Category: Business Daily

Africa holds 17 percent of the world’s people yet produces roughly four percent of global carbon dioxide. On a per-capita basis it emits about one tonne a year, the lowest of any continent.

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Africa also contains the world’s largest pocket of energy poverty. The question that matters is not whether to cut carbon, but how much temporary pollution is tolerable on the way to energy prosperity, and under what constraints.

Orthodoxy has split into two camps. One says ‘no fossils, ever’, a moral stance that collides with fragile grids and frequent blackouts. The other says ‘gas or nothing’, tidier for funders, but often impossible where gas infrastructure does not exist.

A better course is lean carbon: a minimal, time-limited overdraft of emissions to buy dependable power now, with covenants that force an early peak and a rapid decline. Think of it as carbon on credit, a capped facility, not a blank cheque.

The Environmental Kuznets Curve describes an upside-down U. Pollution rises at low incomes, then peaks and falls as countries grow richer and regulate more.

Africa can peak lower and earlier than historic industrialisers because renewables are cheaper, technology has improved and coal can be avoided.

The policy aim is to flatten the hump: accept a small bump now to reach the downhill sooner.

Today’s counterfactual is not a continent powered neatly by wind and sun. It is millions of diesel generators humming in courtyards and factories because the grid is unreliable.

Studies suggest self-generation already equals about six percent of installed capacity in sub-Saharan Africa, at a punishing 0.30 to 0.70 dollars per kWh, several times typical grid tariffs.

When utilities falter, governments lease emergency diesel in bulk. In some cases these contracts have cost three to four percent of gross domestic product (GDP). A clean sentence in a strategy does not change the physics of a failing system.

Intermittent renewables alone cannot yet stabilise a weak grid at scale. They need firm capacity, storage, or both. The sensible choice is planned, efficient firm power that complements solar and wind, rather than the messy reality of unplanned, dirtier backup.

If fossil molecules must feature, natural gas is preferable to oil products: fewer local pollutants and roughly half the carbon of coal per kWh.

But gas-only is a mirage in much of Africa because pipes and liquefied natural gas are scarce and markets are small. Outside a few corridors there are only a handful of regional gas arteries, notably the West African Gas Pipeline from Nigeria to Ghana and the line from Mozambique to South Africa. Grand schemes to extend them have moved slowly.

Most countries lack the demand density to finance pipelines or import terminals. Insisting on gas everywhere, now, often means no power at all.

A credible lean-carbon pathway is neither all-renewables tomorrow nor gas for ever. It has three moving parts.

Power plants that can switch fuels: New power stations should be able to start running right away-using heavy fuel oil or diesel if needed-but be built so they can easily switch to natural gas when supplies become available. This avoids blackouts today without locking countries into oil and gas for decades.

Modern reciprocating engines can start and stop quickly, making them ideal substitutes for solar and wind power when the sun isn’t shining or the wind isn’t blowing.

Fossil fuel use that drops over time: Fossil fuels should be relied upon only when necessary, shifting focus to using them for system stability and renewable-scarce periods.

If they are the only means of electricity generation, we should systematically seek to decarbonise them. That way, emissions per unit of GDP fall fast, even before absolute emissions peak. The first target is to displace diesel generators, the dirtiest and costliest kilowatt-hours on the continent.

Covenants that bind: To make sure the ‘carbon overdraft’ stays small and temporary, it needs hard limits.

These include deadlines for switching to cleaner fuels, limits on total emissions, and power purchase agreements that reduce payments to conventional plants as renewables and storage grow.

The focus should be on financing the whole energy system – renewables, backup power, and better transmission lines – not just individual plants.

Africa does not seek permission to pollute. It seeks permission to end energy poverty quickly while peaking emissions early. That is the lean-carbon bargain: a small, declining hump instead of a long, dirty plateau, and a faster route to the sunny side of the Kuznets curve.

The task for partners is to help keep the overdraft small, and to pay it back fast.

Funders are shifting, cautiously

Development financiers are moving from blanket bans to conditional support for transitional projects. A growing chorus argues that gas should form part of Africa’s just energy transition, provided it is integrated into national climate plans and structured to de-risk the shift to cleaner power.

The most useful money crowds in private capital to systems, not stand-alone assets. The priority is hybrids that cut diesel use immediately and accelerate renewables later.

Why the bump is acceptable

Two points matter for the climate ledger. First, Africa’s historical contribution is tiny. Sub-Saharan Africa excluding South Africa has emitted well under 1 percent of cumulative CO2 since the industrial revolution; including South Africa the region is still under 2 percent. Second, the opportunity cost of delay is enormous.

Energy-starved economies grow slower, which makes the clean transition harder to finance. A modest, time-boxed rise to something like a 5 percent share of global CO2 as grids stabilise would still leave Africa’s burden small by world standards, especially if the uptick displaces diesel and comes with a dated plan to fall.

Risks, spelled out and mitigated

The obvious risk is lock-in: today’s bridge becomes tomorrow’s motorway. That is why the contract matters. Write conversion deadlines and decommissioning triggers into PPAs.

Require modular plants whose value survives a fuel switch. Publish transparent emissions dashboards. Include stop-loss clauses if milestones slip.

Another risk is cheap-today myopia, choosing the lowest upfront tariff and ignoring reliability, ramping and integration costs. The remedy is to procure systems and judge bids on whole-system cost and carbon, not just cents per kWh.

One final objection is to wait for cheaper batteries. Storage costs are falling and Africa should adopt them early. But telling a low-income country to wait five years for round-the-clock electrons is not climate policy; it is development deferred. High costs of capital already hobble clean projects.

Suppressing growth makes those costs worse. Better to grow with discipline, shrink diesel immediately, and use rising demand to make gas and storage bankable, then retire the fossils on schedule.

The ask

For energy ministries and regulators: publish peak-and-pivot plans that show when emissions will crest and what will force them down. Bake overdraft covenants into every firm-power tender. Allow dual-fuel where necessary, but mandate gas-ready design, switch-by dates and emissions-intensity floors.

For development financiers and multilaterals: fund hybrids and grids, not single-fuel bets. Reward early conversion and managed retirement. Deploy guarantees to cut the cost of capital for storage and transmission.

For developers and independent power producers: bid least-carbon firm power, not cheap today and stuck tomorrow.

‘When everyone in the world sees beauty, then ugly exists. When everyone sees good, then bad exists. What is and what is not create each other. Difficult and easy complement each other,’ wrote Lao Tzu, more than 2,300 years ago.

Is it a business risk to see the world in black and white? Has the bedrock of thinking about business strategy radically shifted? Why do traditional brick and mortar companies often struggle?

Have the once clearly defined boundaries between industries faded? What business is Safaricom really in – is it financial services, voice and data, retailing, or entertainment ? Is the problem ‘dwindling market fortunes’ or how senior management thinks about the business they are in?

Yin and yang – not black and white

In business, as in life, we tend to think in opposites. One would not exist, without the other. Light or dark, high or low, hot or cold, smart or stupid. That’s how we make sense of the world, trying to understand how things work.

But in making judgements, calling one opposite good and the other bad, perhaps we are missing something. Is there another way of looking at things.

One quality depends and complements the other. In business, even when one element seems obviously better, it’s unwise to neglect the other. Same is true in business strategic thinking. Strategy, and ‘not strategy’ .

Ancient roots

Is strategy a new idea? Strategy can be looked at both on a ‘long view’ going back more than 2,000 years, from ancient and Biblical times to more recent thinking about business strategy from 1920.

Much of business strategy has been influenced by military strategy, dating back to, for instance, Alexander the Great in 333 BC. When a 23 year old Alexander, with an army of 50,000, defeated Darius with his 1 million troops.

What has been the bedrock of thinking about business strategy, from say 1985 onward? Does it still apply in 2025?

Michael Porter’s frameworks – industry five forces, value chain, generic strategies of cost leadership, niche, and differentiation- shaped 20th-century strategic thinking. They are designed for linear, product-based firms in stable industries.

Porter’s training was in industrial economics. For instance, the five forces framework looks at the profitability of industries, say pharmaceuticals versus airlines. Goal of business is to create and capture value.

Taking a flight creates great value, yet airlines ability to capture that value in profits is difficult, even in the best of times due to high fixed costs and fuel price volatility. In contrast, the pharmaceutical industry is significantly more profitable than airlines, with much higher gross and net profit margins, in part due to high barriers to entry.

What industy are you in?

Problem is that today, boundaries between industries are blurring. For instance, what industry is Amazon, Google, Apple, Safaricom or Equity Group in? Boundaries of industry are disappearing. Plus, competition can be asymmetric, tiny smart David can defeat an over-confident Goliath.

Advances in technology created platforms

Business models rule. Today almost 60 percent of the largest companies globally are based on a platform business model. Thanks to technology’s processing speeds and memory, a platform has none of the traditional brick and mortar presence that businesses used to require, plus they don’t have an expensive inventory. A platform simply brings the buyer and seller together, thanks to a digital footprint.

‘Besides huge market capitalisation Alibaba, Alphabet (Google), Amazon, Apple, Facebook, Microsoft, and Tencent all have another thing in common: heavily populated platform business models. Platforms are the favoured operating model for seven of the world’s 12 largest corporations,’ notes McKinsey.

World beating platforms have a number of things in common. They are all software-based digital environments with open infrastructures, matchmakers linking people, organisations, and resources, orchestrators of ecosystems extending across sectors and national borders, reducing marginal costs to near zero, and harnessers of network effects.

Porter’s frameworks assume competition for value capture in a closed value chain. Platform strategy requires orchestration of value creation across open networks.

Competition is not based on features, rather more on the number of people on the platform – network effects.

Once competitive products – services can soon become commodities, that can be given away for almost free, for instance, WhatsApp, or Google Maps, or Khan Academy, providing world class education.

From PR hype to genuine rethink

Imagine Acacia Insurance, on the surface saying all the right things. Lot’s of public relations like hype ‘transforming devasting risk into financial stability’ but in practice the age old insurance company was struggling.

Having lost confidence in the former golf swinging CEO, the board installed yoga practicing, Sarah to inject a dose of imaginative thinking.

Sarah realised that going a step beyond banc assurance, the traditional lines in the provision of financial services had shifted.

Sarah looked out globally, seeing that many of the larger established financial institutions were floundering in this era of disruption as fintechs and nimble startups keep slicing off pieces of the financial services market. While old style thinking industry leaders scramble to adopt the same shiny technologies, Sarah saw they are missing the heart of the problem — the way business is being thought about.

By adapting a blend of the traditional linear business model and platform thinking, Acacia went on the blur the lines of what was possible.

Both in serving its more affluent customer base, it began focussing on financial inclusion, breaking into what was previously thought to be unprofitable markets.

Just as in a novel, in business, context is everything. Charles Dicken’s A Tale of Two Cities set in London and Paris, before and during, the French Revolution is a study in contrasts.

‘It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us.’

The Central Bank of Kenya (CBK) is seeking to raise Sh40 billion from two reopened bonds as it sticks to issuing papers with pre-determined returns to investors in its bid to prevent a spike in interest rates.

The apex bank has invited investor bids for reopened 15-year and 25-year bonds, which are set to sell at a premium as interest rates continue to move lower.

Investors are paying a premium to the par value of Sh100 to buy into bonds with high coupon rates as interest rates fall and prices increase.

Bond prices are usually on the rise in a low-interest-rate environment as returns on newly issued papers fall, forcing investors to pay more to hold higher-yielding securities.

The CBK has avoided issuing new bonds even as interest rates fall and has instead favoured reopened issues to avoid interest rate shocks.

Both the 15-year and 25-year bonds are trading at a premium in the Nairobi Securities Exchange secondary market, with the former recording a Sh101.71 premium in its last trading session.

Investors buying the two bonds face a further premium to cover accrued interest payments from the last coupon settlement.

The 15-year bond, which has 8.7 years to maturity, attracts an accrued interest of Sh4.2715 per Sh100 while the 25-year paper with 21.9 years to maturity attracts an accrued interest of Sh1.3642 per Sh100.

The premium on the two securities allows CBK to offset the differences in the papers’ price and par value without affecting the instruments’ coupon, which remains set to its primary or first issuance.

The two papers will remain on sale until Wednesday next week, while successful bidders will be notified of their payment key and amount payable on Friday, November 21. Proceeds from the dual-bond sale will be channelled towards budget support.

The government remains on course to meet its domestic borrowing requirement from the sale of Treasury instruments in the 2025/26 fiscal cycle, supported in large part by declining interest rates.

Falling rates have forced investors to pile into government securities in anticipation that future sales of Treasury bills and bonds could result in relatively lower returns.

Cuts to the benchmark interest rates by the CBK have induced the lower interest rates on government securities.

The government’s net domestic borrowing target for the fiscal year running to June 2026 stands at Sh613.5 billion.

The target for domestic borrowing is lower than the estimated Sh854.5 billion which partially covered the budget deficit in the previous fiscal year to June 2025.

When you sit in front of a lie detector machine, you quickly realise how easy it is to tell fact from fiction. The machine, which is pre-loaded with questions from the one seeking the truth from you, confronts you with the gusto of a lawyer cross-examining someone in court.

You barely have time to reply ‘true’ or ‘false’ before another question lands. As your brain struggles to align, you are pummelled with the same question you answered some minutes ago, but the wording is tweaked.

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Many are the instances when employees resign from work out of frustration but without knowing whether they have any legal recourse for the circumstance leading to their resignation.

In fact, many employees are wrongly made to believe that once they have initiated their resignation, all their claims against the employer are null.

On the contrary, the law recognises that there are special circumstances that may push an employee to resign without intending, what it refers to as constructive dismissal or termination.

Simply put, constructive dismissal occurs when an employer makes an employee’s work conditions so intolerable that the employee is left with no choice but to resign.

The employee resigns in response to the employer’s conduct at which point the employee is entitled to treat him or herself as having been ‘dismissed’, and the employer’s conduct is often referred to as a ‘repudiatory breach’.

Unlike the traditional dismissal, where the employer directly terminates the employment, constructive dismissal is initiated by employees who feel they have no choice but to resign due to the employer’s actions.

This circumstance often arise where an employer wishes to terminate an employee but elects not to. The employer then takes actions that make the employee so uncomfortable that he or she eventually quits believing oneself to have been terminated.

These actions may include demotion, stripping the employee of important duties, withholding salaries, assigning an employee duty out of the scope of their competence, unilaterally changing terms of employment or creating a hostile or punishing environment.

To establish constructive discharge, the former employee must show that a reasonable person would have resigned under the similar circumstances. For example, if a reasonable employee working under similar conditions would have tolerated the employer’s conduct, the resignation will be found unreasonable.

Likewise, if a reasonable person would have found the working conditions unendurable and would have resigned, the employee will be found to have been constructively discharged.

But it is not enough to show merely that an employer has behaved unreasonably. There must be a fundamental breach of either an express contractual term, or the implied term of trust and confidence.

Furthermore, an employee must have resigned because of the actual breach- not for some other reason. The employee should also make it clear through the resignation letter, reasons for the resignation which is a direct consequence of the employer’s conduct.

Note, however, that constructive termination does not have to arise from a series of events but may arise from one incident that goes to the root of the contract.

The incident can be interpretated as amounting to a repudiatory breach by the employer. Sometimes there is a continuing pattern of behaviour or incidents which, taken as a whole, amount to a breach even though they may not be in isolation. For example, there may be a history of discrimination and harassment. If there is a continuing pattern of behaviour, however, the last straw which leads an employee to resign should relate to the previous acts, so that added together they all amount to a clear breach of trust and confidence. It doesn’t matter if the final act by the employer is minor, as long as it is enough together with the previous series of incidents to amount to a fundamental breach.

In the case of Kenneth Kimani Mburu and Another v Kibe Muigai Holdings Limited, Nairobi ELRC Cause No. 339 of 2011, the court laid out the finer elements of constructive termination which includes; ‘The employer being in breach of the contract of employment, the breach must be fundamental as to be considered a repudiatory breach, the employee must resign in response to that breach and the employee must not delay in resigning after the breach has taken place, otherwise courts may find the breach waived.’

Employees who intend to lodge a claim for constructive termination must be careful not to appear to have waived any breach by the employer.

The waiver may be construed when an employee takes far too long to make a decision to resign from work once aware of the breach.

A waiver could also arise if an employee does something which signals an acceptance of the breach, for example, by sending an email stating that they are happy with arbitrary changes to their contract or if in the resignation letter an employee indicates that they are grateful and happy to have served the employer and they would be willing to take up future roles should an opening arise.

To prove constructive dismissal, an employee has to show that the employer created working conditions that were so intolerable that a reasonable person would have no option but to quit.

In a constructive termination claim, an employee has to prove that the job conditions were intolerable, repeated, and aggravating enough that there was no option but to quit.

However, bad working conditions are not always enough to prove unfair dismissal. Instead, the employer creates or permits an intolerable working environment.

This generally involves making significant changes to terms of engagement that create a continuing pattern of bad working conditions.

There are various protection that the law affords employees against unfair labour practices or bad working conditions. For instance, both the Constitution and the Employment Act provide that employers cannot discriminate against employees on the basis of a protected ground.

The protected grounds include freedom from discrimination based on age, sex, race, religion, and other types of discrimination that may lead to an employee opting to resign.

Further, employees are also protected against unlawful retaliation. Whistleblower laws protect employees who are constructively dismissed. This includes employees who report illegal activity, sexual harassment, workplace discrimination, or worker safety violations.

SBM Bank Kenya has posted a Sh283.41 million net profit for the nine months ended September 2025, marking a turnaround from a Sh1.34 billion net loss posted by the lender in a corresponding period last year.

SBM’s latest financial disclosures show that net interest income during the period rose 95.5 percent to Sh2.76 billion up from Sh1.41 billion last year, while non-interest income grew 29.8 percent to Sh1.54 billion from Sh1.19 billion.

The income growth elevated the bank’s earnings as it marginally lowered its operating expenses to Sh3.89 billion from Sh3.94 billion in a similar period last year. The lender’s staff costs during the nine-month period remained unchanged at Sh1.75 billion, while provision for bad debts rose 63.6 percent to Sh235.4 million up from Sh143.9 million.

‘Our performance reflects the disciplined execution of our turnaround strategy and the power of customer-led innovation. Through smarter digital platforms, relevant products, and strong partnerships, we are delivering a bold, secure, and modern banking experience,’ said SBM Bank Kenya CEO Bhartesh Shah.

We remain committed to driving inclusive financial growth and becoming Kenya’s preferred payments and savings bank.’

The profit return comes as a boost to a bank that spent the whole of last year in the red, closing with a net loss of Sh1.07 billion in a period its parent company SBM Holdings injected fresh capital worth Sh471 million.

Last year’s loss was mainly driven by a decrease in net interest income to Sh2.15 billion from Sh3.81 billion due to interest expenses rising at a faster pace than interest income.

SBM Holdings entered Kenya in May 2017 through the acquisition of Fidelity Commercial Bank for a $1 (Sh129) consideration and renamed it SBM Bank Kenya before making a $20 million (Sh2.59 billion) capital injection.

The Mauritius-headquartered lender in August 2018 also acquired certain assets and liabilities of the then-under-receivership Chase Bank Kenya for 162,158 Mauritian rupees (about Sh456,000 at current exchange rate) and added them to SBM Bank Kenya. The group made a commitment to inject $60 million (Sh7.74 billion).

The lender has been shifting focus to the affluent and entrepreneurial segments through launch of new products and investing in digital platforms.

In addition, it has entered into several strategic collaborations with fintechs and ecosystem partners to enhance capabilities of its payment solutions.

The lender is carrying in its books an accumulated loss of Sh2.38 billion.

The court has ordered car dealer Toyota Kenya to pay its former staff Sh754,116 for using the wrong procedure to sack the employee for receiving a Sh20,000 gift.

The Employment and Labour Relations Court ruled that Toyota Kenya failed to give the employee, Mr CDO, adequate time to prepare for a disciplinary hearing, which triggered his dismissal.

However, the court upheld Toyota Kenya’s argument that he violated the company’s anti-bribery policy by accepting the Sh20,000 gift.

The court awarded him Sh754,116, equivalent to four months’ salary, as compensation for procedural flaws ahead of his sacking. He had sought Sh21.5 million in damages for wrongful termination, unpaid salaries, and allowances up to his retirement age.

‘The timing and sequence of transactions point to a clear link between the customer’s payment and the amount he received through his supervisee,’ said the presiding judge.

‘It is irrelevant whether the respondent referred to the money as a ‘gift’ or a ‘bribe’; what matters is that it contravened company policy.’

Mr CDO, who had worked as a service adviser since 2005, was accused of receiving Sh20,000 in June 2018 from a customer as a token of appreciation after repairs were completed on the client’s vehicle at Toyota Kenya’s Kampala Road body shop.

Investigations revealed that the customer had sent Sh60,000 via M-Pesa to one of Mr CDO’s subordinates, who then distributed the money among five employees involved in the repair work. Mr CDO received the largest share (Sh20,000), while two others got Sh15,000 each and two more received Sh5,000 each.

As a service adviser, his role included recommending necessary services and repairs for customers’ vehicles.

Toyota Kenya argued that he breached the company’s Code of Conduct and Staff Handbook, which prohibits employees from accepting gifts or benefits exceeding Sh5,000 from third parties, including customers.

Mr CDO denied wrongdoing, claiming the money was repayment of a personal loan from a junior colleague.

However, the court dismissed this explanation as implausible, noting the timing of the transaction.

The customer had accused the employee of soliciting money to expedite the repair work, alleging that he initially demanded Sh100,000 before settling for Sh60,000.

Despite upholding the misconduct finding, the court criticized Toyota Kenya’s dismissal process.

The court noted that on July 6, 2018 he was summoned to a disciplinary hearing although the letter was backdated to July 4. He was required to attend the hearing on the very day. This left him with no time to prepare or secure a witness.

“The claimant was ambushed, and the inadequate notice impaired his defense,” the court ruled, citing employment laws requiring fair notice and access to evidence.

The court also faulted the company for failing to provide Mr CDO with the investigation report beforehand and for keeping “scant” hearing minutes that obscured whether he was given a fair chance to defend himself.

“The court is satisfied that the respondent failed to adhere to the principles of procedural fairness in terminating the Claimant’s employment,” it ruled, adding that an employee is entitled to access documents in the employer’s possession that would assist them in preparing their defence.

While rejecting Mr CDO’s claim for future salaries, the court ordered Toyota Kenya to compensate him for the flawed termination and cover legal costs.

The ruling balanced fairness and policy enforcement, upholding Toyota Kenya’s right to enforce its anti-gift policy while emphasizing that procedural fairness is non-negotiable under Section 41 of the Employment Act.

“An employee facing serious allegations must be given sufficient time to prepare,” the judgement reiterated.

The ruling highlights Kenya’s labour laws requiring employers to balance disciplinary actions with fair procedures. Companies must ensure investigations are thorough, notices are timely, and employees are allowed proper representation even when misconduct seems clear-cut.

The World Bank has listed seven laws and four policy reforms it wants implemented before it can release a Sh96.9 billion ($750 million) loan to Kenya.

The multilateral lender reckons it will release the billions of shillings once Kenya amends its Competition Act to strengthen regulations that will control the operations of firms with dominant market shares.

It wants Kenya to allow refugees to register for mobile telephony services and M-Pesa and a policy that eases urban transport decongestion and pushes city dwellers to use rail and guidelines on sustainability bonds.

The World Bank made the revelations after the Treasury said it had issued fresh conditions to Kenya, delaying the disbursement of the loan that was expected before the end of June 2025.

The lender wants full use of e-procurement to curb graft in the purchase of goods and services in government, as well as for all government bank accounts to be housed at the Central Bank of Kenya (CBK) and not spread across commercial banks.

Discussions with the World Bank continue at a time when Kenya is also engaged with the International Monetary Fund (IMF) for a new funded programme to tap additional cheap financing.

The World Bank previously froze the disbursement after Kenya failed to pass key legislation preventing conflict of interest within the public service and enhancing social protections for vulnerable Kenyans.

Kenya has since met the demands after Parliament passed a new Conflict of Interest Bill and the Social Protection Bill, both of which are now Acts of Parliament after President William Ruto assented to the legislation.

Now, the World Bank says it wants regulations supporting the implementation of the two Acts ahead of the release of the billions of shillings.

‘Outstanding prior actions include further implementation of the Treasury Single Account (TSA) and e-Government Procurement, and a framework for faster approval of County Government Additional Allocations Bills,’ a World Bank Spokesperson told the Business Daily in emailed responses.

‘(Other prior actions include) regulations to the Conflict of Interest Act, regulations to the Social Protection Act, regulations to the County Licensing (Uniform Procedures Law), amendments to the Competition Act, updated Kenya Information and Communications Regulations, the urban transport policy, amendments to the Forest Conservation and Management Act and the sovereign sustainability-linked financing framework.’

The Conflict of Interest Act seeks to stop government officials with large private sector interests from continuing to influence and benefit from public procurement, while the social protection law obligates the national government and counties to create an enhanced single registry (ESR) to deliver cash transfers to the poor and vulnerable.

Kenya has also struggled to implement both the Treasury single account (TSA) and e-procurement, placing the World Bank DPO financing at risk.

World Bank officials have held meetings with Treasury Cabinet Secretary John Mbadi and National Assembly Speaker Moses Wetang’ula to hasten the fulfilment of the trigger actions to unlock the financing.

The multilateral lender says Kenya cannot renegotiate the facility, implying that the country must abide by the agreed conditions to unlock further funding or risk the cancellation of the three-year facility.

Kenya reached a three-year DPO financing pact with the World Bank in June last year, where the multilateral made an initial Sh155 billion ($1.2 billion) disbursement.

Subsequent releases from the instrument are tied to the attainment of the policy and institutional reforms.

Kenya has programmed to receive Sh170.5 billion from the World Bank’s development policy operation (DPO) in the current financial year, with a similar amount expected in the fiscal years to June 2030.

Increased reliance on the World Bank comes as financing from the IMF remains in limbo.

Kenya remains undecided on whether it needs a new funding programme from the IMF despite initiating discussions on a new deal.

Some officials prefer that Kenya remain without a new IMF programme to wean itself off the support of the fund as it eyes upper-middle income status.

‘I don’t think we have a meeting of minds internally on why we need it (the IMF programme),’ David Ndii, the chairperson of the President’s Council of Economic Advisors, said earlier.

‘In the long haul, our goal is to transition from a lower-middle-income to an upper-middle-income country. Part of that means being more market-facing than seeking multilateral financing.’

The Treasury has not budgeted for IMF financing, previously noting the need to manage expectations on the outcome of fresh discussions.

‘We are being very cautious because before you get into an arrangement with the IMF, you can’t start assuming that you will get funding. But it doesn’t mean that we are terminating our programme with the IMF,’ Mr Mbadi said previously.

The World Bank and the IMF are Kenya’s key sources of cheap financing outside of bilateral support.

Kenya has increased its borrowing from the pair in recent years as it seeks to avoid relatively costly credit from alternatives such as Eurobonds and syndicated loans.

This has enhanced the influence of the multilateral lenders on Kenya’s policy.

The World Bank is the bigger lender of the two, with outstanding loans of Sh1.66 trillion as at the end of September 2025.

Borrowings from the IMF meanwhile stand at Sh477.2 billion.

The government is seeking to diversify its sources of cheap financing, eyeing sustainability-linked bonds (SLBs) and debt for development swaps.

The World Bank is expected to support Kenya in issuing its first SLB in March next year, which has been estimated at Sh65 billion.

Kenya is set to establish three new embassies following Cabinet approval on Tuesday evening.

The embassies in Vatican City, Denmark and Vietnam mark a major step in strengthening the country’s diplomatic engagement and advancing what it described as global, moral, and development diplomacy.

In its meeting at State House, Nairobi, the Cabinet said the new embassy in Holy See will deepen Kenya’s bilateral relations with the Vatican, enhance cooperation on peace-building, climate action, and humanitarian work, and expand engagement with the Vatican’s vast network of faith-based institutions worldwide.

‘The establishment of the embassy will strengthen our engagement with Catholic development agencies that run more than 7,700 schools and 500 health facilities across Kenya,’ read part of the Cabinet brief.

The Vatican City, home to the Holy See and the seat of the Roman Catholic Church, plays a central role in international dialogue and development through its diplomatic, humanitarian, and interfaith influence.

The Cabinet noted that a resident mission in Vatican City will provide a vital platform for Kenya to leverage the Church’s extensive social and development infrastructure, particularly in education, health, and poverty alleviation.

The decision also reflects Kenya’s recognition of the Vatican’s global leadership in promoting peace, social justice, and human rights, areas where the Catholic Church has been an important partner in Kenya’s national development journey.

The embassies in Copenhagen, Denmark, and Hanoi, Vietnam are also part of a broader strategy to expand Kenya’s diplomatic footprint and deepen trade, cultural, and development ties with key global partners.

Denmark is one of Kenya’s long-standing development allies, and the new office opens up opportunities for increased cooperation in renewable energy, climate resilience, and technology transfer.

In Hanoi, the new embassy is expected to boost trade and investment links between Kenya and Vietnam, a rapidly growing Asian economy with significant experience in manufacturing, agriculture, and export diversification.

The Cabinet said the three new diplomatic missions form part of Kenya’s continuing foreign policy realignment to ensure a stronger presence in regions critical to the country’s economic and strategic interests.

Meanwhile, the Cabinet also approved a number of major domestic policy and development measures aimed at improving governance, infrastructure, and service delivery.

Among the key decisions was the endorsement of a Comprehensive Framework for Infrastructure Projects Pricing, designed to curb inflated costs, ensure transparency, and guarantee better value for money in public investments.

The framework seeks to replace irregular and precedent-based pricing with a data-driven model known as the First Principles Approach, which has been successfully implemented in countries like the United Kingdom, Australia, and Singapore. The new system could reduce project cost overruns by up to 25 percent.

The reform, to be coordinated by the Chief of Staff and Head of Public Service, will be implemented through a Multi-Agency Technical Working Team that has already developed sectoral pricing models, cost derivation criteria, and proposals for a National Infrastructure Pricing Database.

Cabinet further approved the waiver of interest and penalties on outstanding land settlement loans to ease the financial burden on low-income settlers. The waiver, covering 520 settlement schemes in 26 counties and amounting to Sh12.3 billion, will allow beneficiaries to obtain title deeds, access credit, and regularise their land accounts.

‘The decision will empower thousands of settlers to unlock the economic value of their land, increase agricultural productivity, and address historical land injustices,’ Cabinet stated.

To improve mobility in the Nairobi Metropolitan area, the Cabinet also gave the green light for the dualling of the Muthaiga-Kiambu-Ndumberi road, a 23.5-kilometre stretch that currently experiences heavy traffic congestion. The project will expand the existing highway into a dual carriageway with bypasses, loops, and non-motorised transport lanes, and is expected to significantly cut travel times between Nairobi and Kiambu Town.

The Cabinet also approved the implementation of the Nairobi National Park-Athi-Kapiti Wildlife Corridor, a flagship conservation project aimed at securing migratory routes and dispersal areas vital for wildlife survival.

The initiative will reconnect Nairobi National Park to surrounding conservancies in Machakos and Kajiado counties, restoring migratory pathways for species such as zebra and wildebeest. Implementation will include land acquisition, wildlife-friendly fencing, and the construction of overpasses and underpasses to ensure safe crossings.

To enhance devolution and service delivery, Cabinet also endorsed the Public Finance Management (Amendment) Bill, 2025, which proposes splitting the County Governments Additional Allocations Bill into two separate laws to speed up disbursement of funds to counties.

The reform is expected to end delays in county funding that have previously stalled local development projects.