Category: Business Daily

A dispute over ownership of a housing subsidiary linked to the Kenya Union of Savings and Credit Co-operatives (Kuscco) has prompted a fresh audit into the unit’s operations, amid concerns over a financial exposure of about Sh1.69 billion.

Kuscco, the umbrella organisation for saccos, says Kuscco Housing Co-operative Society (KHC) has operated for years as its subsidiary, where it holds a 70 percent stake. However, the apex body claims the unit’s directors have disputed Kuscco’s shareholding and attempted to assert their independence.

The dispute has prompted the intervention of the office of the Commissioner for Co-operative Development, with the commissioner, David Obonyo, ordering a review into the housing unit’s ownership structure and financial dealings. A letter seen by this publication shows that Kuscco managing director Arnold Munene wrote to Mr Obonyo on August 26 this year, protesting the actions of the housing unit’s leadership, led by CEO Julius Odera. KHC has been attempting to rebrand and move out of Kuscco’s premises.

In the letter to Mr Obonyo, Mr Munene sought orders to stop officials of KHC from convening an annual general meeting. He also called for an investigation into Mr Odera and requested a review and audit of the company’s books of accounts, cautioning that losing control of KHC will lead to loss of money.

‘We believe these actions are essential to protect member investments, uphold cooperative values, and maintain the reputation of the Union and the cooperative movement. We kindly ask for your immediate attention to this matter,’ reads Mr Munene’s letter.

The commissioner’s intervention comes amid revelations of a Sh1.69 billion fraud linked to the housing unit, which formed part of a wider Sh13.3 billion loss uncovered at Kuscco following a forensic audit conducted by PricewaterhouseCoopers (PwC).

The PwC fraud in KHC was in the form of former senior Kuscco officials irregularly tapping loans in their name and that of their associates, defaulting on payment, and then falsifying the books of accounts to conceal the theft. The fraud in housing loans was concentrated in KHC and Kuscco Housing Fund (KHF) -a Kuscco department that was restructured to KHC in December 2019.

For instance, the audit revealed that 240 loans valued at Sh1.11 billion were issued in excess of the maximum allowable limit of five times members’ savings, with the officials of Kuscco, KHC, and KHF leading in irregular borrowing.

Mr Odera is among the few Kusco officials who remain in office, serving as CEO of KHC, despite a forensic audit linking him to several financial improprieties, including conflict of interest, borrowing beyond allowed limits, and defaulting on payment.

For instance, the PwC audit shows Mr Odera obtained a Sh10 million loan from KHF against savings of only Sh940,700, representing a multiplier of 10.6 times. He also took a top-up loan of Sh4.5 million against savings of Sh228,000, translating to a multiplier of 19.7 times -far exceeding the approved maximum of five times.

Mr Munene’s letter prompted Mr Obonyo’s office into action. He appointed assistant commissioner for Co-operative Development of Nairobi, Fondo Nzovu, and senior co-operative auditor of Nairobi, John Kariuki, to carry out investigations.

Mr Munene states that Kuscco has been the ‘primary financier and operational backbone’ of KHC, and the unit continues to operate within Kuscco premises, yet some board members are claiming full ownership and control.

‘Some KHC directors have initiated a legal challenge against Kuscco’s shareholding structure and its representation on the KHC board. This action is described as inconsistent and misleading, given that Kuscco has historically held a majority of seats on the KHC board,’ said Mr Munene in the letter.

The investigations concluded last Wednesday though no formal findings have been released. KHC was formed in 2019 after Kuscco amended its bylaws, restructuring the Kuscco Housing Fund (KHF) from an internal department into a subsidiary.

Mr Munene said Kuscco had facilitated the transfer of Sh416 million in member savings from KHF to KHC even as 80 percent of KHF members transitioned into the new unit. He cautions that this could be lost if KHC breaks away.

The PwC audit revealed irregular loan approvals, diversion of rental income, and procurement anomalies. Kuscco argues that allowing the KHC team to continue carrying out affairs as though they are independent is an attempt to escape accountability.

‘The findings provide a strong legal basis for an inquiry and potential legal action against the CEO and other involved parties, as they demonstrate a failure to protect the financial interests of the cooperative and its members,’ said Mr Munene in the letter.

KHC shareholding was set at 70 percent for Kuscco and 30 percent for individual and corporate members, with a requirement that Kuscco retains at least 51 percent of ownership and board representation in all subsidiaries. This arrangement saw Kuscco nominate six of its directors, including the then managing director, George Ototo, to serve on the KHC board.

Mr Munene told Mr Obonyo that KHC has over the years ‘relied extensively’ on the financial, operational, and infrastructural support of Kuscco, including the Sh113.57 million disbursed between 2020 and July 2024 to cover staff salaries and office consumables for the unit. In 2020 alone, Kuscco absorbed Sh6.03 million in administrative costs of KHC.

Individuals joining KHC pay a registration fee of Sh3,000 with minimum shares of Sh20,000 and are sustained with at least Sh3,000 monthly contributions. Corporations joining KHC pay Sh10,000 with minimum shares of Sh50,000 and minimum monthly contributions of Sh10,000.

KHF and KHC continued to operate even after the restructuring, complicating the web of financial transactions. Kuscco is currently auctioning houses in the hands of 684 individuals who have defaulted on a Sh1.7 billion loan issued under KHF.

Kuscco is keen to maintain control over all its units as it seeks to recover the billions of shillings lost over the years through a web of financial improprieties.

Kuscco targets to recover at least 70 percent of the Sh8.8 billion principal amount that Saccos had invested in the umbrella entity within the next three years. This is through loan recoveries, auctions of houses and land for those who defaulted on mortgages, and the sale of a stake in the insurance arm.

Visitor arrivals through the country’s two main airports and other borders grew by 48.1 percent to 1.8 million during the first nine months of this year, coinciding with a visa-free policy that took effect at the start of 2025.

Data from the Kenya National Bureau of Statistics (KNBS) shows that in the nine months to September, visitors entering the country through the Jomo Kenyatta International Airport and the Moi International Airport, excluding Kenyans, rose from 1.27 million in a similar period last year.

The rise came in the wake of a decision by Kenya to impose a visa-free policy for all visitors, which, from the start of this year, was in a bid to grow tourism and boost earnings to the economy.

It also coincided with an increase in flight frequencies by several international airlines into the country, allowing for more travelers into Kenya.

Kenya introduced an electronic travel authorisation (eTA) system in 2024 as part of its visa-free policy on the expectation that the high number of visitors would lead to increased spending, thus boosting the economy.

The eTA has, however, sparked off complaints, especially for frequent visitors from non-African countries, given that, besides the charges, there is the short validity period of the permit. The eTA was later scrapped.

In the period under review, several airlines added new routes, including Kenya Airways and Etihad, while Air France expanded its passenger capacity with a larger aircraft from Paris to Nairobi.

Increased visitor numbers are set to further drive the country’s earnings from tourism, from the record high of Sh352.54 billion recorded last year, even though executives remained jittery about US President Donald Trump’s protectionist trade policies and the non-renewal of preferential terms under the African Growth and Opportunity Act (Agoa).

Last year, some 2.08 million tourists visited the country, up from 1.54 million who came a year earlier.

But the visitor numbers from June this year are likely to have been impacted by the anti-government protests that rocked Kenya.

A Central Bank of Kenya (CBK) survey published last month showed that Chief Executive Officers in the tourism and manufacturing sectors expect to suffer the biggest hit from Trump’s protectionist trade policies and the non-renewal of the Agoa terms.

The survey showed that overall, about two-thirds (64 percent) of the respondents expect to be negatively impacted by the recently raised US trade tariff on Kenyan goods and the expiry of the Agoa, which provides duty-free access to the US for thousands of products from 32 eligible African countries.

‘Most respondents anticipate being affected by the recent US trade tariffs and policy changes through higher import costs for inputs and finished goods and reduced exports to the US after the expiry of Agoa,’ the CBK survey said.

‘They also expect lower consumer demand due to reduced disposable incomes from declining profits and job losses, as well as secondary effects on local businesses reliant on affected clients. For instance, the hotel industry reported reduced business, with fewer conference bookings from NGOs and other donor-funded programmes’ it added.

President Trump, on April 2, 2025, imposed a 10 percent tariff on imports from some African nations, including Kenya.

Mr Trump invoked the International Emergency Economic Powers Act to impose a baseline tariff on all US trading partners in a bid to address what he termed as ‘absence of reciprocity in our bilateral trade relationships’.

Kenya is also among African countries set to be hardest hit by non-renewal of the Agoa deal with projections by the UN Conference on Trade and Development indicating that the country’s average weighted trade tariff with the US will nearly triple to 28 percent on expiry of the preferential trade deal, signaling a major blow to jobs and investments in the country’s textile and apparel sector.

The High Court in Nairobi has resolved how the estate of the late Chief Justice Johnson Evan Gicheru will be shared out amongst his heirs following a two-year succession process.

In the ruling, the court confirmed a grant issued earlier and outlined how the former Judiciary head’s extensive properties, company shares and vehicle would be allocated among beneficiaries.

Gicheru, who passed away on December 25, 2020, was survived by his widow, Margaret Wangechi Gicheru-who has since also died-and seven children.

He served as Chief Justice from 2003 to 2011 under the late President Mwai Kibaki.

Earlier in his career, he worked as a Senior State Counsel in the Office of the Attorney General and as an administrative officer in the Office of the President, before ascending to the High Court and Court of Appeal benches and ultimately becoming Chief Justice.

The estate comprised land parcels in Kirinyaga and Kajiado, shares in Kenya’s state power producer KenGen, shares in Kirinyaga Traders Company Limited, and a Volkswagen Touareg.

Since he died intestate-without a will-his family was compelled to undergo succession proceedings.

Court records indicate that disputes arose shortly after the widow obtained letters of administration in 2023, with beneficiaries disagreeing over the estate’s division.

This led the court to refer the parties to mediation, which yielded a partial settlement in August 2024, resolving some asset allocations but leaving seven jointly owned land parcels unresolved.

These remaining properties became the primary contention point. Some children advocated for equal distribution among all eight beneficiaries, including their mother.

However, the widow opposed this, arguing the subdivisions would shrink the land parcels into uneconomical bits while driving subdivision costs too high.

Instead, she proposed consolidating the seven adjacent parcels, retaining her legally entitled half-share as a tenant in common with her late husband, and dividing his remaining half equally among their seven children.

She also sought to uphold an earlier mediation agreement granting her three acres of the Kajiado Kaputie-North property, where she had built a permanent home, and disclosed that the seven parcels had outstanding land rates totaling Sh589,850.

Three daughters-Rosalind, Lilian, and Florence-countered this arrangement, arguing that while the widow was entitled to a life interest, the court should prioritise equitable distribution among all beneficiaries rather than granting her consolidated ownership.

The protesters argued that the court should consider the interests of the other beneficiaries.

After evaluating both proposals, the court ruled in favour of the widow’s approach, deeming it both fair and pragmatic.

The judge noted that Kenyan law permits courts to avoid physical land subdivision when it would create impractical units.

The court acknowledged that the widow had relinquished her life interest and was only claiming her lawful share.

Consolidating the parcels and splitting them into two equal portions-one retained by her estate and the other divided among the children-was deemed the most equitable solution.

In its ruling, the court stated: ‘Having regard to the circumstances, I favour the first proposal of the administrator. She has waived her life interest. She is entitled by operation of law to a half-share of each parcel. It is fair, therefore, that she be allowed to consolidate the parcels, divide the merged land into halves, retain her portion, and distribute the other half equally among the seven children.’

The judge directed that the widow’s half of the consolidated land remain with her estate, while the other half be equally apportioned to the children.

Additional assets, including the Volkswagen Touareg and KenGen shares, were confirmed as hers, while Kirinyaga Traders shares were allocated to their son, Evan Njue.

The court granted the administrator nine months to finalise property transfers, scheduling a compliance review for October 5, 2026.

Most of us think career growth is all about effort, that is doing more, learning more, pushing harder. We talk a lot about professional growth – new skills, leadership programmes, mentorship, and promotions. But what if your biggest career blocker isn’t your boss or your opportunities, but your body?

Across workplaces today, professionals are quietly burning out while trying to keep up with the pace of modern work. Skipping breakfast for early meetings, surviving on caffeine, and sleeping less than six hours a night has become normal. But what’s often dismissed as dedication is slowly turning into depletion.

The truth is, work performance doesn’t exist in isolation. It’s tied to what we eat, how we rest, and the spaces we work in. Physical health has become an invisible performance barrier.

When employees are constantly fatigued, battling headaches, or falling asleep in meetings, the problem isn’t laziness – it’s exhaustion.

Poor diet, lack of rest, and sedentary routines are quietly robbing people of focus and creativity. Many are also fighting lifestyle diseases like high blood pressure, diabetes, and obesity, conditions that don’t just impact their personal lives but their professional capacity too.

Ironically, some workplaces make this worse. A growing number of employees report feeling guilty or even victimised for taking sick leave. In some offices, requesting time off to recover is treated like a lack of commitment. The unspoken message is clear – show up, no matter how you feel.

This culture of presenteeism doesn’t build resilience; it breeds resentment and chronic illness. It’s a short-term gain for long-term loss.

Forward-thinking companies are starting to notice this connection. Beyond traditional wellness programmes, they’re reimagining how the workplace itself can support physical and mental health.

Some now offer meal benefits to encourage proper nutrition or gyms for physical workouts, while others provide break rooms or quiet zones where staff can decompress between tasks.

Employers who truly care about performance must see wellness as a shared responsibility, not a personal burden. Encouraging short walking breaks, flexible working hours, or even offering gym partnerships can do more for productivity than yet another meeting about productivity. People who move, eat well, and rest enough perform at a higher level, collaborate better, and stay longer.

Still, the responsibility doesn’t rest on organisations alone. Professionals must take ownership of their own well-being. Making time for medical check-ups, eating better, walking more, and sleeping properly aren’t acts of luxury; they’re acts of longevity.

Equally key is learning to set boundaries. Saying ‘no’ to endless late nights or unrealistic workloads isn’t a sign of weakness – it’s an act of self-preservation.

Sustainable careers are built by people who know when to pause, recharge, and protect their mental and physical limits. The discipline to rest is just as valuable as the drive to perform.

Success at work demands more than skills and ambition. It demands stamina , the ability to stay sharp, creative, and grounded in the face of constant change. You can’t pour from an empty cup, and you can’t grow from an exhausted shell.

The real career strategy is not just working hard or smart. It’s staying well and healthy enough to sustain the pace, thrive in the moment, and enjoy the rewards.

The value of building constructions in Nairobi dwarfed all 44 counties combined, underlining the concentration of real estate development in the capital city.

New Kenya National Bureau of Statistics (KNBS) data values work done on construction of buildings in Nairobi last year at Sh384.9 billion, which was 40.6 percent of all the constructions across the country.

Overall, work on setting up of buildings across the country was valued at Sh947.6 billion, inching closer to a trillion shillings after rising from Sh925 billion in 2023, and by a third over five years.

The KNBS data says during the year, the 44 counties had work valued at Sh361.7 billion on building constructions, translating to 38.2 percent of all constructions in the country.

Nairobi led with the highest value, followed by neighbouring Kiambu County, which implemented works valued at Sh120 billion, and Mombasa with works valued at Sh80.9 billion.

Nakuru County had building construction works valued at Sh35.4 billion, Machakos (Sh34.9 billion), and Kisumu (Sh23.9 billion).

The report provides context on construction across the country, at a time when the government continues to roll out projects under the affordable housing programme (AHP).

During the state of the nation address last month, President William Ruto said the government had launched the construction of 230,000 houses across the country.

‘The programme has created over 428,000 jobs, including architects, engineers, fundis, plumbers, electricians, carpenters, masons, transporters, and thousands of MSMEs in fittings and interior works. At peak next year, it will employ up to 1 million Kenyans,’ President Ruto said.

At least 13 counties had works valued more than Sh10 billion on the construction of buildings happening in 2024, including Machakos (Sh34.9 billion), Kisumu (Sh23.8 billion), Kajiado (Sh18.9 billion), Embu (Sh17 billion), Marsabit (Sh16 billion), and Murang’a (Sh15.9 billion).

Kirinyaga, Nyandarua, West Pokot, Tana River, and Lamu had the lowest value of construction works happening during the year, each valued below Sh1 billion.

The KNBS statistics show that 84,743 Kenyans were employed in construction of buildings last year, which was a slight drop from some 85,685 who were employed in 2023.

The industry, however, spent Sh236.2 billion paying the workers, which was a marginal increase from a wage bill of Sh235.1 billion the previous year.

Overall, output of the construction of buildings sub-sector was estimated at Sh849 billion, marking a 33.7 percent growth since 2020.

The statistics agency had earlier this year reported that the private sector completed construction of residential and commercial buildings valued at Sh149 billion in Nairobi last year, but the new report provides a wider picture of the total value of buildings that were completed, those that closed the year under construction, and those constructed by the government.

‘The total value of completed buildings in Nairobi City County declined by 2.3 percent to Sh149.9 billion in 2024. The number of reported completed private buildings declined from 22,093 in 2023 to 21,807 in 2024,’ KNBS said in the 2025 Economic Survey.

In the latest report on the value of building plans approved for construction in the capital, Nairobi City County data shows that buildings valued at Sh129.4 billion were approved over nine months to September 2025.

Wealthy families, celebrity athletes, investment delegations and ultra-private business executives are now driving the highest occupancy rates in Kenya’s presidential suites, setting a new standard for Kenya’s hospitality market.

Once dominated by heads of state and diplomatic entourages, the Sh1 million plus per night suites are increasingly being booked by a new class of high-spending travellers prioritising privacy, exclusivity and spaces that can double as both sanctuary and boardroom.

Mohammed Hersi, former Kenya Tourism Federation chairman, says presidential suites have evolved into some of the most strategic assets in Kenya’s luxury hospitality industry, driven by rising security expectations, changing traveller behavior, and a growing appetite for ultra-private experiences.

‘Wealthy families, celebrity athletes, investment delegations, and ultra-private business executives are driving the highest occupancy rates. The growth is unmistakable,’ Mr Hersi tells the Business Daily.

The new standard

Any hotel classified as five-star in Kenya, Mr Hersi says, now qualifies-or in some cases, is required-to have a presidential suite, a shift from earlier years when such suites were primarily reserved for hosting heads of state.

Over time, he says, the requirement has expanded to include all five-star establishments, reflecting the rising expectations of luxury travellers and the increasingly competitive nature of the hospitality sector.

‘The modern presidential suite goes far beyond size and aesthetics,’ says the hotelier, noting that since Covid-19 five years ago, guests are increasingly willing to pay $1,000 or more per night for the full experience.

According to the Kenya National Bureau of Statistics’ (KNBS) Quarterly Gross Domestic Product Report, Kenya’s hospitality sector recorded 4.1 percent growth in the first quarter of 2025, a sharp slowdown from the 38.1 percent surge during the same period last year, signalling a return to normal growth after the post-pandemic rebound of 2024.

‘We’re seeing a shift in expectations. High-end travellers are no longer satisfied with just luxury finishes; they want a space they can fully control, and many are willing to pay top dollar for that,’ says Mr Hersi.

What level of space control is satisfactory to these high-spending travellers?

‘They are highly engineered spaces built to international security standards, with separate entry and exit points, adjoining rooms for security, and pantries where meals can be inspected or prepared,’ explains Mr Hersi.

Despite the slower tourism growth pace, KNBs notes that international tourist arrivals rose 3.5 percent in the first four months of the year, reaching 751,692 visitors, while Kenya was named Africa’s fourth-best tourism destination and the top recipient of tourism FDI (foreign direct investment) in 2024 by UN Tourism, cementing its global reputation.

The requirement of presidential suite in all five star hotels underpins the competitive landscape of Nairobi’s luxury hospitality sector, where global and local brands want to attract top-tier clients and international events.

‘Nairobi hotels have them because they’re big with MICE (Meeting, Incentives, Conferences and Exhibitions). You can host 10 to 15 presidents at one go,’ Mr Hersi says.

What is luxury?

Javier Sanchez, the General Manager of Glee Nairobi, says that luxury today is defined by personalisation, privacy, and creating spaces where international clients feel completely at ease.

Mr Sanchez notes that focus is now on meeting the nuanced needs of privacy-driven international guests.

‘They come here to escape, to enjoy quiet and privacy. The true mark of luxury is the ability to be unseen, unheard, and entirely themselves. Our international clientele is no longer after extravagance; they want sanctuaries: spaces where every detail is tailored just for them,’ he explains.

Glee’s suite is divided into three distinct units, each with its own bedroom, living room, kitchen, and bathroom. Guests share a heated pool, dining area, and office space, all carefully insulated from the rest of the hotel.

‘What sets us apart is the way we personalise every experience for our guests. We charge $15,000, (Sh1.9 million) per night for the entire suite and $5,000 (Sh646,750) per night if you take the individual unit. A private chef prepares meals inside the suite so guests remain completely unseen by others in the hotel. We also gather details in advance; what temperature you want in your room, the type of linen on your bed, your preferred beverages, every element is tailor-made to suit the client,’ Mr Sanchez says.

‘It’s a sanctuary’

Acharya Javvaji, the General Manager of Muthu Sovereign Suites and Spa in Limuru, says their presidential suite attracts families on vacation as well as dignitaries seeking privacy and exclusive comfort.

‘We’ve seen a consistent rise in bookings for the presidential suite, especially among families looking for an intimate retreat and high-profile guests who require top-level discretion. Its exclusivity and tranquillity make it one of our most sought-after spaces. What guests love most is the experience. It’s not just a room, it’s a sanctuary. From private dining to the steam room and panoramic views, we designed it to feel like a home away from home for our most discerning visitors,’ he says.

Refined elegance

Anthony Chege, Nairobi Serena Hotel General Manager notes that the property has long been the address of choice for presidents and power brokers. Its two presidential suites, Chale and Lamu, stand as a cultural tribute to East African identity.

‘Our presidential suites are inspired by the coastal architectural traditions of Lamu and Zanzibar. They embrace a Pan-African approach with handcrafted details, warm textures and refined elegance,’ says Mr Chege.

Additionally, he notes that the demand for the suites has grown, attracting a diverse clientele, reflecting a broader shift in Kenya’s luxury hospitality market. Each client, Mr Chege observes, comes with different expectations, but all are seeking privacy, exclusivity, and highly personalised experiences.

‘We have seen increased bookings from statesmen, dignitaries, international celebrities, and high-profile corporate leaders, as well as local guests seeking elevated experiences for Valentine’s Day, anniversaries, and honeymoons. Booking one of the rooms comes with a price tag of Sh1million per night,’ he says.

Seamless integration

Over the years, Villa Rosa Kempinski and the Fairview Hotel have long maintained presidential-level accommodation designed to offer privacy, controlled access and the capacity to host official or sensitive meetings.

Kempinski’s suite, for instance, is known for its restricted floors and formal reception areas suitable for state guests. The Fairview, while more understated, caters to diplomatic travellers who prefer quiet, compound-style security and residential layouts.

Other Nairobi properties including Serena, Sankara and the Sarova Stanley also operate their own top-tier suites, reflecting sustained demand from government delegations, multinational executives and visiting dignitaries.

Safari Park Sales and Marketing Manager Mercy Wanjala says the value of the presidential suite lies in its seamless integration with high-level business and diplomatic needs. She notes that the hotel is occupied just 1-2 nights per month, translating to an annual rate of 7-10 percent.

She notes that bookings cluster around major conferences, national holidays, and key tourism seasons, with peak demand aligned to large summits, government and diplomatic events, cultural or sports occasions, and festive periods such as Christmas and New Year.

‘Corporate clients lead in frequency of bookings, followed closely by diplomatic delegations, international religious leaders, and government representatives. Heads of state and celebrities are accommodated selectively, while local high-net-worth clients occasionally reserve the suite for private events. All VIP bookings are managed under strict privacy and security protocols,’ says Ms Wanjala.

Bespoke services

She adds that most reservations for conferences, diplomatic visits, and corporate travel are made weeks or even months in advance to allow coordination of security and bespoke services.

However, last-minute bookings also occur, often for celebrity appearances, urgent corporate visits, or overflow from other events.

‘The standard nightly rate for Safari Park Hotel’s Presidential Suite is $2,500 plus government taxes, with custom pricing available for longer stays or bookings that include meeting rooms and catering. Pricing remains consistent regardless of season, event, or guest profile, though certain diplomatic or corporate contracts may involve confidential negotiated rates,’ she said.

Government spending on day-to-day expenses such as office supplies, transportation, fuel, travel and repairs in the first quarter of the current financial year ending June 2026, rose for the first time in three years, signaling easing of deep cuts in operational costs.

The National Treasury has disclosed in the latest quarterly budgetary report that operations and maintenance (O and M) expenditure for the July to September 2025 period climbed 41.34 percent to Sh320.90 billion.

The jump from Sh227.05 billion in the same quarter of the previous year marked the first early-year expansion in the cost of running public offices and maintaining State assets since President William Ruto took office, pledging deep austerity on non-essential supplies.

The spending further breached Treasury’s Sh267.08 billion quarterly O and M target by Sh53.82 billion, suggesting State ministries, departments and agencies have started catching up on deferred operational needs after two years of compressed budgets.

O and M spending covers a wide range of day-to-day costs, including office supplies, domestic and foreign travel, vehicle maintenance, fuel and lubrication costs, hospitality, repairs to public buildings and assets, telecommunications bills and other utilities such as electricity and water.

The rebound bucks the trend in the preceding two financial years. In the first quarter of last financial year ended June 2025, O and M spending dropped to Sh227.05 billion from Sh241.25 billion in the comparable quarter of financial year 2023/24 and Sh260.67 billion in 2022/23.

The rebound signals an easing of the deep cuts the administration imposed after the withdrawal of the Finance Bill 2024, which created a Sh344.3 billion hole in the national budget.

Hard-pressed citizens battling high cost of living amidst stagnant earnings resisted increased taxation, forcing the government into expenditure cuts of Sh170 billion and increased borrowing to make up for revenue shortfalls.

Operational expenses became a soft target, with sweeping reductions enforced across ministries, departments and agencies as the government raced to stabilise public finances during a period of youth-led nationwide anti-tax demonstrations.

‘What we ended up with was more like a 50-50 [situation] where we had to take more debt and reduce expenditure by almost Sh170 billion. This is a space where most government institutions had never been because. they did not get what they wanted,’ Treasury Principal Secretary Chris Kiptoo said on May 14 during an interview on NTV.

The early-financial year numbers indicate that after two years of austerity and restrained spending on non-essential operational needs, public offices have swung back into more active spending to cover their day-to-day functioning at a pace that could test the government’s commitment to tightening its purse strings.

The cuts that followed the collapse of the tax bill at the start of last fiscal year included removal of budgets for refurbishments and partitioning of government offices, purchase of new vehicles except for security agencies, halving of renovation expenditure and reduction of budgets for travel and hospitality.

Others were suspension of purchase of new cars, whose cost can top Sh30 million per unit, for the first six months, halving government advisers and ensuring enforcement of retirement of public servants aged 60.

Dr Ruto had also scrapped budgets for offices of first and second ladies as well as confidential budgets for State House and all public offices as part of expenditure cuts following the collapse of a plan for new and higher taxes.

The anti-government protests-induced austerity was in addition to earlier announced removal of non-essential expenditures such as printing, advertising, travel, communication supplies and services, training, hospitality, furniture, refurbishment and vehicle purchase as well as research and feasibility studies for public offices.

At the recent Kenya Revenue Authority (KRA) Summit, I had the privilege of joining fellow panellists to discuss how strategic data exchange is transforming public finance.

The conversation reaffirmed a lesson I have learned throughout my years in tax administration, that the future of effective revenue management depends on how well institutions connect, share information responsibly, and use data to build trust, protect revenue, and strengthen governance.

Across the world, governments are reimagining governance through data. When used strategically, data helps institutions anticipate risks, enhance transparency, and promote fairness.

For tax administrations, it has become the most powerful weapon against evasion, illicit trade, and financial crime. The shift toward data-driven governance is transforming how countries safeguard revenue.

When agencies share information securely and in real time, they create a single, accurate view of economic activity, closing compliance gaps and deterring fraud. But when institutions operate in silos, inefficiencies thrive and opportunities for manipulation multiply.

Kenya is firmly part of this transformation. Through deliberate investment in digital infrastructure and inter-agency collaboration, the KRA is demonstrating how data sharing can protect national revenue while upholding citizens’ rights.

Every data-sharing arrangement is guided by Kenya’s Data Protection Act and subjected to a rigorous risk-benefit analysis.

This ensures that the sensitivity of the data, potential vulnerabilities, and the intended public good are carefully weighed. Strong governance structures reinforce these safeguards while each agreement defines roles, responsibilities, and oversight mechanisms, supported by audit trails and reporting obligations.

These are not bureaucratic formalities but rather, strategic instruments for preserving institutional integrity and public confidence.

Kenya’s Medium-Term Revenue Strategy places inter-agency data sharing at the heart of modern revenue administration, and KRA’s results speak for themselves.

Integration with government agencies such as the Registrar of Persons and the Business Registration Service have enabled real-time verification of taxpayer identities and early detection of shell companies.

Linkages with the National Transport and Safety Authority and eCitizen platforms have enabled automated checks across business registrations, vehicle ownership, and declared income; providing a unified compliance picture that deters evasion.

In the excise sector, KRA’s collaboration with relevant law enforcement agencies has transformed monitoring of excisable goods, with digital tax stamps allowing real-time tracking of alcohol and tobacco products, reducing illicit trade and under-declaration.

Likewise, collaboration in the betting and gaming sector has enhanced oversight of betting transactions and verification of declared revenues. These integrations have improved compliance, sealed revenue leaks, and strengthened anti-money laundering controls.

KRA’s next frontier is to convert shared data into predictive intelligence through analytics and artificial intelligence to detect anomalies such as unexplained wealth, sudden income spikes, or mismatched value-added tax claims before they evolve into non-compliance.

Achieving this will require interoperability and common data standards to ensure that government systems communicate efficiently. Such seamless integration will significantly reduce friction for compliant taxpayers while raising the cost of evasion for bad actors.

Strategic data sharing is, therefore, a governance philosophy, reflecting Kenya’s broader commitment to transparency, accountability, and equity in public finance.

For the KRA, the goal is not surveillance but service; to use data responsibly to build a fairer, more efficient tax system where compliance is easy, evasion is difficult, and trust is strengthened.

Commercial banks are using the Central Bank Rate (CBR) as their benchmark in setting loan prices, despite earlier rejecting it and negotiating the creation of the Kenya Shilling Overnight Interbank Average (Kesonia) which they have now shelved.

Banks including KCB, Equity, Absa, NCBA and DTB have issued notices that they will be using CBR as their reference rate in the risk based pricing model which took effect on December 1.

Banks were expected to use Kesonia -which is based on the price at which banks borrow from each other referred to as interbank rate- as they are the ones who had pushed for its creation after they rejected the Central Bank of Kenya proposal to use the CBR as a benchmark for loan pricing.

‘All new local currency variable rate loan facilities processed from December 1, 2025 will be priced under the revised model which comprises a common reference rate plus a premium (K),” said Absa Bank Kenya in a public notice.

“The common reference rate applicable will be the Central Bank Rate as determined by the monetary policy committee of the Central Bank of Kenya while the premium is determined by customer specific risk profile among other factors.”

The bank said it was testing its core system before using Kesonia as its benchmark rate.

‘We are doing thorough testing on Kesonia including tests with our core banking and related systems that use Kesonia. We will avail Kesonia for use by our customers when we conclude the systems work,’ said Yusuf Omari, Absa’s chief finance officer.

Banks had the option of using Kesonia or CBR as their reference rate under the new risk-based pricing model. Co-operative Bank of Kenya and its subsidiary Kingdom Bank are the only ones who have notified the public of adopting Kesonia.

The Kenyan banks had rejected the use of CBR in April, arguing that it was equivalent to reintroducing interest rate capping because CBR is not market driven but set in a boardroom by the CBK’s monetary policy committee.

‘By choosing to use CBR, a bank allows itself time to learn and accommodate system upgrades required before Kesonia use,’ said Kenya Bankers Association chief executive Raimond Molenje.

‘The industry remains committed to ensuring that pricing of credit always reflects market conditions and economic fundamentals,’ he added.

Insiders in the industry said the banks were reluctant to use Kesonia as it was volatile indicating they would have to review lending rates regularly. Such reviews need to be authorized by the CBK and communicated to the customers before they take effect.

Banks had earlier insisted on the use of the interbank rate arguing it captured market dynamics unlike the CBR.

‘KBA does not support the CBK proposal in its entirety. By rejecting the interbank rate as a preferred unified base rate and proposing the CBR, the CBK will not operationalize the policy decision after setting the CBR,’ Mr Molenje had argued in a memo rejecting use of CBR.

CBK has been publishing Kesonia on its website as it prepares the market to use it as the benchmark rate. Kesonia is currently at 9.25 percent equaling the CBR which was set at 9.25 percent in MPC’s October meeting.

‘We continue to engage with CBK to ensure the transition is smooth and does not inconvenience customers while also observing all relevant laws governing the credit market,’ said Mr Molenje.

Banks are expected to transition loans issued before December 1 to the new loan pricing model by February 28, 2026.

Credit Bank is eying Sh4.5 billion fresh capital through a private placement, in the race to comply with the new capital rules that require commercial lenders to have at least Sh3 billion core capital by the end of this month.

The lender, which ended September with core capital of Sh1.23 billion, now needs at least Sh1.77 billion to comply with the new law.

The legislation raised the minimum core capital requirement from Sh1 billion and provides for a gradual increase to Sh10 billion by 2029.

The bank has called an extraordinary general meeting (EGM) on December 19 for shareholders to vote on the proposal to issue up to 45 million ordinary shares to existing and new investors at a price of Sh100 each.

Ahead of the EGM, the lender has received a boost after two key shareholders -ShoreCap III LP and Sansora Group of Companies- committed to the Central Bank of Kenya (CBK) that they are going to inject into Credit Bank Sh1 billion each by the end of this month.

Letters seen by this publication show Sansora Group of Companies CEO Leon Nyachae has written to CBK director of banking supervision making the commitment.

Equator Capital Partners (ECP), the investment manager for ShoreCap III, has also made a similar commitment in writing.

‘Our board of directors has recently considered the matter and resolved to invest an additional Sh1 billion in Credit Bank PLC by 31st December 2025,’ said Mr Nyachae in the letter.

Further, Sansora sought CBK approval to allow it and its associate companies to temporarily exceed the 25 percent limit for aggregate shareholding in Credit Bank for a period of 36 months as the lender continues to scout for new investors.

ECP chief investment officer Suleiman Kiggundu said in the letter to the CBK the conditions for the Sh1 billion injection will include an additional board seat and the listing of the bank’s share on the Nairobi Securities Exchange within three years.

‘We look forward to working closely with the CBK towards finalising the underlying processes to enable the follow-on investment to be funded by a target completion date of 15th December 2025,’ said Mr Kiggundu in the letter.

Credit Bank’s cash call reflects a similar move by other lenders such as African Banking Corporation (ABC) Bank, Paramount Bank and Sidian Bank, which have turned to a rights issue to secure fresh capital for immediate and long-term compliance. This is after a change in law compelling banks to build core capital gradually up to Sh10 billion by 2029.

The Sh2 billion to be raised from the two institutional investors will lift Credit Bank’s core capital to at least Sh3.23 billion, making it compliant with the Sh3 billion minimum capital required by the end of December. This will give the lender room to look for additional capital to comply with a higher bar come the end of next year.

At the EGM, Credit Bank is also seeking approval to issue a $1.5 million (Sh194.1 million) convertible note for supplementary capital. This will have a maturity of at least five years priced at six percent annually.

The minimum core capital in the banking sector was, through the Business Laws (Amendment) Act 2024, revised upward from Sh1 billion to Sh3 billion by the end of December, Sh5 billion by the close of 2026, Sh6 billion by the end of 2027, Sh8 billion in 2028 and Sh10 billion by the close of 2029.