued growth in deposit administration to the contracting out of National Social Security Fund (NSSF) tier II contributions, which are partly managed by insurers through deposit administration schemes. The deal allows employers to redirect part of employees’ pension contributions to an RBA-approved private pension scheme instead of the NSSF. The flow of these retirement contributions has become a key source of premium growth.

Kenindia Assurance and Britam Life accounted for 99.2 percent of the increase in deposit administration, with their premiums rising by Sh3.95 billion and Sh3.54 billion, respectively.

Under the NSSF framework, employers are allowed to channel tier II pension contributions into approved privately-managed schemes rather than the NSSF-managed arrangement. Other long-term insurance classes also expanded. Group life premiums rose 59.1 percent to Sh17.80 billion, while annuities increased 67.2 percent to Sh10.33 billion.

Personal pension business grew 19.8 percent to Sh14.72 billion.

Life assurance, the traditional protection-oriented class, recorded an 18.3 percent growth to Sh29.27 billion. Group credit was the only major class to contract, declining 6.1 percent to Sh10.07 billion.

Over the same period, general insurance premiums grew 9.2 percent to Sh141.90 billion. Medical remained the largest class, accounting for 41.7 percent of general premiums, followed by motor private and motor commercial.

Kenya’s insurance reach rose to an eight-year high of 2.63 percent last year from 2.45 percent the previous year, lifted by a jump in life insurance premiums that saw long-term covers overtake general insurance for the first time.

This marked the fifth consecutive annual increase and put the indicator at its highest level since 2017, when it stood at 2.68 percent.

The sustained growth has been supported by life cover, whose pace of growth has been above that of short-term covers over the past nine years.

Between 2016 and 2025, life insurance premiums more than tripled to Sh236.29 billion, while general insurance premiums rose 1.85 times to Sh225.38 billion.

Two decades ago, an idea that seemed improbable was beginning to take shape in Kenya. Moving money between people and places using a mobile phone almost looks simplistic today. It had not been tried at scale elsewhere, and scepticism was understandable.

It took an in-person demonstration by Michael Joseph to persuade the then Finance minister John Michuki of M-Pesa’s potential.

Today, mobile money has transformed how millions of people transact, save trade. Its significance extends beyond payments. It demonstrated that Africa can develop technology-led solutions to local challenges and scale them into platforms with global relevance.

I was recently invited to participate in a fireside chat during McKinsey’s Tech, Media and Telco Regional Leaders Forum in Nairobi, where the conversation focused on how Africa now stands at the threshold of another transformation, powered by artificial intelligence (AI).

The chance is not simply to adopt technologies developed elsewhere, but to apply intelligence to existing digital infrastructure to unlock new economic and social value.

The continent has a young population, mobile-first consumers, established digital financial ecosystems and a culture of innovation shaped by necessity. These strengths provide a foundation for AI solutions grounded in local realities.

Globally, AI development increasingly recognises the value of context. Organisations with distinctive customer insights, behavioural data and deep market understanding can build more relevant solutions. Innovators such as Wonderful AI are adapting AI to local languages, including Sheng, demonstrating why systems must reflect how people actually communicate.

But local relevance alone will not deliver transformation. AI must be supported by reliable infrastructure, quality data and people equipped to use it.

Across industries, automation is changing how work gets done. Historically, technological advances have changed the nature of work rather than eliminated it altogether. AI will test that pattern, making continuous learning and workforce adaptation essential.

The lesson for African businesses is developing talent which must become as important as acquiring technology.

As AI becomes embedded in financial services, healthcare and public services, questions of privacy, accountability and security become more consequential. The same governance principles that underpin trusted financial systems must extend to AI, including clear accountability, auditing and ongoing model monitoring.

Regulation is often presented as an obstacle to innovation. In practice, clear and proportionate governance can create the confidence businesses and citizens need to embrace new technologies. Speed and safeguards need not be competing priorities; trust must be designed into systems from the outset.

Connectivity, affordable devices, digital literacy and relevant services determine who benefits from technological progress. Without deliberate inclusion, AI risks concentrating opportunity among those already connected and advantaged.

Partnerships between business, government and development institutions can extend its reach.

That potential extends to humanitarian assistance.

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Djibouti’s State-owned geothermal agency has offered to pay Kenya Electricity Generating Company (KenGen) about Sh129 million ($1 million) as the first instalment towards a five-year-old debt arising from a geothermal drilling contract.

KenGen says in the latest annual report that the Djibouti Office of Geothermal Energy Development (ODDEG) has proposed an initial payment of $1 million against outstanding invoices of $2.13 million (Sh276.03 million), offering a potential breakthrough in the power producer’s debt recovery efforts.

‘The company continued to engage ODDEG to recover outstanding invoices amounting to $2.13 million, and ODDEG has acknowledged the debt and has proposed an initial payment of $1 million as the first instalment towards settlement,’ said KenGen.

The debt dates back to a 2021 contract valued at $6.45 million, or about Sh710 million at the time, under which KenGen was contracted to drill three geothermal wells at the Galla Le Koma field in Djibouti.

The proposed payment would form a partial recovery from the overseas contract. The Office of the Auditor General has previously flagged the contract, saying it had weak contractual terms that did not ‘sufficiently safeguard timely payment.’

The Djibouti project formed part of the company’s push to grow its geothermal drilling capabilities beyond Kenya. KenGen has built technical expertise in geothermal exploration, well drilling and consultancy through decades of developing the Olkaria fields.

Over time, it has turned this experience into a regional business by providing drilling, geoscientific studies and technical services to other countries developing geothermal power. Its international projects have included drilling 10 wells during the first phase of Ethiopia’s Aluto geothermal project, alongside work in Djibouti.

The firm has also undertaken geoscientific consultancy in Eswatini and drilling in Tanzania, extending its reach into areas seeking to tap underground heat for electricity generation.

KenGen’s revenue from diversification sources, which includes drilling and consultancy services, fell to Sh122.1 million in the financial year ended June 2026, from Sh263.6 million in 2025 and Sh759.2 million in 2024.

The firm’s annual report notes that drilling in Ethiopia and Djibouti have concluded, although the company continues to pursue further regional opportunities.

‘The company is also pursuing opportunities in the region and beyond, with ongoing negotiations for drilling and geoscientific works in Djibouti and Zambia,’ said the firm.

In Kenya, KenGen runs several geothermal stations, with Olkaria I power station being the first geothermal power plant in Africa.

The first unit of the Olkaria plant was commissioned in June 1981, with the second and third units coming in November 1982 and March 1985, respectively.

The company’s main business remains electricity generation, with total revenue rising 6.4 percent to Sh59.7 billion in the year ended June 2026, from Sh56.1 billion a year earlier.

Its overseas drilling and consultancy work is intended to diversify income while utilising its technical capabilities in a continent that has untapped geothermal potential.

Nigerian billionaire Aliko Dangote snatched the Sh42.5 billion Kenya Pipeline Company (KPC) share purchase deal from global oil majors who dragged their feet when presented with the opportunity to acquire the 24.7 percent stake in the newly listed firm.

Mr Dangote, Africa’s richest man, reportedly caught competing investors, largely oil majors, off guard by swiftly accepting the offer to buy the KPC stake from parastatals, underscoring the tycoon’s decisiveness and ability to close deals quickly.

Such decisiveness has become a hallmark of shrewd investors, who have made fortunes by trusting their instincts and making bold calls when others hesitate.

The State-backed agencies, including National Social Security Fund (NSSF), Public Servants Pension Scheme, County Workers Pension Fund and Unclaimed Financial Assets Authority, had a combined stake of 38.35 percent.

Others are pension funds in parastatals such as Kenya Power, KPC and Kenya Ports Authority (KPA).

Their combined stake has been cut to less than 15 percent, altering the ownership of KPC, less than eight months since its listing at the Nairobi Securities Exchange (NSE).

‘When presented with the opportunity, he jumped at it, without long stories on due diligence, agreements, etc. A true dollar billionaire mindset,’ said an insider who helped put together the deal.

With the acquisition, Mr Dangote is now the second-largest shareholder of KPC behind the Kenyan government. He may have also earned himself a seat or two on the board of the newly listed firm.

Those who were reportedly eyeing the KPC stake, the source said, included global oil industry heavyweights from the US and Europe with interests across the upstream, midstream and downstream segments of the petroleum business.

Multiple sources close to the deal reckon the transaction advisers had been in talks with these potential investors for the past two months over the acquisition of the stake from parastatals that participated in KPC’s initial public offering (IPO).

But the ‘big boys’ delayed their decision, laying emphasis on due diligence and legal documentation.

The delay gave Mr Dangote an opportunity to snap up the lucrative stake, potentially giving him influence over critical petroleum infrastructure that could be used to transport fuel from his planned Lamu refinery.

Mr Dangote said on Wednesday that he planned to invest $1.5bn (Sh195 billion) to expand KPC’s pipeline network in the middle of building a second 700,000-barrel-a-day refinery in Lamu worth Sh2.1 trillion, whose initial work the tycoon said had already started.

This represents an ambitious attempt to build an integrated African refining, storage and distribution business, with Kenya serving as a regional hub for East Africa and Namibia for southern Africa.

Kenya Pipeline’s 1,300km network transports diesel, petrol and jet fuel from the port of Mombasa across Kenya, supplying both the domestic market and neighbouring countries, including Uganda, the Democratic Republic of Congo, South Sudan and Rwanda.

In Namibia, Mr Dangote plans to build fuel storage tanks that would more than triple the capacity of the country’s existing national storage facility.

‘We are going very aggressively with that,’ Mr Dangote said in London, in reference to the planned KPC investment that is part of a continent-wide strategy to distribute refined products around Africa.

The State-backed agencies, including National Social Security Fund (NSSF), Public Servants Pension Scheme, County Workers Pension Fund and Unclaimed Financial Assets Authority, had a combined stake of 38.35 percent.

Others are pension funds in parastatals such as Kenya Power, KPC and Kenya Ports Authority (KPA).

Their combined stake has been cut to less than 15 percent, altering the ownership of KPC, less than eight months since its listing at the Nairobi Securities Exchange (NSE).

‘When presented with the opportunity, he jumped at it, without long stories on due diligence, agreements, etc. A true dollar billionaire mindset,’ said an insider who helped put together the deal.

With the acquisition, Mr Dangote is now the second-largest shareholder of KPC behind the Kenyan government. He may have also earned himself a seat or two on the board of the newly listed firm.

Those who were reportedly eyeing the KPC stake, the source said, included global oil industry heavyweights from the US and Europe with interests across the upstream, midstream and downstream segments of the petroleum business.

Multiple sources close to the deal reckon the transaction advisers had been in talks with these potential investors for the past two months over the acquisition of the stake from parastatals that participated in KPC’s initial public offering (IPO).

But the ‘big boys’ delayed their decision, laying emphasis on due diligence and legal documentation.

The delay gave Mr Dangote an opportunity to snap up the lucrative stake, potentially giving him influence over critical petroleum infrastructure that could be used to transport fuel from his planned Lamu refinery.

Mr Dangote said on Wednesday that he planned to invest $1.5bn (Sh195 billion) to expand KPC’s pipeline network in the middle of building a second 700,000-barrel-a-day refinery in Lamu worth Sh2.1 trillion, whose initial work the tycoon said had already started.

This represents an ambitious attempt to build an integrated African refining, storage and distribution business, with Kenya serving as a regional hub for East Africa and Namibia for southern Africa.

Kenya Pipeline’s 1,300km network transports diesel, petrol and jet fuel from the port of Mombasa across Kenya, supplying both the domestic market and neighbouring countries, including Uganda, the Democratic Republic of Congo, South Sudan and Rwanda.

In Namibia, Mr Dangote plans to build fuel storage tanks that would more than triple the capacity of the country’s existing national storage facility.

‘We are going very aggressively with that,’ Mr Dangote said in London, in reference to the planned KPC investment that is part of a continent-wide strategy to distribute refined products around Africa.

From the time the government decided to sell its 65 percent stake in KPC, a portion of the shares had been earmarked for oil marketing companies (OMCs), given that they are the pipeline operator’s main customers.

Although they gave the IPO a wide berth, transaction advisers widened its pool of suitors to include the oil majors post NSE listing, hoping to persuade them to take up the stake that parastatals had been pressured to buy.

But they are said to have taken a long time to accept the offer, allowing Mr Dangote to snap up the stake.

‘They were caught off guard by this (the Dangote) deal,’ added the source.

The Ugandan government is the third-largest shareholder in KPC with a 20 percent stake, while all the pension firms combined have under 15 percent.

With the acquisition of the 24.76 percent stake, Mr Dangote stands to earn an estimated Sh1.44 billion in dividends from KPC, which has proposed a payout of Sh0.32 per share.

The acquisition could also earn him board seats in KPC and the ability to shape strategic investments at the firm.

Uganda, with a smaller stake than Mr Dangote, earned several concessions from Kenya, including two board seats, after the neighbouring country threatened to walk away from buying shares in KPC’s IPO.

It is also a strategic move by Mr Dangote, as he can leverage the existing pipeline to drive the distribution of white fuel across the region.

‘It is easy to extend the pipeline (to other routes) from that strong position as well,’ said the source.

Before committing to the deal, Mr Dangote had reportedly sought concessions, including a restriction on imports of refined petroleum products, as a condition for proceeding with the proposed refinery.

The Nigerian tycoon argued that the plant would not be commercially viable without such safeguards.

It was not immediately clear whether such concessions had been given.

Mr Dangote seems to have developed a nose for a quick buck, noting that he often makes the decision first before it gets to the board.

When President William Ruto floated the idea of building a 700,000-barrel-a-day refinery in Kenya, it did not take him long to shift focus from Tanzania’s Tanga to Kenya’s Lamu.

The choice for Mr Dangote was initially between Tanga and Mombasa, before his team discovered Lamu.

‘I didn’t even know that name (Lamu). By January this year, I had never heard of this name Lamu. I only knew of Lamu when my people came back and said, ‘but there is a place called Lamu,” he said in an interview with the Daily Nation.

KPC

He said that as soon as he heard about the deal, he told his team to continue with it while he prepared to convince the board.

Mr Dangote has offered regional governments a combined 30 percent stake in the Kenyan refinery, which is scheduled to be completed in 2030.

The refinery, whose shares will eventually be listed on the Nairobi bourse, is the largest-ever foreign direct investment for Kenya.

Mr Dangote’s disclosure on KPC comes two days after at least eight parastatals sold their shares, less than eight months after spending billions to buy the stock through the IPO.

The KPC deal comes days after Mr Dangote broke ground on September 30 for the construction of a $16 billion (Sh2 trillion) Kenyan oil refinery in Lamu, aimed at lowering East Africa’s fuel costs and saving the region’s hard currency used to import refined products.

The billionaire wants to replicate his group’s 700,000-barrel-per-day Nigerian refinery as countries including Kenya and Uganda look to start producing crude oil.

About 13 parastatals splashed Sh64.23 billion on the Kenya Pipeline IPO, earning a 38.35 percent stake in the firm.

The NSSF has an estimated 23.3 percent stake in KPC, Public Servants Pension Scheme (7.94 percent), County Workers Pension Fund (2.2 percent) and Unclaimed Financial Assets Authority (1.98 percent).

The IPO had to raise at least Sh53.1 billion from more than 250 investors for it to proceed, a target that had not been achieved as the offer raced to a close.

This forced the State to urge parastatals, the State-backed pension scheme and the Ugandan government to save the IPO from collapse.

At Sh9.02, the State-owned firms sold the shares at nearly the same price as KPC’s IPO offer price on the Nairobi bourse.