Category: Business Daily

Across East Africa, fuel is one of the highest operating costs for businesses, often accounting for 60 percent of a fleet’s entire budget.

Fluctuating global fuel prices create constant budgeting uncertainty, forcing companies to either absorb costs, which squeezes profits, or pass them on to customers, which can hurt competitiveness.

Figures from the Energy and Petroleum Regulatory Authority (Epra) show that between 2021 and 2025, fuel prices in Kenya have risen by more than Sh70 due to increases in global landing costs, freight charges, as well as taxes and levies.

Yet, while the fluctuating oil prices contribute largely to the spiralling fuel expenses for businesses, many companies are losing millions for a different reason.

Due to a reliance on manual systems that are easy to manipulate and inefficient, many companies are losing millions through fuel theft and are spending more time on data entry than on key functions.

Think of paper logbooks, endless phone calls to approve fuelling and conducting monthly reconciliations to match receipts that never quite add up; these manual processes lead to losses that quietly drain profits.

According to estimates, businesses lose nearly 30 percent of productivity every year due to disconnected systems and manual data entry.

While businesses cannot control global fuel prices, they can control their fuel management through technology, which offers a more efficient and transparent way to manage expenses.

Research shows that digital tools can help businesses cut fuel costs by roughly 24 percent through route optimisation, real-time driver monitoring, prevention of fuel theft, minimising idle time and reducing maintenance expenses.

This digital approach isn’t a new idea; it’s a globally proven model.

You only need to look at market leaders like Wex and Corpay that have built massive businesses by helping companies simplify their fleet operations. Locally, we have integrated platforms like Pesapal Drive, which leverage technology to facilitate seamless fleet fuel management.

As global fuel prices continue to spiral, such tools can play a major role in enabling businesses to manage their expenses; however, integrating them into company operations introduces obstacles, which must be addressed for successful implementation.

Focusing on communication, resource allocation, and security planning can help to strengthen implementation efforts, helping businesses maximise the benefits of technological advancements.

Continuous digital upskilling can also help to equip organisations with the knowledge and skills required to integrate new technology into their operations effectively.

In addition, creating a culture that sees change as an opportunity rather than a threat by proactively sharing the reasons for the change and the benefits it will bring to organisations could enhance the adoption of emerging technologies.

A recent Business Daily article – IMF raises alarm over static Kenya shilling versus dollar-has set off a fresh wave of commentary about the exchange-rate policy.

The International Monetary Fund’s (IMF) public posture and press coverage are important and deserve scrutiny.

However, before concluding that exchange-rate ‘stability’ is automatically wrong or costly, it is worth taking a clear-eyed, evidence-based look at the facts on the ground.

In short, there is nothing intrinsically wrong with a stable currency.

On the contrary, a stable foreign-exchange environment can be a sign of well-functioning markets and effective central bank policy. It helps traders, importers and exporters plan, reduces hedging costs, and limits the inflationary pass-through from imported prices. The suggestion that stability alone is a problem risks fixing what is not broken.

It is important to start with the IMF’s public statements. An IMF staff team visited Nairobi in late September or early October 2025 to assess Kenya’s macroeconomic position and discuss a possible Fund-supported programme.

The Fund emphasised the need for macroeconomic stability, debt sustainability and market-based exchange rate flexibility as routine elements of its advice.

At some public forums and press accounts, IMF staff and some media characterised the shilling’s behaviour as ‘too stable,’ implying that the exchange rate may not be responding sufficiently to market signals and could be complicating monetary policy transmission.

Nevertheless, there are important nuances that were either omitted or not sufficiently emphasised in this account. First, the IMF’s standard policy advice that exchange rates should be primarily market-determined is a general principle, not a one-size-fits-all edict.

Secondly, the mere observation that an exchange rate is stable is not, by itself, proof of harmful intervention or of lost competitiveness.

To find the underlying cause of it, one has to examine the reserves, market liquidity, the composition of capital and current account flows, and whether monetary policy is achieving its objectives. On the face of these metrics, you begin to see where that stability is coming from.

A few critical facts should guide any assessment.

The Central Bank of Kenya (CBK) publications show usable reserves comfortably above four months of import cover.

For example, the CBK weekly and monthly bulletins report reserves and comment that usable reserves were around $12.1 billion, which is over five months of import cover in October 2025. Adequate reserves are a key buffer that allows the central bank to ensure orderly markets and to cushion shocks.

Recent government arrangements to secure oil on 180-day credit terms from suppliers materially reduce immediate dollar demand for fuel imports, which historically has exerted pressure on the shilling.

Such supply-side arrangements relieve short-term import financing stress and therefore contribute to exchange-rate stability without implying artificial suppression of price discovery.

Market quotes in 2025 repeatedly show the shilling trading in a narrow band around Sh129-130 per dollar at times, with small day-to-day movement.

A narrow trading band is not evidence of suppression by itself – it reflects the supply/demand balance in the interbank market in that period.

Taken together, these facts suggest a mixture of adequate reserves, robust forex inflows (remittances and services revenues), credit arrangements for critical imports, and transparent CBK market operations plausibly explain the shilling’s stability. A stable exchange rate regime can be beneficial to the economy as a whole, presenting a win-win position.

Importers, exporters, and transporters can budget, price and hedge with more confidence when exchange-rate movements are moderate and predictable.

Frequent, large swings in the exchange rate are costly: they increase the need for expensive hedges, push up working capital requirements, and discourage long-term contracts. A stable shilling, therefore, reduces frictional costs for trade.

If the IMF’s message is that markets should be allowed to signal problems when they arise, that is a standard and fair point. If the IMF’s public statements imply that any period of low exchange-rate volatility is necessarily a problem, then that is an overreach that requires correction.

The public and market participants are best served when international institutions and local policymakers continue to publish the data that lets everyone judge for themselves.

Kenya imports a substantial share of its energy and intermediate goods.

Large currency depreciations translate into immediate increases in imported fuel and commodity costs that feed into domestic inflation. Stability supports the central bank’s inflation-targeting framework by limiting imported inflation shocks and making monetary policy more effective.

Financial institutions and corporates face lower costs for hedging and for cross-border settlement when currency volatility is low. That increases the economy’s operational efficiency and reduces marginal costs for firms that rely on imported inputs.

Investors, both domestic and foreign, prefer predictable operating environments. Exchange-rate stability reduces one source of macroeconomic uncertainty and improves the business climate.

These benefits are not abstract but tangible, measurable impacts on the cost of doing business and on macroeconomic stability.

Several plausible, benign explanations can account for the shilling’s limited movement.

Worker remittances, tourism revenues and services exports have strengthened Kenya’s external receipts in recent periods. When such inflows are sustained, they increase the supply of foreign exchange and dampen volatility.

The CBK’s published methodology for the exchange rates, which is a weighted average of registered trades, and frequent published bulletins improve price discovery.

The CBK may also conduct operations aimed at smoothing spikes that is an accepted practice in many emerging markets while leaving the market’s price-setting role intact.

The oil credit facilities and extended supplier credit terms reduce the immediate dollar demand for imports and therefore reduce pressure on the exchange rate. This is pragmatic import financing management.

Large usable reserves make it easier for the CBK to support orderly conditions during temporary shocks without making a long-term commitment to an official exchange-rate peg. The CBK’s weekly bulletins explicitly note that reserves remain adequate as alluded earlier in this article.

It is worth acknowledging where the IMF’s caution may have legitimate grounding.

If domestic policy is unsustainable, stability can be temporary and end in a disruptive depreciation later. The IMF’s caution is often framed as a preventive concern about long-term competitiveness.

Very tight management of the exchange rate can make it harder for monetary policy to control inflation or for the exchange rate to perform its shock-absorbing role.

These are sensible, technical points. However, the detail is in the data and the execution. Are reserves adequate? Is the stability supported by balanced flows and policy coherence? Is monetary policy achieving its inflation target? On those questions, the data point to a more favourable picture for Kenya.

For a country like Kenya, which is working to preserve macro stability while addressing debt sustainability, a constructive path would be to continue and deepen public reporting on Forex liquidity, usable reserves (and how they are calculated), composition of inflows (remittances, tourism, export receipts), and any exceptional operations the CBK conducts to smooth volatility.

The IMF and CBK should publish a joint technical note if the Fund’s staff have concerns about the transmission mechanism. This note should set out indicators, thresholds and recommended adjustments.

Kenya must continue to combine prudent fiscal consolidation with monetary discipline and structural reforms to enhance exports, widen the tax base and strengthen debt management. This will reduce the chance that ‘stability’ proves temporary.

From the evidence available in CBK releases and market reporting, the recent steadiness of the shilling appears to reflect a combination of adequate reserves, robust inflows, transparent market pricing practices and structural financing arrangements for key imports.

Those are not signs of policy failure. They are, instead, plausible reasons why the exchange rate can be relatively stable without impairing competitiveness or monetary policy.

This is not to say that Kenya cannot be complacent. Prudent fiscal management, ongoing transparency, and a clear dialogue with the IMF on indicators and thresholds are essential in ensuring that Kenya stays on course and sustains its forex markets stability.

Kenya does not believe that securitised arrears should form part of its public debt stock, marking a major point of difference in ongoing discussions for a new programme funded by the International Monetary Fund (IMF).

Treasury Cabinet Secretary John Mbadi says the government’s position is that securitised debt should not be part of the sovereign’s liability as the buck of responsibility is passed to a special purpose vehicle, which owns the arrears on the State’s behalf.

The difference of opinion between Kenya and the IMF comes as Kenya securitises part of the collections from the Road Maintenance Levy Fund to pay investors who buy bonds, which will be issued by the Kenya Roads Board (KRB) for sector pending bills.

Kenya has previously indicated that it would also securitise other pending bills as a cure to the runaway arrears, as it struggles to pay the bills through tax revenues.

‘The issue of securitisation is not that the IMF thinks it’s the wrong idea. They are supporting securitisation, saying it is one of the most innovative ways of raising funds,’ said Mr Mbadi.

‘The concern is an accounting matter on whether we should capture it as a sovereign debt or not. Our position as the government is that once you sell a right to a special purpose vehicle (SPV), then there is no risk to the government at all. The IMF feels that we should treat it as a sovereign debt. Whichever way, we will agree.’

Kenya plans to issue road bonds totalling Sh300 billion, which will be covered by hiving off Sh12 out of every Sh25 per litre of petrol or diesel sold, representing the Road Maintenance Levy Fund.

About Sh7 will be used to pay investors buying into the first tranche of the Sh175 billion bond to cover current pending bills to road contractors.

The balance of Sh5 will cover payments to a second bond estimated at Sh125 billion, which is to foot future bills to contractors.

A special purpose vehicle-Oak Assetco SPV Limited has already been established to hold the securitised portion of the fuel levy.

Special-purpose vehicles are distinct legal entities created to isolate a specific asset, liability or financial risk.

In the case of Kenya, the securitisation of pending bills through the Oak Assetco SPV means that Kenya would no longer be responsible for the arrears.

The Sh175 billion first tranche of the roads bond is expected to be issued this month upon the conclusion of a market sounding process.

Proceeds from the bond are expected to first fund a Sh104 billion bridge loan facility from a syndicate of commercial banks, including the Trade and Development Bank, KCB Bank Kenya, Absa Bank Kenya and UBA Kenya Bank.

The KRB has distributed Sh93 billion from the bridge facility as payments to road contractors through its specific agencies, including the Kenya National Highways Authority, the Kenya Rural Roads Authority and the Kenya Urban Roads Authority.

The treatment of securitised debt could determine whether Kenya gets a new funded programme with the IMF, a successor to a previous arrangement terminated prematurely in March.

Kenya has stated that it has managed its expectations on the possibility of new IMF funding, making no budgetary appropriations over the medium term to June 2030.

‘You would note that we did not factor in an IMF-funded programme. If it comes, it will be a windfall in a sense in that it will help us reduce some other loans, whether domestic or external,’ said Mr Mbadi.

He said several follow-up talks are yet to take place before Kenya can clear a new programme with the fund.

Handwriting, once a sign of learning and creativity, is slowly disappearing as people trade notebooks for screens and for chats filled with emojis. Many Ge

n Zs can type fast but struggle to write neatly or even hold a pen for long. Experts say this shift affects more than just handwriting. It changes how we think, remember, and connect with others.

Victoria Sirengo, 27, is a counselling psychologist who still enjoys writing by hand. She remembers the last time she used a pen clearly.

‘I used a pen about a week ago to write a chapter of the book I am working on. Whenever I use a pen, I feel a consistent flow of ideas. My brain stays connected with what I want to put in writing.’

However, she has noticed that with the rise of technology, especially tools like WPS Office and Microsoft Word, handwriting has become rare in her daily life. ‘Mostly I type my work on a laptop or phone instead of writing it down.’

Victoria’s relationship with writing changed when she joined campus. ‘I realised most of my assignments had to be typed and submitted digitally. Because of that, I became careless about how I wrote. I stopped paying attention to how I shaped my letters or how neat my handwriting was. In high school, teachers were very strict about handwriting, so I used to write very neatly.’

As typing became easier, she began to lose interest in using a pen. ‘Eventually, I lost the zeal to write by hand because typing felt more effective,’ she said.

But this convenience came at a cost. ‘I rely a lot on autocorrect. It has made me lazy to think about the correct spelling of words. When typing, autocorrect gives you the right word instantly, so you do not get the chance to think for yourself. Now when I write by hand, I sometimes have to stop and confirm the spelling using my phone. Even simple words that used to come easily, I now struggle to remember.’

Technology has also changed the way she expresses herself.

‘I am more confident when I am texting than when I am speaking. When I text, the keyboard gives me suggestions and my brain connects the ideas better. But when I write by hand, I make many mistakes. Sometimes I skip words that are in my mind because I cannot put them down properly.’

Despite these challenges, Victoria has not stopped writing by hand. ‘Writing helps me connect my thoughts better than typing does.’

Technology has also taught her something unexpected. ‘I have learned empathy through AI. When I chat with artificial intelligence, the way it listens and responds is sometimes more empathetic than humans. I try to emulate that in how I talk to people.’

But she quickly adds, ‘Learning empathy from technology should not replace learning it from people. Humanity is fading because technology is taking away the role that people should play. I should have learned empathy from my lecturers or elders, not from a computer.’

I dislike autocorrect

Phoebe Atieno is a 29-year-old teacher and mental health advocate. She also mentors young people and takes part in programmes that support Sexual and Reproductive Health and Rights.

Phoebe has always enjoyed writing and learning. ‘If something stays in my mind for long, especially when I am doing research, you will always find me with a notebook and a pen.’

The last time she wrote by hand was three weeks ago.

She has noticed changes in her own handwriting over time. ‘Sometimes I scribble so much when I am in a hurry. But when I am settled and there are no distractions, just me, I always write perfectly and it is neat.’

Writing by hand helps her connect with her thoughts. Phoebe prefers to write by hand instead of typing. ‘I do not like autocorrect. If need be, I use it, but I always try to minimise how often I do. I believe in myself. There are words I have mastered at my fingertips.’

Even though she uses her phone and computer often, she tries to stay mindful about it. ‘When I am in a matatu, I pay with my phone, then keep it away until I reach my destination,’ she says. ‘That is my quiet time to think and reflect.’

Phoebe also notices how her own way of communicating has changed over the years. ‘When I visit home, I put my phone away. I want to talk with my grandmother, not just scroll online.’ She still enjoys calling her parents instead of sending long texts. ‘It feels more real when I hear their voices,’ she adds.

For Phoebe, handwriting, listening, and speaking directly to people are not old habits. They are part of her daily life. ‘When I take notes by hand, I listen better and understand more,’ she says. ‘It helps me think deeply, not just copy from the internet.’

A systemic problem

Professor Egara Kabaji, Professor of Language and Literary Communication at Masinde Muliro University, explains that handwriting is an ancient skill, thousands of years old, but it is now fading among modern generations.

He notes that the decline of handwriting begins in the early stages of education, where teachers no longer emphasise penmanship as they once did. ‘We cannot expect students to write well if we no longer teach them how to write,’ the professor says.

He believes that the problem is systemic and rooted in how teachers are trained.

According to Professor Kabaji, the rise of computers, phones, and other digital tools has made handwriting less common. People now spend more time typing than writing by hand. ‘If we are not practicing handwriting, how can we be good at it?’ He poses.

He admits that he now types most of his work directly into the computer, including his novels, and rarely writes by hand except when journaling.

The professor explains that handwriting involves multiple senses, listening, seeing, and physically writing, which helps students retain information better. When students type instead of writing notes by hand, they lose part of that learning process.

‘Typing is faster, but it disconnects you from what you are learning,’ he says. This reduced physical engagement affects memory, understanding, and mastery of language.

He also observes that spelling and grammar have suffered because of digital tools. ‘When computers correct our spelling, we stop learning how to spell,’ he explains. Young people today rely heavily on autocorrect, and when asked to write by hand, they make many spelling and grammatical mistakes.

Professor Kabaji stresses that the decline in letter writing has also weakened emotional expression and human connection.

‘In the past, writing letters allowed us to reflect, to think and to express emotions honestly,’ he says. ‘Now people even ask artificial intelligence to write love letters for them. Our brains are being put to sleep.’

Professor Kabaji also criticises the way emojis and abbreviations have replaced words. ‘If you use words, you can express your feelings better than an emoji,’ he argues.

He adds that most emojis are not even culturally representative. ‘This is another form of modern colonisation,’ he says.

While he acknowledges that artificial intelligence and predictive text are here to stay, he insists that people must use technology wisely. ‘AI can help us, but we must still think critically. The human mind should never be taken for granted.’

He warns that over-reliance on digital tools can weaken critical thinking and self-editing skills. Some writers, he observes, no longer read carefully or reflect deeply before publishing their work.

‘If you misuse technology, it erodes human connection,’ he cautions.

Kenya has partnered with Egypt to improve its military medical services, by enhancing its response to health emergencies, training medical personnel, and preparing for health challenges during peace and conflict times.

This collaboration will see the two countries jointly train military health workers, exchange technical expertise and conduct research on key medical issues affecting soldiers, such as trauma management, infectious diseases and mental health.

It will also enable doctors, nurses, and medical technicians from both countries to work and train in each other’s facilities as they seek to expand their skills and become familiar with advanced medical technologies.

‘By working together, pooling our expertise and sharing resources, we can significantly enhance the operational effectiveness and humanitarian outreach of our military medical services in both countries,’ said Brigadier Japheth Ndegwa, Kenya’s Acting Director of Medical Services.

Egypt already runs one of Africa’s most advanced military medical systems, complete with major hospitals and research institutions, and has decades of experience in battlefield surgery and medical logistics.

In turn, Kenya has made significant strides in incorporating mental health, wellness, and community-based care into its military healthcare system.

Brigadier Hytham Maher, co-chair of the Kenya-Egypt joint military committee, said that the collaboration would benefit not only the two countries, but also help to strengthen regional health and security ties.

‘We are very thankful for the opportunity to strengthen relations between our two countries, as this will open doors to collaboration in various industries, including health. A healthy nation builds itself up to become a great nation,’ said Brigadier Maher.

Kenya has been steadily investing in its military health system. A key project currently in progress is the Forces Referral and Research Hospital in Kabete, which is being developed at a cost of Sh19.3 billion.

This new facility, which will have 700 beds, is expected to become one of East Africa’s leading centres for military healthcare, training and research.

In the current financial year, the Ministry of Defence received approximately Sh214 billion to run its operations.

The Directorate of Medical Services (DMS) of the Kenya Defence Forces (KDF) is responsible for the health of soldiers and their families, as well as civilians in times of emergency.

The DMS runs a network of hospitals and medical centres, including the Defence Forces Memorial Hospital (DFMH), which provides specialised care and referrals, and the Defence Forces Wellness Centre (DFWC), which focuses on mental health and rehabilitation.

The Kenya Tea Development Agency (KTDA) is phasing out an inter-factory loan programme that has been running for decades in favour of commercial loans offered by banks.

The decision comes after a revelation that factories in the West of Rift had taken upto Sh 14 billion loans from those in the East of Rift over the years, with the credit facilities remaining unpaid.

The position has also been taken after the Principal Secretary for Agriculture Paul Kipronoh Ronoh directed the Tea Board of Kenya (TBK), the tea industry regulator to undertake audits on loans taken by KTDA factories.

The existing model was adopted to address short-term financial needs and ease the burden to the 700,000 small-scale tea growers supplying their produce to the KTDA factories from the effects of short and long-term commercial loans to finance operations.

As a result of the policy change, each of the 71 factories will from mid-November be able to access commercial loans from financial institutions in the country.

‘KTDA is in the process of phasing out the inter-factory loan mode and the reconciliation of previously borrowed funds is ongoing and nearing completion to ensure full accountability,’ KTDA said in a statement.

The agency allowed the inter-factory loans to finance operation costs, especially electricity costs, maintenance and repairs of machines and to cover shortfall in the annual bonus payment to farmers by factories that have cash flow challenges.

‘Beginning mid this month (November), factories will be able to access financing directly from commercial banks … a step that will enhance financial independence and strengthen stability across the tea sector,’ KTDA Board members stated.

KTDA Board vice chairman Omweno Ombasa led the zonal directors -Samson Mosonik Menjo, Vincent Arisi, Francis Wanjau and Philiph Langat- to welcome calls for an audit of the loans portfolio in the factories, but said that the cost of the exercise should not be passed on to the small scale growers supplying their green leaf to the agency.

‘We want to emphasise that we have nothing to hide and we welcome any lawful audit that promotes transparency and accountability. But the cost of such an audit should not be borne by farmers. Those calling for an audit should meet the associated expenses,’ the directors stated.

Last week, KTDA directors from the East of Rift led by Mr Chege Kirundi (KTDA Board chairman) said that there was a need to embrace ‘innovation, improve efficiency, and strengthen the resilience of the tea sector so as to increase income to farmers’.

Mr Gabriel Kagombe, who is the Gatundu South Member of Parliament claimed that factories in the West of Rift owed those from the East of Rift over Sh 14 billion in loans.

‘The loans were advanced by the East of Rift factories to those in the West of Rift to boost their operational capacities, pay bonuses and other financial demands. That is because factories in the Eastern region are doing well with farmers adopting high quality plucking of green leaf,’ Mr Kagombe said.

Principal Secretary for Agriculture Paul Ronoh has come under attack from a section of stakeholders for ordering the Tea Board of Kenya (TBK) to conduct an audit on loans taken by KTDA factories.

Dr Ronoh directed TBK to establish the total amount borrowed by individual KTDA factories, how the loans were utilised, the terms and conditions under which the loans were acquired, and the current outstanding loans balances for each factory.

‘The findings of this audit will enable the Ministry to evaluate the financial sustainability of the factories and appropriate operational measures aimed at addressing the challenges currently facing the tea sub sector,’ Dr Ronoh stated in the memo dated October 22, 2025 and addressed to the TBK Chief Executive Officer Willy Mutai.

The PS directed the Tea Board of Kenya to hand in the audit report within 14 days from the time the directive was issued.

But the PS has come under a scathing attack by stakeholders for allegedly overstepping his mandate and seeking to police a private entity, issuing directives without consultation and introducing politics in the industry.

‘The PS (Dr Ronoh) has issued illegal directive to moribund Tea Board of Kenya (TBK) to conduct an audit over a private company, (KTDA) which much as it has its accountability challenges, is far much better than some government institutions,’ Nakuru-based advocate Benhard Kipkoech Ngetich said.

The KTDA directors have also called for an end to the increasing politicization of the tea sector challenges which have negative bearing on marketing of Kenya’s made tea in the global market.

‘The tea industry thrives on professionalism, co-operation and stability and not on political contestation. We urge leaders to approach the matters with sobriety, consultation, and respect for institutional structures,’ they said.

They added that ‘political interference (in the sector) only breeds confusion, drives away investors, and undermines market confidence, ultimately hurting the farmers we seek to serve.’

The death of businessman Hannington Juma inside Kenya Revenue Authority’s (KRA) Lake Basin Mall in Kisumu recently dramatises the all-too-familiar daily script of agony by taxpayers in the hands of the taxman.

This sad account mirrors a tale of ancient Rome, where the emperor sent his General to pacify rioters in a small city over taxes. Instead, he wiped out everybody with the gun and reported restoring peace. A scribe then remarked: they created desolation and called it peace.

The KRA Commissioner General faces a similar dilemma, calling into focus the need to revamp its service charter to stop killing businesses literally.

Firstly, return to the twin canons of taxation on elasticity and certainty. Taxpayers need the psychological comfort of knowing that they are valued partners by intentional and responsive policies which create assurance that their businesses can be salvaged from risks of a depressed economy.

Bring back the MG Waweru tax model on tax policy units to cater for remission hardships contemplated under section 20 of the Value-Added Tax Act. This is an effective quick win for struggling taxpayers looking for a turnaround.

The KRA policy regime must consider flexible payment plans to align with the recent Court of Appeal ruling in a tussle with Keroche Industries. Section 5 of the KRA Act gives advisory powers to the Treasury Cabinet Secretary.

Nothing prohibits the KRA from repackaging its tax policies, including restructured payment plans to resuscitate ailing enterprises.

For instance, a while back, banks never used to give loans past three years without sureties; currently, they offer facilities running to 10 years without any security.

There is a need for strategic leadership to re-conceptualise Kenya’s debt burden and interface it with tax compliance.

The pressure to collect more taxes to hedge against risks of debt default must not destroy the industrial economy, resulting in business collapse, shutdowns, relocations, and capital flight.

Equally, staff suffocate under the weight of unrealistic targets when it has a data repository that can be used for informed revenue forecasts.

Again, while tax amnesty enabled KRA to surpass collection targets, such one-off schemes cannot adequately cater to the ever-changing dynamics of tax culture. It must loop in feedback from debt validation to craft long-term reward schemes for the taxpayers.

The concept of endgame is key to crafting a winning strategy. The KRA must take a hard look at set targets, staff attitude and infuse user-friendly policies to restore confidence in the hearts of Kenyan taxpayers.

There is also the lost art of institutional memory in change management. During Waweru era each TSO had clearly defined units for compliance, audit, policy-technical, debt and customer experience.

This sharply contrasts to the irony of bureaucratic nightmare occasioned by technology. A client recently shocked me when they received 5 letters from KRA in a span of 4 days.

To wit, Audit Notice; Special Table warning; TCC withdrawal threat; Agency Notice; and threat of TIMS shutdown. This is the level of uncertainty and anxiety which drives taxpayers to death and depression.

The difference between what Kenyan banks charge for loans and pay on deposits has hit its highest level in nine years at 7.44 percentage points, leaving borrowers and savers both worse off despite falling policy rates.

Central Bank of Kenya (CBK) data show that lending rates have eased by just 1.77 percentage points between August last year and September while deposit rates have fallen by 3.65 percentage points in the same period.

The cuts in deposit rates are in tandem with reduction on the benchmark CBK rate.

The uneven adjustment-which placed average interest rate at 15.07 percent in September and deposit rate at 7.63 percent-has pushed the spread to 7.44 percentage points.

This is the highest spread since August 2016, when the gap reached 11.29 percent just before Kenya introduced lending caps to tame the cost of credit.

The widening gap suggests that banks have been slow to pass on lower interest rates to borrowers, even as they moved quickly to cut what they pay depositors – a trend that reflects profit protection in the sector.

Concerns about the mismatch between lending rates and Central Bank Rate (CBR) had prompted CBK Governor Kamau Thugge to intervene more directly through moral suasion and threat of daily fines to improve rate transmission.

In addition, CBK has reviewed the risk-based pricing framework, establishing a common base lending rate for all banks based on the overnight-interbank lending rate, renamed the Kenya Shilling Overnight Interbank Average (Kesonia).

Kesonia is closely tied to the CBR under the interest-rate corridor framework, where overnight lending rates for borrowing between banks are held at no more or less than 0.75 percent of the benchmark.

The total cost of credit to a borrower equals Kesonia plus a premium denoted as K, which is determined according to the risk profile of each customer, but also factors in bank margins plus expected returns to shareholders.

Dr Thugge believes Kesonia has ended ‘all excuses’ for banks not to lower their lending rates, adding that the interest rates on loans should now mirror the prevailing policy rate.

‘There should be no excuse by banks for whatever reason [not to cut interest rates]. There have been quite a number of excuses. This time, there won’t be an excuse. Once we lower CBR, banks should also lower their interest rates,’ Dr Thugge said.

The CBR had hit a 12-year high of of 13 percent in February last year where it lasted up to August of the same year before CBK started

The CBR is now at 9.25 percent, being a 3.75 percentage points cut that has come from eight cuts since August last year.

This means the reduction in the deposit rate to an average of 7.63 percent compared with 11.28 percent at the start of August last year has nearly matched the CBR. However, over the same period, the cuts on lending rates have barely matched the cumulative cuts in the CBR.

Some banks have argued that they have been reluctant to cut lending rates significantly because they still face elevated credit risks in sectors like manufacturing, real estate and small and medium-sized enterprises.

The sharp drop in deposit rates reflects both lower competition for funds and subdued private-sector credit demand. The result has been a squeeze on savers, who are now earning the lowest returns on deposits in nearly a decade, while borrowers continue to face double-digit loan costs.

The last time the interest rate spread was this wide was in August 2016, when lending rates averaged 17.71 percent and deposit rates just 6.42 percent – a gap of 11.29 points.

That environment triggered public outcry and eventually led Parliament to enact the Banking (Amendment) Act of 2016, which capped lending rates at four percentage points above the CBR and set a floor for deposit rates. The interest rate caps were repealed in 2019 after concerns they had curtailed credit access, especially to SMEs.

The return of a large spread has seen CBK call out banks for not passing the benefits of a lower CBR to customers. This points to a long-standing issue of weak monetary transmission which has seen the regulator unveil a new loan pricing formula.

The widening spread is translating into improved profitability for banks. A faster drop in the cost of funds compared with the price of loans has seen banks maintain a growth in profit amid a soft economy.

CBK data shows Kenyan banks pre-tax profit for seven months to July grew by 8.75 percent to Sh177.7 billion from Sh163.4 billion in a similar period last year.

Equity Group, which is the only one that has so far published nine-month earnings shows net profit grew 32.6 percent to Sh52.12 billion in the period, mainly supported by Kenyan operations where there was a 51.2 percent rise in net earnings to Sh31.09 billion.

The persistence of high borrowing costs threatens to undermine the CBK’s efforts to boost private-sector credit, which had posted negative growth between November last year and March this year before recovering slightly to close September at a growth of five percent.

The declining deposit poses a challenge for savers given that inflation has been rising, hitting 4.6 percent in September compared with three percent at the start of the year and 2.7 percent in September last year.

Kenya has broken ground on what it says will be the world’s first geothermal-powered fertiliser project in a bid to lower the cost of key farm input and boost food security plans.

State-run Kenya Electricity Generating Company (KenGen) and China’s Kaishan Group on Monday entered into a joint venture to build a plant with a capacity to produce between 200,000 and 300,000 tonnes of ammonia-based fertiliser every year.

Kaishan’s local unit, Kaishan Terra Green Ammonia Ltd, will construct and operate the facility, while KenGen will supply 165 megawatts of geothermal energy to power the production of green ammonia and fertiliser for the project for 30 years.

The facility is expected to stabilise local fertiliser prices by reducing dollar-denominated import exposure, KenGen said in a statement, projecting to generate an estimated $13 million (about Sh1.68 billion) in annual net profit from the plant on completion.

‘[This is] a milestone in clean industrialisation,’ KenGen managing director Peter Njenga said in a statement, adding that geothermal power is the ‘bridge between Africa’s green energy potential and its manufacturing future’.

Kenya largely depends on fertiliser for farming, and its pricing remains the single biggest variable driving output of staple maize.

The country spends tens of billions of shillings to ship between 800,000 and 900,000 metric tonnes of fertiliser every year from countries such as Russia and Saudi Arabia, according to official figures.

President William Ruto’s administration has been subsidising fertiliser prices since taking power in September 2022 through the National Cereals and Produce Board to reduce the cost burden for farmers and bolster production.

Speaking at the groundbreaking ceremony, Dr Ruto said the plant would help boost food security, lower import bills, and create jobs.

‘This project shows that Kenya is not just a leading producer and consumer of clean energy; we are now going further to add value and generate prosperity from it,’ he said.

‘By harnessing our geothermal wealth, we are lowering fertiliser costs, supporting our farmers, and contributing to global climate goals.’

The launch of the project has come at a time when the latest official numbers have shown that Kenya has cut fertiliser imports for the second straight year, signalling a cooling of the government’s subsidy programme that drove record shipments in 2023 and stood at the heart of President Dr Ruto’s food security agenda.

Fertiliser imports between January and June 2025 stood at 443,701 tonnes, valued at nearly Sh25.63 billion, down from 445,857 tonnes worth Sh27.71 billion in the same period of 2024, data collated by the Kenya National Bureau of Statistics indicate.

The latest half-year numbers extend the decline from the 2023 peak of 629,566 tonnes worth Sh44.8 billion, representing a 29.52 percent fall in volume and 42.83 percent decline in value over two years.

‘Our agriculture is highly dependent on fertiliser prices, with high prices leading to a decline in maize output nationally. As we know, maize is the staple crop that feeds millions of Kenyans. That is why domestic, competitively priced fertiliser matters not just for commerce, but for food security for our people.’

The facility is forecast to create more than 2,000 direct and indirect jobs across construction, operations, maintenance, logistics and supply chains.

Job openings from the project include those for plant operators, process engineers, laboratory technicians, electricians and small businesses plugged into the value chain.

Kenya currently imports nearly all fertiliser consumed domestically, exposing farmers to currency swings, Red Sea freight volatility and commodity price shocks linked to global gas markets – because about 98 percent of world ammonia is made using natural gas.

A green-ammonia plant will help Kenya realise import substitution and climate competitiveness. The project is forecast to avoid more than 600,000 tonnes of carbon dioxide emissions each year.

Kenyans living and working abroad constitute a fundamental pillar of the nation’s economic framework. In 2024, diaspora inflows topped $4.95 billion (approximately Sh752.4 billion), surpassing foreign exchange earnings from tourism, tea, and horticulture.

According to the CBK, by the first half of 2025, remittances were above $2.5 million, which shows a great improvement. While the volume of these funds continues to rise, a large portion ends up in the same destination- real estate.

Buying land or putting up rental units is deeply ingrained in many diaspora investors’ plans, often driven by cultural expectations, family pressure, or the security of owning something tangible back home.

However, an overreliance on property as an investment is increasingly proving restrictive-particularly during market downturns, periods of limited liquidity, or protracted legal disputes over land. Consequently, capital remains tied up, financial flexibility is diminished, and investment objectives are delayed.

Kenya’s financial sector has evolved in recent years, offering more regulated and professionally managed investment options.

Money Market Funds (MMFs), in particular, have grown in popularity, especially among investors who want their savings to grow without being exposed to excessive risk.

MMFs pool capital from investors and deploy it into short-term, interest-earning assets such as Treasury Bills, fixed deposits, commercial paper, and short-dated bonds. The appeal is in the balance with relatively low risk, reasonable returns, and quick access to cash.

These funds are licensed and regulated by the Capital Markets Authority, with oversight by independent trustees and custodians.

The returns while modest, are competitive, often outpacing inflation and far better than idle bank savings. For diaspora investors managing obligations both abroad and in Kenya, MMFs are increasingly seen as an emergency buffer, a savings vehicle or a holding account while evaluating longer-term investments.

They are ideal for saving towards education, family support, or emergency needs back home, offering both flexibility and financial discipline.

Other fund options have emerged alongside MMFs. Fixed income funds target medium to long-term bonds and generally offer higher returns, though with slightly reduced liquidity. Balanced funds add a portion of equities to the mix, allowing for gradual capital growth for those with a higher risk appetite.

Fixed income or balanced funds can help diaspora investors grow their money steadily while planning for future goals like building a home or starting a business when they eventually return.

Some fund managers have also rolled out USD-denominated funds to cater to diaspora clients who want to keep their exposure in foreign currency while still investing in Kenyan instruments.

However, uptake among the diaspora remains limited. One key barrier is trust. Many investors have been burned by informal chamas, dishonest land brokers, or opaque off-plan property deals.

Another is investors are unaware that regulated financial products now exist in Kenya with reasonable entry points and consumer protection.

Addressing this requires collective action. Financial education must be prioritised. Institutions should simplify investment terms, provide clear, timely performance data and streamline onboarding for diaspora clients.

Diaspora associations and community leaders can also play a role in sharing credible information and countering the notion that property is the only safe investment.

This is not to say that real estate does not have a role. It does, and always will. But a smart investor does not put all their funds into a single type of asset.

Diversifying across liquid and fixed investments builds resilience, cushions against downturns and creates flexibility to meet different life goals, whether it is paying school fees, retiring early or responding to a family emergency without selling land at a loss.

Kenya’s financial sector is now in a position to support that kind of thoughtful planning.

For the diaspora, it is no longer just about sending money home, but about growing it wisely, protecting it, and keeping it accessible. The products are available. The regulation is in place. The tools exist.

The next step is yours. Do not just build back home. Invest with purpose. Let your money grow where your roots are.