Category: Business Daily

When politicians are having a go at each other, they will dismiss an opponent’s statements as empty talk. Those are ‘just words’ they will say, to imply that their rivals are making rhetorical statements, or promises, but not taking meaningful action.

Words are, however, powerful tools for persuasion, influence, and governance. Taking cue from Demosthenes of ancient Athens, politicians use words to influence public opinion, often inspiring or discouraging, action.

They use rhetorical devices – such as emotional appeals, metaphors and repetition – to make their messages memorable and connect with voters.

Language shapes the peoples’ understanding of the economy and political issues. The choice of words frames debate, highlights policy, and portrays opponents in a specific light. Words themselves can constitute harm such as in hate speech.

And words are driving negativity in our society today. Politicians are using negative language to exploit a weird combination of inherent psychological biases and environmental factors, to amplify our pessimism and conflict.

Some literature suggests that we were “hardwired” to focus on negative information as a survival mechanism. It helped our ancestors identify and avoid dangers.

Today, this bias causes people to dwell on insults more than compliments, losses more than gains, and a single piece of bad news, than the dozen good ones.

Past trauma, unresolved personal pain, and general insecurities are often projected outward as bitterness, judgment, and aggression. Low self-confidence leads people to criticize others to feel better about themselves.

Many individuals struggle with emotions such as anger, fear, and frustration, leading to outbursts or withdrawal, as a coping mechanisms.

News reporting focuses on drama, conflict, and alarm to generate clicks and grab attention. This feeds the negativity bias, creating a skewed perception that Kenya is struggling more than it actually is.

Social media rewards outrage and sarcasm with more engagement (likes, shares), than reason and empathy. The imagined anonymity of the internet emboldens users to behave more negatively than they would in person. And because we stay within our groups, it creates echo chambers.

Current concerns about cost of living, job security, financial instability, societal expectations of success, can create chronic stress and a sense of helplessness. Both manifest as cynicism and negativity.

We learn behavioural and thinking patterns from those around us. So being consistently exposed to negative sentiments and role models leads us to adopt similar pessimistic outlooks.

Kenyan political and media strategists often exploit the negativity bias by using fear and outrage to engage and mobilise audiences. This deepens societal divisions and makes compromise seem impossible. Witness the on-going by-elections.

Yet, in all instances, context infuses perspective, itself communicated through words. As we debated the causes of current negativity with friends from the education sector last weekend, we marveled at how clean Kisumu City is.

We were impressed by the road infrastructure. We marveled that Kisumu is thriving, while Nyeri seems stagnated, yet the city is often caricatured as the hotbed of street protest while Mt Kenya is seen as too posh and businesslike to picket. But as interchanges spring up in the lakeside City, Nyeri retains its colonial one-street character.

Holding government to account, including through street protest, has not stopped Kisumu from being a first-class city! Context. Perspective.

After hosting the Africa Smart Cities Alliance Summit two months ago, Kisumu is now the hub for smart growth on the continent. Murang’a County has adopted the smart towns programme. While Laikipia, where the idea came earlier, has thrown it into the dustbin, moth balling it on the altar of political expediency.

While receiving a lifetime achievement award at the Annual Journalism Excellence Awards, Mr Lee Njiru told me a gem.

Communication can build or destroy, he said. A report of you in the national park with three women, could imply that you are amorous, bringing your name into some disrepute. And, as a statement fact, it would not be actionable in court. Except of course you were with your wife and sisters, on a game drive after church! Context drives perspective!

Negative communication is driving negative sentiment. Negativity influences behaviour. Negative sentiments means businesses and consumers remain restrained, and demand weak. Rather than ‘just words’, what politicians say matters.

However, investors in the Safaricom security will be taking home a higher return as the green bond does not attract 15 percent withholding tax that is payable on interest earned from corporate bonds like the one issued by EABL.

This means the Safaricom bond is offering an equivalent of 12.35 percent if it were tax inclusive – being a higher yield than EABL’s 11.8 percent return.

Safaricom is seeking billions of shillings to broaden its 4G and 5G networks as it ramps up its data business to offset a decline in mobile calls, where it has seen a small revenue fall due to saturation.

Data is one of Safaricom’s fastest-growing revenue lines and it hopes that increased smartphone usage will boost it further.

In Ethiopia, it plans to boost its network expansion and ease cash flow for the subsidiary where it owns a 53.7 percent stake.

So-called green bonds are fixed income securities that raise capital for projects in renewable energy, energy efficiency, green transport and waste-water treatment.

Safaricom is raising the funds to carry out sustainability projects in Kenya and Ethiopia. The projects are hinged on five pillars, which include energy efficiency, use of renewable energy, green buildings, pollution prevention and environmentally sustainable management of living resources and land use.

Some of the projects include use of solar energy to power its sites, upgrades to 5G networks, renovate existing building to make them green compliant, implement AI backed programs to reduce energy consumption.

The telcom will have a 24-month window to put the bond proceeds in the sustainable projects during which it will have an option to invest the funds in other income earning assets.

‘As at the date of this Information Memorandum, interest income payable on the Notes under any Tranche that are certified to be used to raise funds for infrastructure, projects and assets defined under Green Bonds Standards and Guidelines, and other social services, where such Tranche has a tenor of at least three (3) years will be exempt from withholding tax,’ reads Safaricom’s Information Memorandum.

Safaricom can raise a maximum of Sh20 billion from the first tranche in case of an oversubscription as it can take an extra Sh5 billion in what is termed a greenshoe option.

The green bond comes at a time when interest rates have been on a downward trend as the Central Bank of Kenya rejects high-priced money in Treasury bills and bonds markets.

Currently, a 10-year bond is trading at 13.05 percent, being 2.87percentage points lower than rates offered a year ago.

‘Despite the lower yield, we anticipate strong, potentially oversubscribed demand for the note, supported by the company’s low-risk credit profile, large customer base, and the growing global and local appetite for ESG-linked investments,’ said Valerie Okello, a research analyst at Capital A Investment Bank.

EABL raised Sh16.7 billion in the first tranche of its Sh20 billion bond in which it was targeting Sh11 billion signalling market appetite for well rewarding corporate bonds.

‘Environmental Social and Governance instruments are typically floated below market rates to attract the expanding pool of sustainability-focused investors, and Safaricom is leveraging both the greenium narrative and the broader social impact of the note to justify the modest pricing,’ said Ms Okello.

She noted that issuing a corporate bond is a more cost-effective funding option for Safaricom compared to sourcing bank loans, which would likely come at significantly higher rates.

Safaricom’s first corporate bond is expected to revitalise a debt market which has been in a lull for years as Treasury bonds dominate.

Only Sh25.9 billion worth of corporate bonds were outstanding at the NSE at the end of September, including notes by EABL, Family Bank, the Kenya Mortgage Refinance Company, Linzi Finco Trust and Batian Income Properties.

The corporate debt segment was dented by issuers who went belly up soon after issuing their notes, including Imperial Bank.

Micro-lender Real People, which has Sh1.63 billion in outstanding notes, also ran into financial headwinds soon after issuing its medium-term notes.

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

Its net profit grew from Sh28.11 billion the previous year, and it expects to declare an interim dividend in February.

The Kenya business continued to be the main profit driver on the back of M-Pesa, the firm’s largest unit and on course to generate half of the telco’s revenues.

Its reported loss in Ethiopia dropped by 59 percent compared to the first half of the previous financial year, which was heavily impacted by a depreciation of the birr currency.

The loss in Ethiopia that is attributed to Safaricom dropped to Sh15.2 billion from Sh19.4 billion in the same period a year earlier, translating to a gain of Sh4.2 billion.

Safaricom launched in Ethiopia in 2022 as the Addis government opened up the tightly-controlled economy to foreign competition and is hoping its presence in Africa’s second most populous country will power future growth.

Its diversification from the saturated voice and SMS business is paying off, with M-Pesa, mobile data and fixed internet emerging as sales drivers.

Safaricom’s revenue rose to Sh199.9 billion in the six months to September, from Sh179.9 billion in the same period a year earlier, reflecting a 11.1 percent growth.

Revenue from mobile financial service M-Pesa rose to Sh88.1 billion from Sh77.2 billion previously, reflecting a growth of 14 percent.

Family Bank has tapped transactional advisors for its listing at the Nairobi Securities Exchange as it announced a 56 percent increase in net profit for the nine months to September on the back of earnings from government securities.

The bank reported a net profit of Sh3.5 billion, up from Sh2.3 billion in a similar period a year earlier.

The improved performance was on the back of a 43.1 percent jump in interest earned from Treasury bills and bonds to Sh5.5 billion, up from Sh3.8 billion.

The medium sized bank, which has flirted with public listing by introduction for over a decade, plans to sell its shares on the Nairobi Securities Exchange by mid next year, disclosing it had contracted advisors to guide the process.

‘We have already visited the Capital Markets Authority so that we know what we need to do and we have engaged transaction advisers to guide us in the journey to listing with a target of the first half of next year,’ said the bank’s Chief Finance Officer, Paul Ngaragari.

The bank disclosed it hopes to get approvals from the regulators, Central Bank of Kenya and Capital Markets Authority, by the end of this year.

Listing by introduction means the bank does not plan to raise additional capital with the share sale but instead gives shareholders a trading platform to make their stocks more liquid.

The lender recently concluded a Sh6.2 billion capital raising among existing shareholders in what is referred to as private placement.

Family bank said the private placement was successful but failed to give details, citing regulatory approvals.

‘Results of the private placement will be announced next week by the chairman as we are still awaiting regulatory approvals,’ said Mr Ngaragari.

Shareholders of the bank approved the listing last month. Top ownership of the bank is dominated by the founder Titus Muya and his family. It also includes the Kenya Tea Development Agency with 16.2 percent stake.

Family Bank reported a 10.1 percent growth of its loan book to Sh103.7 billion at a time when credit expansion had lagged due to a tough economic environment.

Interest income from lending to the private sector jumped 12.1 percent riding on the larger loan book and increased uptake of digital loans which have higher turnovers.

Customer savings with the bank expanded 15.1 percent to Sh147.3 billion, a bulk of which was invested in government securities as credit growth lagged.

Other income of the bank, which reflects earning from trading of government securities, more than doubled to Sh1.2 billion compared to Sh526.4 million a year earlier.

As Europeans started getting comfortable living in Kenya in the early 1900s, they gradually established private member clubs, where settlers would gather to enjoy games and to dine as they socialised.

After independence, the clubs shifted from being a whites-only affair, though the elites of the young republic maintained the traditions of their erstwhile colonisers.

Today, as some of the clubs mark a century of existence, there is the burning question of whether they are locking out the youthful populations through their pricing policies and the rules of engagement.

‘There are some clubs where most people are old generation and the young men have not come in,’ says Mr Felix Okatch, one of the directors at the United Kenya Club.

Mr Okatch, who has been a member of one club or another since 1983, says clubs should make it conducive for young people to join as they form the majority of the population.

‘I encourage young men to join, particularly those who have started business,’ Mr Okatch notes.

Private member clubs, which are designed to be a confluence point for the wealthy, exist for various reasons.

‘One benefit is social, where people of a class come together – those who are capable or the top cream,’ says Mr Okatch, who is also an author.

‘Over time, these clubs have developed facilities like golf, squash, cricket, lawn tennis, swimming pool, gym, and many more activities. The clubs also have bars, restaurants, accommodation, and some have apartments.’

The clubs also help businesspeople as they can be used to host crucial meetings.

‘You come with a car, you park, then you secure a deal,’ says Mr Okatch.

Another benefit is that a member of a club in one part of Kenya can travel to another part of the country and enjoy benefits of another club if the two have a reciprocating arrangement.

‘If somebody’s in Eldoret Club, he can go to Nyanza Club, to Nyeri Club, Mombasa Club, Kitale Club, and enjoy like the other [members],’ says Mr Okatch.

The clubs are also known for the strict rules they enforce. There are guidelines on the dress code, conduct within the premises, welcoming guests, among others.

In a number of the clubs, making a phone call in some spaces can earn someone a fine. Some do not permit wearing a cap in some areas while others prohibit donning denim clothing. A collarless T-shirt is hardly allowed in most clubs, as are sandals.

A recently determined court case, pitting lawyer Donald Kipkorir against the Muthaiga Country Club, revealed how stringent some of the requirements can be. Mr Kipkorir was denied entry at the club in August 2024 on various grounds.

Mr Kipkorir later sued the club, saying the manner in which he had been turned away went against his right to dignity as no sufficient explanation was given.

The court heard that the lawyer visited the premises to meet his clients who are members of the club. However, on that day, he was denied entry. The club argued that it reserved the right of admission, noting that even though its more than 6,500 members are free to invite guests, its by-laws prohibit admission of non-members who are not in reciprocating clubs.

The club said an earlier incident in October 2022, where the lawyer was also denied entry but later allowed in, informed their decision.

Mr Kipkorir said he was treated ‘like a stray dog, a homeless hound that had trespassed on the hallowed grounds of the privileged elite’. A Nairobi court agreed with the lawyer’s arguments and awarded him Sh1 million in damages.

With strictly enforced laws and an old guard not willing to depart from the traditional way of doing things, younger Kenyans in the private clubs ecosystem have sometimes been dismissed as lowering the standards. A former chairman of a private club who spoke with Nation Lifestyle held this view, though he did not wish to share his remarks on record.

We spoke to Jessy Ndegwa, the chairman of the Ruiru Sports Club, and asked him: ‘Is your club doing enough to attract younger members?’

He was candid enough to admit that there are no products targeting youth of 35 and below.

‘However, this being a family-oriented club, we have conversions from junior members to single members. And we have a lot of those. When you have a family [package], the club allows your children to transition to single membership after 25 years. So, what we have, we don’t let go of. We encourage them to graduate and take responsibility for their own membership,’ he says.

Graduating junior members to the senior category after the age of 25 is a common phenomenon in private member clubs across the country. The Wadi Degla clubs-Kenya, a recent entrant in the space, also considers 25 as the age when junior membership ends.

‘They will only pay a subscription [upon converting to single members]. They will not pay entry fees,’ says Mr Ndegwa.

To obtain family membership at the Ruiru club, one needs to pay Sh600,000. To become an individual member, on the other hand, one needs to pay Sh450,000. On top of the membership fee, a member of Ruiru Sports Club should pay an annual subscription fee of Sh24,000 for the family package and Sh16,000 for the individual package.

That isn’t too far from what other clubs charge. As per the last published rates online, the Royal Nairobi Golf Club that has been in existence since 1906 charges a joining fee of Sh595,000 and an annual subscription of Sh61,460.

The Parklands Sports Club, which will be 120 years old next year, charges a full member admission fee of Sh775,000.

The United Kenya Club, on the other hand, charges Sh150,000 to admit a member living in the city, with a Sh20,000 annual subscription required.

Asked whether the fees are too high to discourage younger Kenyans, Mr Ndegwa says: ‘True and not true.’

He notes that besides the option of juniors graduating to full members after their 25th birthdays, there are occasional membership discounts that prospective signees can grab.

‘Sometimes we have [recruitment] drives. So, for those who want to join and they do not have resources right now, I encourage them to keep looking out for when we have drives. And during drives, sometimes we give up to 50 percent of the classes that we present to potential members,’ he says.

A top contributor to younger Kenyans joining private clubs is the fact that some corporates have been buying membership for some of their staff.

Mr Okatch, who is a marketer by profession, joined his first club because his employer paid for it.

‘The aim then was for me to meet people who matter in business circles. In the club, there was encouragement for me to play golf as my children were busy enjoying swimming and other things,’ he says.

The United Kenya Club, where he is a director, has a package for corporate membership where a company can pay Sh650,000 to admit up to five employees. This is followed by an annual subscription of Sh100,000 for the members.

The thinking behind some employers getting their staff in such clubs, he says, is to give them access to potential clients.

‘It’s not to sell your product, but to meet the who-is-who. It opens ways for you to get into the marketing field,’ argues Mr Okatch. ‘Corporate organisations can pay for their members up to Sh1 million.because you meet those who matter.’

Dr Mike Iravo, a specialist in human resources management and a lecturer at the Jomo Kenyatta University of Agriculture and Technology, says there are many benefits that an employer gets from buying club membership for an employee.

He adds that such an arrangement can improve “productivity, motivation, among many other things that an individual employee would benefit [from]’.

Asked what portion among the 2,800 members of Ruiru Sports Club were brought in by corporates, Mr Ndegwa says there is less than five percent. He attributes this to the fact that Ruiru has not been widely known.

‘Ruiru, until recently, was not known in the circles of clubs. The clubs that were known were Muthaiga, Karen, Limuru, and Sigona,’ he says, noting that the club – which sits on 235 acres of land – is currently on a rapid expansion drive, driven by a 45-year masterplan.

The benefit a corporate gets by buying club membership for staff, Mr Ndegwa says, is that it gets ready buyers.

‘Being a member, knowing that you are going to interact with these people day in, day out, every other week, gives you an opportunity for people whom you would not have spoken to if you met in the streets just like that. But in the evening here, if you join a table, you join as a member and it is very easy to start a conversation. And they already trust you and you already trust each other,’ says Mr Ndegwa.

The World Bank Group has linked entrenched market dominance and weak competition in sectors such as electricity, telecommunications and fertiliser distribution to stagnating investments and expansion of formal jobs in Kenya.

The multilateral lender said in a report that domination by a few powerful players in the key economic sectors is raising business costs, suppressing investments and constraining expansion of firms that drive formal employment.

The World Bank’s latest Kenya Economic Update unveiled Monday lists Safaricom in telecommunications and Kenya Power in electricity distribution among firms operating under weak competition policies.

Kenya Power, the report states, retains a near-monopoly over electricity distribution and influences tariffs and reliability of energy.

This translates into high prices, limited alternatives, and slow efficiency gains, which curb growth in investments in labour-intensive sectors such as manufacturing.

Manufacturers- who have one of the biggest potential to generate large volumes of formal jobs- have over the years partly blamed high cost of electricity as a barrier to scaling operations.

Safaricom’s tight grip on mobile money and data services, the World Bank’s report suggests, has shaped pricing and market access in ways that smaller digital players struggle to overcome.

The lender says that Safaricom’s mobile broadband prices for monthly bundles, for example, are higher than those of its competitors in Kenya and in key regional markets such as Ghana, Nigeria, Rwanda and Zambia.

These distortions, the report goes on, are feeding directly into Kenya’s shrinking share of formal jobs.

‘Kenya has the foundations of a strong economy but unlocking its full potential requires reducing distortions, further opening markets and ensuring that policy frameworks are transparent, predictable and grounded in evidence,’ World Bank Country Director Qimiao Fan said during the launch of the Kenya Economic Update.

Citing data from the Kenya National Bureau of Statistics, the report shows that despite Kenya creating 782,000 jobs in 2024, nearly nine of 10 jobs created were informal. The share of Kenya’s formal employment has fallen from 18.5 percent in 2010 to 15.5 percent in 2024, a trend the bank attributes partly to weak competition that raises input costs and limits firm growth.

The report identifies Kenya as having the most restrictive product market regulations among all countries with available global data, with an overall Product Market Regulation (PMR) score of 2.92.

This poor scoring – driven by firms operating behind protective barriers rather than earning market share through efficiency, innovation, or better products – has stifled private investment, limited new entries, and slowed formal job creation.

The result is an economy where the informal sector – characterised by low-productivity activities with limited earnings, security and prospects for growth – dominates job creation.

‘When you have competition, prices go down and Kenyans can buy more for their money. And that means more demand for goods and services which means more jobs within the economy,’ World Bank economist for finance competitiveness and investments Ryan Kuo said.

Mr Kuo added that competition also improves productivity, enabling firms to generate more value per worker and pay higher wages.

‘When competition is fair and vigorous, it means firms are always trying to improve their productivity. The net effect is that average wages go up,’ he said.

Kenya, the economist said, has unusually high gross operating surpluses – higher than in competitive advanced economies – indicating that dominant firms in Kenya could be charging above-cost prices due to low competitive pressure.

The report cites the State-funded fertiliser subsidy programme – which relies on a narrow distribution chain controlled by leading suppliers Yara and ETG – has created geographic distortions, reduced availability of high-demand blends and locked out many private players.

The weak competition in the subsidised input market, the World Bank says, has suppressed agricultural productivity, thereby slowing growth in formal jobs in agri-processing, logistics and retail sectors.

Kenya’s transport sector, on the other hand, suffers from opaque licensing, regulatory fragmentation and barriers to market entry, raising logistics costs which hurt margins for manufacturers and exporters.

Albert Mwenda, the director-general for budget, fiscal and economic affairs at the Treasury, said that Kenya’s dominant micro and small-sized enterprises have made it difficult to enforce competition policies because they ‘fear formalisation’ and prefer to operate outside structures where competition policy can reach them.

‘Competition works well if there are more people working in the formal economy. Competition policy will be effectively implemented if we have more people working in the formal economy,’ Mr Mwenda said. ‘We have a challenge especially in the informal sector – the MSMEs – where the experience we have seen, through the credit guaranteed scheme, is that there is a fear of formalising operations.’

Competition Authority of Kenya (CAK) director-general David Kemei said in a speech that the agency was widening its focus beyond enforcement to advocacy in collaboration with other regulators.

‘Pro-competitive reforms have the power to unlock growth by removing unnecessary barriers and improving market access,’ Mr Kemei said in a speech read by CAK’s director for competition and consumer protection, Amenya Omari.

‘Businesses already have enough hurdles to jump towards success, so we collectively have a duty to reduce legal and policy issues that increase chances of failure rather than success.’

Betty Maina, the East Africa director at Genesis Analytics and a former Trade Cabinet Secretary, cited a lack of a strong consumer constituency to counterbalance large firms, represented by powerful industry groups such Kenya Association of Manufacturers (KAM) and Kenya Private Sector Alliance (Kepsa) as a challenge in enforcing competition policies.

‘Without a strong consumer body, it is difficult to manage those conversations on competition when they confront strong bodies like the KAM,’ Ms Maina said.

When one steps back and observes the collapse of the Nairobi Bus Rapid Transit (BRT) deal, originally worth Sh7.76 billion and backed by the United States through the Millennium Challenge Corporation (MCC), it becomes painfully clear: President Donald Trump has not only undermined Kenya’s development ambitions but also dealt a heavy blow to the trust between Nairobi and Washington.

The abrupt cancellation of this funding represents more than a policy shift; it is an affront to Kenya’s sovereignty and its people’s aspirations.

The agreement, signed under Trump’s predecessor, was hailed as a milestone in Kenya-US relations.

Through the MCC, the US had pledged to support the development of a modern BRT system for Nairobi, a project envisioned to unclog the city’s notorious traffic, reduce pollution, enhance safety, and provide a more equitable transport option for women, low-income commuters, and marginalized groups.

Kenya had already committed significant resources of its own, demonstrating genuine partnership and ownership of the initiative.

Then came the reversal.

When the Trump administration cancelled the MCC Threshold Program as part of its foreign-aid review, the BRT project was abruptly thrown into uncertainty. Kenya’s Treasury confirmed receiving the termination notice, leaving a carefully negotiated, legally binding project in limbo.

Such a sudden withdrawal is not merely bureaucratic reshuffling; it is a profound injustice.

Why is it unjust? First, because Kenya loses most. Nairobi’s transport crisis is not a theoretical concern; it affects millions of people every day. Congestion drains productivity, worsens air quality, and makes commuting a daily struggle.

The BRT system was not just an infrastructure upgrade; it was a lifeline for a city desperate for modern transit. When the US backed out, it was ordinary Kenyans who paid the price in lost opportunity and prolonged hardship.

Second, the move reflects a troubling lack of commitment. International partnerships depend on predictability. When a change of government in Washington can instantly nullify agreements signed in good faith, developing countries are left exposed.

This unpredictability weakens Kenya’s long-term planning capacity and discourages the kind of transformative projects needed to push the country forward.

Third, it damages US credibility on the world stage. For decades, America positioned itself as a development partner that honors its commitments and supports governance reforms through reliable assistance.

By abandoning the BRT deal, the Trump administration signaled that US development partnerships are conditional not on mutual goals but on domestic political whims. That makes it difficult for Kenya or any country to trust the U.S. with ambitious, multi-year projects.

This is precisely why Kenya and many other nations have increasingly turned to China for infrastructure. It is not because China offers the cheapest or simplest deals, but because it offers certainty.

When China commits to build a road, a railway, a port, or an energy installation, it rarely reverses course due to leadership changes or shifting domestic priorities. Western governments often criticize Beijing’s approach, citing concerns over debt or geopolitical influence, but from the perspective of developing nations, reliability is priceless.

Kenya cannot afford to wait endlessly for partners whose policies shift every four years. It needs roads, energy grids, railways, ports, and modern public transit – and it needs them delivered without sudden cancellations. When the US tears up agreements, China naturally steps in to fill the vacuum. The BRT saga is simply another example of a broader trend: countries gravitate toward consistent partners.

Trump’s decision to halt other USAid contracts in Kenya – affecting sectors such as education, energy, and civic engagement – only strengthens this perception.

Cuts totaling tens of billions of shillings in development commitments weaken vital sectors and leave long-term projects stranded. These abrupt contractions send a clear message: American support is not guaranteed.

Some may argue that every administration has the right to review foreign aid and reallocate funds. That is true. But renegotiation is different from abandonment.

When deals are terminated without meaningful consultation, without transition plans, and without regard for the people affected, it shows disrespect. It suggests that Kenya’s development priorities can be dismissed at the stroke of a pen.

Kenya is not simply a recipient of aid; it is a strategic partner with clear development ambitions. By signing the MCC compact, Nairobi demonstrated faith in long-term cooperation with the US The cancellation of the deal undermines that faith.

The MCC was designed to support countries committed to reform and good governance. Kenya met those conditions. America did not meet its own.

In the broader geopolitical picture, Trump’s actions reveal a failure of US soft power. Development diplomacy is not about rhetoric; it is about delivering real infrastructure and helping partner nations achieve tangible progress. When America falters, others rise to the occasion.

Ultimately, the scrapping of the Sh7.76 billion BRT deal is not only a broken promise – it is an injustice to Kenya’s development agenda and a betrayal of Nairobi’s commuters who deserve better.

It weakens trust, undermines collaboration, and accelerates Kenya’s pivot toward partners who offer more consistent engagement. If the United States wants to remain relevant in Africa, it must learn that reliability, not rhetoric, is the foundation of meaningful partnership.

My last visit to Addis was in 2023. But what I found in my latest visit jolted me. The face of this city has been completely changed lately. A flashback may help to challenge us to be bolder in pushing to improve our urban spaces.

When I first visited this city in 2006, there was not much to admire, save for some scattered high rise buildings. Its growth seemed embryonic, with pockets of mundane rural houses scattered at different places.

There were expansive zones with temporary dwelling units too, you could call them informal, though not as densely populated as in the Kenya sense.

But over a time, I began to notice a rapid increase of high-rise buildings within the city centre and its environs. Construction was continuous. Gradually, the rural zones within the city gave way.

And the informal settlements too. It was like there were clinical interventions to ‘pluck them out’. I am yet to really know where the people affected were taken to. Given that land in Ethiopia belongs to government, moving such people out is never quite a problem. Nothing like we face while trying to move people in our urban areas.

By the end of 2015, the Addis Ababa city light rail system was launched. It took a few years to build, yet traversed heavily developed parts of the city. Those mega compensation issues that would have obstructed construction Kenyan cities in weren’t on the table.

Yet, right now, Nairobi city would do with such a system, and many towns in Kenya should have road constructed bypasses. Slow traffic will continue to constrain urban movement and undermine urban economies if we do not figure out how best to open up transport corridors and provide for rapid and mass movement of urban workers.

What currently strikes visitors to Addis Ababa is the city’s Corridor Development Project, now into its third year of implementation. It has focused on improving urban mobility and quality of life.

This project is transformative and has involved the redesign of streets and public spaces, beautification and the repainting of buildings. It has gradually changed the face of Addis Ababa, lifting it above that of many other African cities that I have toured. It has involved road widening, the construction of walkways, bicycle lanes and comprehensive street lighting.

The project has delivered public seating spaces, street art, recreation areas and beautiful green spaces too. There’s been riverside infrastructure, greening and lighting. All buildings have had to be repainted in uniform white and grey.

Addis Ababa is alive and pleasant. One walks easily, and can find decent comfortable seating spaces. Street lighting works and gives the city a happy and pleasant landscape at night.

The redesign and construction has involved planning, resistance and costs. But it’s been done. Our urban managers have hard lessons to learn from Addis Ababa City Administration.

Pension funds nearly doubled their exposure to alternative investments such as private equity (PE) funds, offshore assets and real estate investment trusts in the year to June 2025, as they sought to diversify their portfolios to bring in high growth assets.

An industry report by the Retirement Benefits Authority (RBA) for the half year ending June, shows that the investment in these assets rose by 91.8 percent to Sh126.6 billion in June 2025, from Sh66.01 billion in June 2024.

Offshore assets account for the largest share of alternative investments for the schemes at Sh84 billion, having grown by 115.2 percent from Sh39.04 billion in June 2024.

The growth was bolstered by the stable shilling against the dollar, which protected the external assets from valuation losses.

PE investments grew by 129.2 percent to Sh20.1 billion, driven by funds seeking high returns, while the value of Reits investments was up 14.2 percent to Sh12.7 billion.

Other alternative assets held by the pension funds include commercial paper-whose outstanding value grew by 62.3 percent to Sh5 billion and unquoted shares which grew by 14.2 percent to Sh4.5 billion. Smaller assets, which are referred to as ‘other assets’ by the RBA, grew five-fold to Sh300 million, from Sh60 million in June 2024.

‘Alternative assets offer schemes avenues for diversification. Although uptake has been slow over the years, there was a noticeable increase in activity across some classes between June 2024 and June 2025,’ said the RBA in the industry report.

‘The significant uptick in offshore investments and private equity, reflects a strong shift toward high-growth opportunities. The drastic growth in the ‘other assets’ category was mainly driven by investments in Shariah-compliant funds, which have received increased interest from schemes.’

However, despite the growing popularity of the alternative investments, pension funds remain highly exposed to traditional assets such as government bonds, guaranteed funds, listed equities and property, which offer both a guarantee of long term low risk and stable returns for their savers.

By the end of June, the investments in these traditional assets accounted for 94.2 percent of the sector’s total assets of Sh2.53 trillion, led by government securities at Sh1.33 trillion, guaranteed funds at Sh495.9 billion, listed shares at Sh255.2 billion and property at Sh235.6 billion.

Other traditional asset allocations include fixed deposits at Sh64 billion, cash at Sh20.3 billion and listed corporate bonds at Sh3.8 billion.

Overall, the sector’s total assets grew by 27.9 percent fromSh1.98 trillion over the one year period.

The RBA attributed the growth in assets to a stable macro-economic environment, pointing to a mix of a stable exchange rate, favourable interest rates, and mild inflationary pressure.

Bonds and shares saw significant capital gains in the period, helping boost the value of portfolios even as the funds accessed higher inflows from members thanks to higher deductions towards the National Social Security Fund (NSSF).

The third-year implementation of the NSSF Act, 2013, which saw the lower limit contribution go up to Sh8,000 and the upper limit to Sh72,000 also boosted the cash available to schemes for investment.

By the end of June, the NSSF held assets worth Sh558.07 billion, up from Sh402 billion in June 2024.

Out of these assets, Sh517.96 billion is externally overseen by private fund managers on behalf of NSSF, while Sh40.11 billion is internally managed by the State controlled fund.

Kenya’s top eight commercial banks saw their lending margins widen by Sh24.2 billion in the nine months to September, as they cut returns to depositors at a faster pace compared to reduction in the cost of loans.

The lending margins of the banks, including KCB Bank Kenya and Equity Bank Kenya, rose to Sh149.7 billion in the review period compared to Sh125.5 billion a year earlier, according to analysis of the results published so far.

Depositors saw their interest income drop by Sh42.7 billion or 25.2 percent to Sh126.7 billion despite increasing their savings by Sh152.8 billion to Sh4 trillion.

The interest income from loans meanwhile fell at a slower pace of 6.3 percent or Sh18.5 billion to Sh276.5 billion, allowing the banks to expand their lending margins in absolute and percentage terms.

Their loans in the review period rose by Sh159.8 billion to Sh2.88 trillion.

The growth in net interest income shows that depositors have been squeezed more while borrowers have not gained a proportionate benefit from the central bank’s policy to lower interest rates in the economy.

Faced with reduced competition from other asset classes such as short-term Treasury bills -whose returns have halved to below eight percent- banks have been able to cut returns paid to depositors more aggressively.

‘Despite reducing interest rates for customers, the yields have improved significantly because of the cost of funds. So, when the government decided to lower its borrowing rates from 17 percent to currently in the regions of 10 percent the cost of funds went down and net interest margin has driven Kenya,’ said Equity Group chief executive James Mwangi during the bank’s investor briefing at the end of October.

‘As rates came down, we passed that to the customers and reduced loans by 300 basis points, so income has only grown by 3.0 percent. But interest expense has gone down by 21 percent, giving us a 16 percent growth in net interest margin from Sh80 billion to Sh93 billion,’ he added.

Data from the Central Bank of Kenya (CBK) shows that the banking sector’s average deposit rate dropped to 7.63 percent in September 2025 from 11.24 percent a year earlier.

The sector’s average lending rate on the other hand declined marginally to 15.07 percent from 16.91 percent in September 2024.

The growth in lending margins has helped the large banks to report higher earnings in the nine months to September.

Equity Bank Kenya’s net profit grew 51.2 percent to Sh31 billion in the review period as interest margin widened to 8.1 percent from 6.6 percent.

KCB Bank Kenya reported a 6.4 percent profit growth to Sh33.7 billion, supported by its interest margin widening to 7.1 percent from 6.5 percent.

KCB and Co-operative Bank of Kenya were the only large banks to record growth in interest income. KCB recorded a 17 percent expansion of its loan book while other banks saw their lending to the private sector shrink, signalling a difficult business environment.

‘Total revenue grew by five percent supported by 12 percent growth in net interest income on the back of a drop in interest expense,’ said the group’s chief executive, Paul Russo, in a note to investors.

Stanbic Bank recorded the widest drop in the cost of funds of 48 percent, which helped it absorb a 24 percent slump in interest income.

NCBA Bank Kenya recorded a 45.5 percent drop in interest expenses compared to a 16.4 percent decline in interest income. NCBA said it had been rejecting expensive deposits which saw customer savings held in its vaults drop by Sh31.4 billion.

The CBK has been pressuring banks to lower their interest rates to spur private sector lending in a bid to support economic growth.

The CBK’s monetary policy-making committee has in the past nine consecutive meetings cut its base rate to 9.25 percent from 13 percent in June 2024.

Besides rate cuts, it has also reduced the cash banks are required to hold as reserves with the regulator so as to increase liquidity and increase lending to the private sector.

Banks have, however, been slow to pass the benefits of reduced cost of funds and a lighter cash requirement, drawing rebuke from the CBK which has told them to stop giving excuses and lower lending rates.

The regulator is also banking on a new loan pricing formula, which takes effect starting next month, to see banks transmit rate cuts by the monetary policy to the public in full and promptly.

Some of the hurdles, cited by banks, to cutting interest rates on loans include different base lending rates and the poor development of the risk-based pricing framework.

Commercial banks are expected to adopt a new industry loan-pricing standard dubbed the Kenya Shilling Overnight Interbank Average (Kesonia), which is hooked to the rate banks lend to each other.

Banks have used the wider interest margins to protect their profit levels, which are under threat from slow credit growth, loan defaults and a dip in forex income.

The lenders were emboldened to reject expensive deposits as they were not growing their loan books. Taking cash out of banks to invest in Treasury bills also became less attractive for cash-rich individuals and companies as the returns on the sovereign debt declined.

Slow lending has seen banks hold record cash levels, with average liquidity ratio rising to 59.8 percent at the end of August, up from 54.4 percent a year earlier.

This is the highest liquidity ratio recorded for the industry and is against a regulatory requirement of 20 percent.

The liquidity ratio -which captures the amount of cash or near-cash assets held by banks in comparison to their short term deposits- reflects how efficiently a bank is deploying customer savings to make profits.

A new requirement for importers to provide certificates of origin could clog the port without catching rogue traders who undervalue goods to pay low taxes, the Parliamentary Budget Office (PBO) has warned.

PBO notes that while making it mandatory for importers to have the document before goods can be processed by customs offers assurance on where that have been sourced, the government has not proved how the requirement will curb undervaluation.

In the Finance Act, 2025, the government amended the Tax Procedures Act making it mandatory for importers to have certificates of origin issued by a competent authority in the exporting country and now the Kenya Revenue Authority (KRA) must first verify the document before processing imports.

Enforcement of the certificates of origin commenced in October.

‘The mandatory certificate of origin requirement is designed to curb undervaluation and improve customs compliance, but its success will depend heavily on enforcement. If poorly managed, it could create delays at ports and increase bureaucracy without solving the problem,’ the office says.

In a report analysing the government’s budget implementation for the current fiscal year, the PBO is calling on the government to keep an eye on customs clearance times to tell if the policy will affect efficiencies at the port.

The office also observes that to measure its impact, a growth in import duty collections will signify increased compliance among importers.

‘To measure its impact, it will be necessary to keep an eye on customs clearance times, which reflect efficiency. The share of consignments flagged for undervaluation will show if enforcement is improving,’ the PBO says.

KRA has for years concentrated on deployment of advanced scanning technologies at ports of entry to nab tax evaders, though the strategy has not been impactful in cargo valuation.

The PBO observes that resistance to policy changes and new technologies from stakeholders has been one of the main challenges for KRA, in dealing with undervaluation of imports.

Last year, Kenya imported goods valued Sh2.7 trillion, KNBS reported.

‘However, the accurate valuation of import cargo continues to face major challenges, primarily due to widespread undervaluation of goods. High-value commercial and excisable goods are often declared at artificially low values, making accurate valuation difficult and leading to substantial revenue losses,’ the PBO says.

The amendment gave KRA powers to seize goods that lack the certificate of origin.

The PBO reckons that the deeper challenge for the government lies in enforcing strict verification and ensuring that declared values truly reflect market realities, rather than merely asking for the certificate of origin.

‘The mere presence of a certificate of origin does not necessarily guarantee accurate cargo valuation, as importers may still declare lower values despite presenting the correct origin documentation,’ it says.

The office notes that the real challenge is for the government to address underlying issues such as resistance to new policies and technologies, potential corruption, or lack of proper compliance incentives.

‘It will be critical to observe whether this measure leads to an increase in revenue collection and effectively curbs revenue losses arising from undervaluation. Only time will tell if this legislative change solves the long-standing problems or simply reinforces existing challenges under a new legal framework,’ the PBO says.