Category: Business Daily

The value of unpaid work done by each Kenyan woman has for the first time been set at Sh118,845 per year, putting the collective worth of the hours spent cooking, cleaning and caring for their families at Sh1.89 trillion.

The inaugural Kenya National Bureau of Statistics (KNBS) report, titled Economic Value of Unpaid Domestic and Care Work in Kenya 2025, reveals a stark gender gap in unpaid labour, showing that women’s contribution far outweighs that of men.

According to the study, each Kenyan man performs unpaid work valued just Sh22,676 per year, putting men’s total contribution to unpaid domestic and care work (UDCW) at Sh353.89 billion.

This means women’s unpaid labour amounts to more than five times the collective Sh2.423 trillion annual UDCW, underlining the disproportionate burden of care and domestic responsibilities borne by women across the country.

This marks the first time Kenya has quantified the economic value of unpaid household and care work, offering a glimpse into the hidden economy that sustains millions of families but is not captured in the country’s traditional measures such as Gross Domestic Product.

‘On average, if UDCW activities had been remunerated, each woman aged 15 years and above would have earned Sh118,845 in 2021, whilst men aged 15 years and above would each have earned Sh22,676 for the same period,’ said KNBS in the new study.

The dominance of women in the unpaid labour ties with the 2021 Time Use Survey Report in which KNBS showed women spent 25.8 billion hours on unpaid domestic and care work while men spent 4.8 billion hours.

KNBS equates the Sh2.423 trillion to nearly a quarter (23.1 percent) of the value of Kenya’s economy in 2021, a revelation that reignites the global debate on the economic invisibility of domestic and care work.

The findings mirror a growing recognition worldwide that unpaid household labour – mostly performed by women – forms a vital yet uncounted pillar of economic productivity.

By quantifying its value, the report exposes the huge contribution women make to sustain households, communities and the formal economy, despite receiving neither pay nor recognition for it.

The study relied on the 2021 Time Use Survey Report and the Kenya Continuous Household Survey to quantify how much time women and men spent on household and care activities and assigned an equivalent market wage to that labour.

The report identifies food and meals management and preparation as the single most valuable category of unpaid work for women in Kenya at Sh1.073 trillion from 14.7 billion hours compared to men’s Sh157 billion courtesy of 2.1 billion hours.

The second most valuable form of unpaid work was caring and maintenance of textiles and footwear, where women’s unpaid work was valued Sh295.98 billion compared with men’s Sh55.33 billion.

Cleaning and maintaining the home and its surroundings was the third highest unpaid work for women at Sh192.92 billion while that of men was Sh48.17 billion.

Caring for children including feeding, cleaning and physical care came fourth with women at Sh176.83 billion and men at Sh7.12 billion.

Rounding out the top five categories was shopping for household and family members where women devoted hours valued Sh65.58 billion compared with men’s Sh27.64 billion.

The findings could reshape how Kenya measures and plans for economic development. Many policy experts and champions of equality have argued that not recognising or valuing the unpaid work perpetuates income gaps, lowers productivity and constrains national growth.

The valuation of the unpaid domestic and care work was based on data from the 2021 Kenya Continuous Household Survey which included a Time Use Survey (TUS) module.

The TUS module captured detailed information on how individuals aged 15 years and above spent their time over a 24-hour period, allowing the KNBS to quantify the total hours devoted to unpaid domestic and caregiving tasks.

The value of unpaid work was estimated by multiplying the total time spent on each type of unpaid activity by an appropriate wage rate that would be paid to a market worker performing similar services.

The rise of digital payment systems in Kenya has reshaped how people access and interact with financial markets. From M-Pesa mobile money transfers to bank-linked online wallets, traders now have faster and safer ways to deposit and withdraw funds from their trading accounts. This accessibility is one of the main factors driving the growth of retail forex participation in the country.

For those beginning their journey, understanding what is forex trading and how does it work is essential before leveraging the advantages of digital payments. Once the fundamentals are clear, traders can take full advantage of the speed and efficiency offered by modern payment solutions, allowing them to focus on strategy and execution rather than worrying about transaction delays.

The Role of Digital Payments in the Forex Market

In the past, moving money in and out of a trading account could be slow and expensive, especially for traders outside major financial hubs. Bank transfers often took days, and fees could eat into profits. In Kenya, this used to be a significant barrier for many aspiring traders.

Today, the situation is very different. Digital payment platforms now offer near-instant deposits and quick withdrawals. This means Kenyan traders can respond faster to market opportunities, increasing their ability to trade efficiently. They can also manage risk better by adding or removing capital from their accounts as needed without long waiting periods.

Mobile Money as a Game Changer

Kenya is recognised globally for its mobile money adoption, with M-Pesa leading the way. Many brokers serving the Kenyan market now integrate M-Pesa directly into their funding systems. This allows traders to top up their trading accounts from a phone in just a few steps.

This level of convenience is particularly helpful for traders in rural areas or those without easy access to traditional banking services. It levels the playing field, giving more people the chance to participate in the forex market without logistical limitations.

Benefits of Digital Payments for Kenyan Forex Traders

Digital payments bring multiple benefits to traders in Kenya, making them an integral part of the trading process.

Speed: Instant or same-day deposits mean traders can act quickly on emerging opportunities.

Lower Costs: Reduced transfer fees compared to traditional banking methods.

Accessibility: Easier access for those without bank accounts through mobile money services.

Security: Encrypted payment systems help protect funds and personal information.

By reducing both time and cost barriers, these benefits contribute to a more inclusive trading environment.

Impact on Risk Management

One of the less obvious advantages of digital payments is their effect on risk management. Traders can quickly add funds to cover margin requirements if markets move unexpectedly. Similarly, they can withdraw profits regularly to secure gains outside of their trading account.

For Kenyan traders, this ability to move funds in real time reduces the risk of margin calls during volatile periods and ensures that profits are not left exposed to market fluctuations.

Encouraging More Participation in the Market

As funding and withdrawal processes become faster and more reliable, more Kenyans are exploring forex as an investment and income opportunity. The convenience of digital payments removes one of the main concerns for new traders: the ability to access their money when needed.

This is especially important for younger, tech-savvy individuals who expect seamless financial transactions. By meeting these expectations, brokers and payment providers are encouraging a new generation of traders to engage with the market.

Integrating Digital Payments with Trading Platforms

The best brokers in Kenya are now fully integrating digital payment options into their platforms. This means traders can initiate deposits or withdrawals without leaving their trading interface.

Such integration not only saves time but also ensures that traders stay focused on market activity. They do not need to navigate multiple websites or apps, which can be distracting during active trading sessions.

Challenges to Consider

While digital payments offer many benefits, there are still challenges to address. Fraud and phishing remain concerns, especially when traders are not careful about where they share personal and financial information. It is important to use secure networks and work only with regulated brokers that have strong data protection policies.

Transaction limits on some mobile money services can also be restrictive for high-volume traders. In such cases, combining mobile money with bank transfers or e-wallets can provide greater flexibility.

The Future of Digital Payments in Kenyan Forex Trading

The growth of digital payments in Kenya is expected to continue, with more innovation on the horizon. Faster settlement times, expanded payment limits, and broader integration with international financial systems will further improve the experience for traders.

For the forex market, this means even more people will be able to participate with fewer barriers. As brokers and payment providers compete to offer better services, traders will benefit from increased efficiency and convenience.

Final Thoughts

Digital payment solutions have opened the door for more Kenyans to participate in forex trading than ever before. The ability to deposit and withdraw funds quickly, securely, and at low cost makes it easier for traders to focus on market opportunities rather than logistical challenges.

For those who understand what is forex trading and how does it work, the combination of knowledge and modern payment systems can be a powerful advantage. By choosing reliable payment methods and working with reputable brokers, Kenyan traders can fully enjoy the benefits of this new era in forex trading.

The Treasury on Tuesday made a stark admission of the shilling being undervalued against the dollar, placing Kenya on a collision course with the International Monetary Fund (IMF) that advocates a freely traded exchange rate.

Treasury Cabinet Secretary John Mbadi said at a press briefing on Tuesday that the shilling could strengthen to Sh118 to the dollar if allowed to fall freely in a setting of increased inflows of the US currency.

This suggests that Kenya has been influencing the trade of the shilling against the dollar, adding the exchange rate to the monetary policy tools for managing inflation.

The IMF expressed concern over the unchanged value of the shilling against the dollar, despite global shifts that were expected to see a stronger local currency.

It termed the shilling too stable, having traded on a narrow range between Sh129.22 and Sh129.24 since the start of the year despite weakening against other major world currencies, including the euro and British Pound at 12 percent and 6.1 percent, respectively.

‘By the way, the stability of the shilling has a basis. I was even saying, if it [the shilling] is just allowed free fall, the shilling would even trade at 118 to the dollar,’ said Mr Mbadi, suggesting a State bias for a weaker shilling.

‘Because our current account balance has been improving. Our exports are doing better.’

Mr Mbadi says the local currency’s stability is backed by improving macroeconomic fundamentals, including improved diaspora remittances, tourist receipts and strong export earnings.

A stronger shilling leads to cheaper imports and makes domestically focused companies that rely on inputs from overseas in foreign currency face lower input costs, easing inflation.

It also weakens the Kenyan firms’ foreign earnings, while also making local goods expensive abroad.

Analysts who spoke to the Business Daily anonymously said that the government was likely intervening to keep the shilling weak through purchase of dollars by the Central Bank of Kenya (CBK).

The CBK’s position is that Kenya has a flexible rate policy and only intervenes to smooth volatility.

Mr Mbadi said that the stability of the shilling was supported by a steady inflow of earnings from exports and tourism as well as diaspora remittances.

Export earnings fell 3.06 percent to Sh554 billion in the six months to June, while tourism receipts are expected at between Sh560 billion and Sh650 billion this year from Sh452.2 billion in 2024.

Remittances rose 5.88 percent to $2.519 billion in the six months to June, with the foreign exchange reserves of about $12.1 billion (Sh1.56 trillion) providing ample cover.

The stable shilling got a boost from the 2023 deal to purchase fuel on credit from three state-owned Gulf companies, allowing the country to build up dollars for the purchase over time, rather than requiring about $500 million every month to pay for imports.

Dr David Ndii, the chairperson of the Presidential Council of Economic Advisers, argued that the CBK had been switching between setting interest rates and creating a dollar peg as a measure to check imported inflation.

Most critical goods, including food and petroleum products, are imported and paid for in dollars.

‘We say our [monetary] instrument is interest rates, but when you try to uncover it, it flips between the two [interest rate and exchange rate]. Sometimes we use interest rates and sometimes we use the exchange rate and that’s what I call common sense,’ said Dr Ndii at the NCBA Economic Forum last week.

Dr Ndii further said that Kenya, unlike developed markets, could not rely on interest rates alone as the key monetary policy tool, as the economy is too small and open to shocks, which limits the transmission of interest rate decisions.

Under the IMF’s policy orthodoxy, the exchange rate is expected to serve as a shock absorber – adjusting naturally to external pressures rather than being fixed or heavily managed to help the economy adjust automatically to global shocks.

For instance, if exports slow, a weaker shilling makes Kenyan goods cheaper abroad, helping exporters recover, hence ‘absorbing’ part of the shock.

However, for most frontier economies such as Kenya, which carry large external debt obligations, allowing the exchange rate to adjust freely not only leads to a higher import bill but also increases debt servicing costs, since much of their borrowing is denominated in foreign currency.

Even countries under severe fiscal strain have been known to support their currencies artificially, despite being led by avowed free market advocates.

A case in point is Argentina’s libertarian President Javier Milei, who has intervened in the market to stabilise the peso despite his ideological commitment to minimal state interference.

Mr Milei, who inherited an economy battered by hyperinflation and chronic debt, has propped up the peso through market intervention, a strategy that has eroded foreign reserves but is intended to contain inflationary pressures.

Mr Mbadi said the government’s failure to proactively manage its liabilities ahead of the bullet repayment of a $2 billion Eurobond signalled to international markets that Kenya was at risk of default – a development that, he added, contributed to the shilling’s sharp weakening.

‘After managing the Eurobond of 2024, this year, we thought quickly and managed the 2027 Eurobond when the markets were open,’ he said.

Kenya’s monthly diaspora remittances from Saudi Arabia have dropped to the lowest levels in four years in the wake of the implementation of a new skills-based foreign worker permit system in the Gulf nation.

Central Bank of Kenya (CBK) data shows cash wired back home by Kenyans in Saudi Arabia slid to $16.30 million (Sh2.11 billion) in August and $16.85 million (Sh2.18 billion) in September.

The flows in those two months have nearly halved (fallen by 46.83 percent) from an average of $31.17 million (Sh4.03 billion) in the first seven months of the year, falling to levels last seen in September 2021 at $16.61 million (Sh2.15 billion).

The inflows are also 50.67 percent lower than $33.59 million (Sh4.34 billion) monthly average for 2024, signalling a sudden break in a corridor that had previously been Kenya’s fastest-growing source of diaspora dollars.

Saudi Arabia implemented a skill-based work-permit system mid this year, with reclassification of existing workers starting June 18 and categorisation for new arrivals from July 1.

Enforcement of the new policy for existing workers, including thousands of Kenyans, kicked in on July 5, while new recruits were put on the new regime from August 3.

The new framework has placed foreign workers in three skill groups -highly skilled, skilled and basic- using a mix of academic qualifications, experience, technical capabilities, wage brackets and age.

The highly skilled tier includes doctors, engineers, IT specialists and corporate executives, requiring at least a bachelor’s degree and five years’ experience.

The skilled category covers technicians, mid-level supervisors and craftsmen with at least secondary or vocational training plus a minimum of two years’ experience.

The basic tier, on the other hand, covers entry-level and manual labour roles, with no formal education requirement, but is restricted to workers below the age of 60.

The shift has replaced the decades-old, one-size-fits-all iqama model under which all foreign workers- from janitors to surgeons- held the same residency and work permit category regardless of job description, education or work experience.

Saudi Arabia’s Ministry of Human Resources and Social Development enforced the reform to align talent deployment with the country’s economic transformation priorities, curb over-reliance on low-skilled staff and boost productivity.

But for Kenya, whose migrant flows to Saudi Arabia are dominated by basic and lower-skilled categories, the transition appears to have interrupted wages, contract renewals, onboarding schedules and cash transmission.

The slowdown cut the diaspora remittance flows from Saudi Arabia by 16.87 percent in the first nine months of 2025 to $251.33 million (Sh32.48 billion) from $302.35 million (Sh39.08 billion)-the first annual contraction since the CBK started publishing full-year country-level series in 2020.

That has allowed the UK to leapfrog Riyadh to become Kenya’s second-biggest source of diaspora dollars for the first time since the January-September 2022 period.

The CBK’s tallies show Saudi Arabia had been the single most significant driver of incremental remittances between 2021 and 2024, widening from $88.32 million (Sh11.41 billion) in January-September 2020 to more than $300 million in the same window last year.

That expansion, driven by domestic work placements, contract formalisation and rising Gulf wage floors, had turned Saudi from a fringe source into a macro factor in Kenya’s foreign exchange flows.

By contrast, the diaspora flows from the UK have been gentler, rising from about $150.52 million (Sh19.45 billion) in the first nine months of 2020 to $262.53 million (Sh33.93 billion) in the same period this year. However, this year’s flows have fallen 2.97 percent from the record $270.58 billion in the January-September 2024 period.

The slowdown from Saudi Arabia has come in the middle of a policy transition window.

Since taking office in September 2022, President William Ruto has framed bilateral labour deals as a foreign-policy instrument to create offshore jobs for Kenyan youth and to raise remittance inflows.

‘It is my intention that every year we should be able to send 250,000 Kenyans to work in different parts of the world so that we can enhance and increase the number of people working abroad and enhance our remittances from abroad,’ Dr Ruto said in May 2024. ‘I am committed, and I believe that is doable because I can see that we are on the right trajectory.’

The United States has maintained the anchor, with flows in the January-September 2025 period crossing $2 billion for the first time, accounting for more than 54 percent of total flows.

Kenyans in the US sent back home $2.05 billion (Sh264.94 billion) in the review nine-month period, a rise of 5.70 percent, or $110.42 million (Sh14.27 billion), over $1.94 billion (Sh250.73 billion) a year ago.

The US stability has helped push Kenya’s aggregate inflows to more than $3.77 billion (Sh487.23 billion) in the first nine months of 2025 from $3.64 billion (Sh470.43 billion) last year -a growth of 3.70 percent.

A recent Daily Maverick op-ed critical that the reference to businesses in South African townships as ‘informal’ conveys bias, prompted me to question local practice. Maxwell Gomera and Miles Kubheka make a strong case that using the word suggests that the businesses are somehow ‘incomplete, waiting to be fixed, registered or rescued’.

The usage of the word has been commonplace in Kenya since at least 1970. In the ensuing 55 years, the duality of our economy has been the subject of numerous reports and studies. The analysis has, however, remained firmly rooted in convention.

That sounds very much like most popular entertainment spots in urban Kenya. Informality is the noun denoting absence of formality. It also denotes the grammatical structures, vocabulary and idiom suitable to everyday language and conversation rather than formal contexts.

Formal, also an adjective, is something done in accordance with convention or etiquette; suitable for or constituting something that is officially sanctioned or recognised. It sounds much like large manufacturing enterprise in Kenya.

Tucked away in industrial areas, visited only by invitation. Formality, therefore, is the rigid observance of convention, or a thing that is done to comply with convention, regulations, or custom.

The majority of business in African chose the relaxed, friendly manner, using everyday language, over the more stifled officious manner.

There are academic debates about whether the choice is voluntary or by necessity. Whatever the case, the rules of formality were not made with them in mind.

Governments do of course try to create the correct rules for small business. In 2008, the Ministry of Investments, Trade and Industry (MITI) was implementing the Micro, Small and Medium enterprises (MSME) Competitiveness Project.

One component ‘improving the business environment’ was intended to increase the number of formally registered MSMEs. An early study for the component showed surprising results.

Conducted by Ernst and Young and Kenya Institute for Public Policy Research and Analysis (Kippra), the study found that more than half (53 percent) of the 2,800 firms surveyed countrywide were more than five years old.

So, contrary to conventional wisdom of that time, small businesses were surviving beyond the first 3-5 years, suggesting that they were sustainable, profit making enterprises.

Then and now, small business were believed to face difficulties in accessing financial services, high costs of production due to poor infrastructure and unfriendly regulatory environments, constraints in accessing raw materials, and lack of ready markets for their products.

These problems are believed to make small businesses unable to sustain their operations, lowering their survival rate.

On the formal-informal dichotomy, the data showed that only 28 percent of firms surveyed either had a single business permit (SBP) or were registered by the Business Registration Service (BRS), then Registrar of Companies.

The study revealed that majority of firms delayed formalisation of their operations by an average of 4.4 years.

The results supported the informality by choice theories. There were variations in costs of obtaining the SBP both across sectors and across regions countrywide. Businesses in areas and sectors where the SBP was costly were slow to register or formalise.

Other issues inhibiting formalisation included the number of licenses required in a particular sector and the average time taken to register a business. Record-keeping varied depending on the sector, type of ownership, and the level of education of the owner or manager.

There was also a strong belief that business registration invited the attention of KRA.

Sixty nine percent of all the businesses and a full 86 percent of non-registered firms were not paying taxes, which tied in with the issue of non-registration of businesses.

The policy response was the automation of business registration, now available on e-citizen. The electronic registry was to harmonise records of licences issued by various regulatory and licensing agencies including county governments.

This was expected to hasten the business registration process and curb corruption.

But perhaps the conventional approach was blinding us.

Today, Kenyans move more than three times the annual gross domestic product on mobile money platforms.

These platforms are relaxed and friendly. The successful mobile money operators advertise and communicate using everyday language.

Those that don’t have been consigned to the periphery. It is time to dump the conventional thinking. The informal is the main sector. Kenyan is a good name for it.

Savings and credit co-operative societies (saccos) are enlisting the services of financial consultants to advise and help secure funding from foreign lenders, signalling a gradual shift from overreliance on the conventional local bank loans and member deposits.

Local financial and management consultancy AVLC Group said it had structured financing deals for more than five saccos to secure funding from the World Bank valued at more than Sh1.3 billion this year.

The consultancy said it was receiving more requests from other saccos seeking funding for on-lending to small businesses in various sectors, including trade financing, agriculture and startups.

The loans are being disbursed in Kenya shillings at varying interest rates, with the World Bank, for instance, offering saccos cheaper funding at nine percent.

This means that the societies can on-lend the funds at 12 percent and profit from the interest rate spread -the interest saccos earn on loans they disburse and the cost of interest of securing the same funds.

‘So far, we have over five saccos with a total value processed of over Sh1.3 billion. But it is an ongoing process because right now we are in discussions with other saccos that have been reaching out to us to assist them, especially for the financial year 2026,’ AVLC chief executive Andrew Kanyutu told the Business Daily.

‘We have also had saccos, which are making enquiries from Uganda, Tanzania, to structure deals to access not only the World Bank funding but to tap into other funding available.’

He added that the institution is engaging multiple financiers from the US, the UK and the United Arab Emirates.

Saccos are targeting funding from international financiers to boost their lending capacity amid a challenging domestic economic environment that has severely impacted incomes for households and businesses.

For instance, the consultancy served as the lead arranger in a Sh500 million facility for Githunguri Dairy Farmers Cooperative Sacco under the World Bank-backed SAFER Fund, playing a key role in structuring the transaction, ensuring compliance with international financing standards and aligning the process with sustainability and impact goals.

‘The World Bank’s SAFER Fund was meant to boost post-Covid, but you see, after boosting, now people would want to get to the next level, now you have stabilised, you need growth,’ said Mr Kanyutu.

‘The World Bank still has those kinds of funds and partners they work with to bring on board that funding. Those partners are even private entities who are willing to put funds, but their core business is not monitoring performances, but they are willing to do so through foundations, through certain channels.’

Structuring a financial deal means creating the specific framework and terms for a transaction, including how it is financed, how risk is allocated and how it will be repaid. It involves various components, including pricing, tax implications of the transaction, collateral, guarantees, and repayment schedules to meet specific objectives and manage risks.

In Kenya, the external borrowing ratio for regulated saccos, which measures the proportion of total liabilities from external sources, mainly commercial banks, has been set at a statutory maximum of 25 percent.

According to the Sacco Societies Regulatory Authority, the overall trend analysis of the external borrowing ratio of regulated saccos over the years shows a progressive decline.

The external borrowing ratio for deposit-taking saccos dropped to 2.51 percent in 2024 from a high of 3.02 percent in 2023, while that for non-withdrawable deposit-taking saccos dropped to 1.46 percent from 1.62 percent in the same period.

‘Most lenders want to ensure their funds are safe and, apart from safety, that it is reaching the intended purposes. So they are looking at working with entities and consultants who can understand the customers’ local needs, for example, if you come to Kenya, it is easier for you to lend through a sacco than to come and establish a company and start lending because your core business is not creating the credit models or creating the recovery models,’ said Mr Kanyutu.

‘Your core business you have seen an opportunity, you need to invest, so you work with structured and regulated entities like Saccos who have been able to manage their risks because of the group lending which mitigate default and self- guaranteeing and also they reach the actual intended persons on the ground.’

In December 2021 the World Bank launched a $100 million (Sh13 billion) financing programme for small businesses destroyed by the economic fallout of the Covid-19 pandemic under a five-year programme seeking to safeguard recovery of about 70 percent of the affected firms.

The programme dubbed ‘Supporting Access to Finance and Enterprise Recovery (SAFER) fund’ has opened a window for saccos to strengthen their cash positions through cheaper funding away from bank loans.

The funds are being channeled through the Kenya Development Corporation (KDC).

The bank estimates that about two-third of small businesses in Kenya were affected by the Covid-19 crisis in 2020, with hopes that about 70 percent of them will resume operations based on the financial support.

A settlement agreement is a legally binding contract between an employer and an employee, intended to resolve disputes, claims, or potential legal issues that may arise at the point of separation.

Typically, it involves the employer providing a monetary payment or other form of compensation to the employee, who in turn waives the right to bring further claims. The agreement may also include clauses requiring the employee to keep information relating to the employer’s business confidential.

A recurring question among employers is whether a settlement agreement is admissible in court. Kenyan courts have, however, provided clarity on this issue.

The emerging principle from case law is that when determining whether a release or discharge agreement is valid, the court considers whether the employee executed the agreement freely and voluntarily, and whether they were fully informed of all relevant facts at the time of signing.

Although there is no statutory obligation for parties to resolve disputes through a discharge or settlement agreement, it is prudent for employers to explore this option.

Such agreements provide an opportunity for both parties to negotiate mutually acceptable terms of separation. More importantly, they protect employers from potentially costly legal disputes, which could lead to not only financial loss but also reputational harm.

The primary objective of a settlement agreement is achieved when the employee agrees to waive all claims against the employer. Employees can only validly waive claims related to unfair dismissal or other statutory rights if the waiver is expressly contained within a settlement agreement.

It is important to distinguish a settlement agreement from a clearance form. Unlike settlement agreements, termination clearance forms do not release employers from statutory obligations or claims an employee may have. Courts always consider the fairness of a termination, even where the employee has signed a discharge or clearance form.

Courts also recognise that the parties are often not in an equal bargaining position after termination. An employee may be desperate to receive their final dues and may sign a clearance form hastily, without scrutinising the details.

At such a point, their primary concern is accessing quick cash to meet immediate personal or social needs. Consequently, courts tend not to attach significant weight to such discharge or clearance forms.

That said, this presumption is not absolute. The court remains open to evidence showing that a discharge form was signed freely and with full understanding. It would be erroneous to treat all cases involving discharge vouchers in the same manner.

Each case must be determined on its own merits, with the Employment and Labour Relations Court assessing evidence to support or disprove the validity of the discharge document.

In the absence of statutory or common-law restrictions, the general principle of English contract law applies: parties are free to determine for themselves the obligations they wish to undertake.

They may do so in writing, orally, or by conduct. The court’s role is simply to give effect to the intentions of the parties as expressed in the settlement agreement.

The International Finance Corporation (IFC) will provide a $48 million (Sh6.2 billion) loan to partly fund the construction of OrPower 22’s geothermal power plant in Menengai, Nakuru County.

IFC -the private sector lending arm of the World Bank- disclosed the two loan tranches of $30 million (Sh3.87 billion) and $18 million (Sh2.32 billion) for the project whose total cost is $92 million (Sh11.89 billion). Kaishan Group and other lenders will top up the balance.

OrPower 22 is one of the three energy firms that are developing geothermal power plants in Menengai. Each of these plants will have a 35 Megawatts (MW) capacity.

The three are key in boosting the share of clean energy in the national grid, offering Kenya a chance to boost electricity supply at cheap prices.

‘The proposed financing package includes, a senior loan of up to $30 million from IFC’s own account, a dollar interest rate swap intermediated by IFC, parallel loan of up to $16.4 million and a senior loan of up to $18 million from IFC acting in its capacity as implementing entity for the Managed Co-lending Portfolio Program (MCPP). The balance is covered by equity from Kaishan,” IFC says in disclosures.

Kaishan Group fully bought OrPower 22 two years ago, a move that gave the Chinese firm entry into Kenya’s electricity generation space.

The other two firms developing the geothermal power plants in Menengai are Globeleq of Britain and Sosian Energy, which is linked to the family of the late President Daniel arap Moi.

Sosian completed its plant and started supplying the electricity to Kenya Power in 2023. Globeleq and OrPower 22 expected to complete their plants and link them to the national grid by June 2026.

The three projects are key to boosting Kenya’s electricity supply amid growing reliance on Ethiopia and Uganda to meet the fast-rising demand.

The share of electricity imports in the national grid crossed the 10 percent-mark for the first time in the year ended June 2025 as Kenya deepened its reliance on neighbouring countries to avoid power rationing and blackouts.

Official data shows that electricity imports accounted for 10.6 percent or 1.53 billion kilowatt-hours (kWh) in the year ended June more than double the share of 4.87 percent 644 million kWh two years ago and a paltry one percent in the year to June 2021.

Electricity from Ethiopia accounted for 81 percent of the total imports in the year ended June 2015. Kenya Power has a 25-year Power Purchase Agreement (PPA) with the Ethiopia Electric Power where a kWh is priced at $0.065 (Sh8.44).

Imports in a month hit a historic high of 150.45 million kilowatt-hours (kWh) in August this year, largely driven by a surge in shipments from Uganda.

Kenya Power’s imports from Uganda nearly doubled in August to 32.5 million kWh in August this year compared to 18.95 million kWh a month earlier as imports from Ethiopia dipped in the same period.

The government has settled Sh93 billion road sector pending bills using bank loans ahead of the issuance of a bond to clear the arrears accumulated in building transport infrastructure.

The Treasury says the State tapped a Sh104 billion loan from a syndicate of commercial banks to settle verified pending bills in the sector, allowing road contractors to resume abandoned projects.

The payments have revitalised growth for the building and construction sector, which fell into a technical recession, marking two consecutive quarters of contraction to September last year.

The government says it is inching closer to raising Sh175 billion from a roads bond, which is expected to clear the commercial bank bridge facility and foot the remaining arrears to contractors.

‘We have already paid Sh93 billion to road contractors who have since resumed work, and I am sure you can attest that road construction has resumed across the country,’ said Treasury Cabinet Secretary John Mbadi on Tuesday.

‘We started by going for a bridge facility where we have raised Sh104 billion. This shall be extinguished once the road bond is finalised. We are currently finalising the market sounding process ahead of the bond issuance, which will take place this month, where we aim to raise Sh175 billion in the first tranche.’

Investors in the roads bond will be paid using part of the collections from the Roads Maintenance Levy Fund, which has been securitised using collections of Sh7 per litre of petrol or diesel sold.

Kenya increased the fuel levy from Sh18 to Sh25 per litre in July 2024, with the additional charge being expected to cover payments to the road’s bond investors.

The Trade and Development Bank, KCB Bank Kenya, Absa Bank Kenya and UBA Kenya Bank have been the primary financiers for the bridge facility, with UBA estimating its disbursement to the fund at Sh12.9 billion ($100 million), backed by its Nigerian parent.

The Kenya Roads Board has been wiring drawings from the bridge facility to road agencies, including the Kenya National Highways Authority, the Kenya Rural Roads Authority and the Kenya Urban Roads Authority, to meet contractor payments.

Construction sector activities grew by 5.7 percent in the second quarter of 2025, offsetting a 3.7 percent contraction at the same time last year, as per data from the Kenya National Bureau of Statistics.

The recovery helped lift overall gross domestic product growth for the period to five percent from 4.6 percent previously.

Cement consumption increased by 23.9 percent to stand at 2,424,400 tonnes from 1,957,100 tonnes in the corresponding quarter of 2024.

The quantity of imported bitumen rose to 22,659,300 tonnes from 15,566,200 tonnes, while iron and steel imports stood at 526,606,400 tonnes from 222,112,300 tonnes previously.

The construction sector has also seen an uptick in lending, where credit to enterprises in the sector grew by 21.7 percent to stand at Sh159.6 billion in the 12 months to June 2025 from Sh131.1 billion a year earlier.

‘Payments to the road sector have helped in boosting economic growth,’ said the Treasury minister.

A task force appointed by President William Ruto is expected to complete the verification of all pending bills next month before forwarding a report to the Exchequer, detailing initiatives to clear the arrears.

‘We have put up diverse financing strategies and payment plans to deal with pending bills once the final report is received,’ said Mr Mbadi.

National government pending bills stood at Sh526 billion in June, rising from Sh421.6 billion in March to defy the road sector payments.

Kenya’s debt service to the United States surged in the year to June 2025 to Sh18.4 billion, up from just Sh357 million in 2024, as the government accelerated repayments amid a policy shift by Washington to end direct lending to countries.

The 51.6 times jump pushed Kenya’s US debt repayments of both principal and interest to record levels, reflecting efforts to clear sovereign debt owed to one of its key bilateral lenders.

National Treasury Cabinet Secretary John Mbadi said the fast-tracked payments follow a change in the US’s bilateral lending approach from direct government loans to financing through its agencies.

‘We are clearing the loans to the US government in about two or three years because the US government changed their model of financing and now they are financing activities and programmes using their agencies directly,’ said Mbadi during a press briefing Tuesday.

‘These are loans that were taken previously that are now retiring. Some of them are from many years ago, and we are now completing their repayment. That is why there is that elevation in debt repayment.’

As of June, Kenya’s debt to the US stood at $185.47 million (Sh23.9 billion), a steep drop from $310.13 million (Sh40 billion) a year earlier, Treasury data shows.

The reduction means Kenya now owes less to the US than to Belgium and Italy, which have historically lagged Washington in lending to African governments.

The shift to using agencies for project financing means Kenya may no longer receive broad budgetary support from the US, but rather sector-specific funding from institutions such as the US International Development Finance Corporation (DFC) and Prosper Africa.

The DFC has recently been strengthened under the Donald Trump administration, with its funding capacity raised from $60 billion (Sh7.8 trillion) to $250 billion (Sh32.3 trillion) and its mandate expanded to invest and lend even in high-income countries.

This new financing model mirrors that of the United Kingdom, which no longer lends directly to foreign governments but instead channels development funding through its agencies -the British International Investment (BII) and the UK Export Finance (UKEF).

Such models shield developed countries from the debt distress risks prevalent in many developing nations while mitigating political exposure in an increasingly fragmented global landscape.

Within the past year, Kenya also cleared its debt to Finland and sharply reduced its outstanding obligations to Denmark, Austria, and China.

However, as it races to retire US debt, Kenya has increased borrowing from Belgium, France, Germany, Italy, and Japan, all of which remain among its top ten bilateral lenders.

Even so, due to the sharp reduction in debt owed to the US and China, Kenya’s total bilateral debt fell by $377.16 million (Sh48.7 billion) to $8.6 billion (Sh1.1 trillion) as it turned to more concessional multilateral and commercial debt.

Overall, the country’s external debt stock rose by $2.5 billion (Sh323 billion) to $42.4 billion (Sh5.5 trillion), driven largely by higher commercial and multilateral borrowing from lenders such as the African Development Bank and the International Monetary Fund.