Category: Business Daily

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 Kenya Revenue Authority (KRA) has been barred from collecting 16 percent value-added tax (VAT) from firms that link banks, mobile money operators and payment service providers, marking a major win for Kenya’s three main payment switch companies.

In a ruling on October 24, the Tax Appeals Tribunal faulted the KRA’s move to levy VAT on Kenswitch’s services, finding that the firm provides financial rather than ICT services.

The tribunal noted that these financial services are exempt from the consumption tax.

Kenswitch, which interconnects banks’ automated teller machines (ATMs) and point-of-sale (POS) networks, had challenged a tax demand of Sh41.6 million on the portion of interchange fees it received for switching services. The taxman argued that such services were ICT-based and therefore taxable.

However, the tribunal sided with Kenswitch, declaring that the company’s switching role is integral to the financial system and squarely within the VAT exemption.

‘The tribunal is persuaded that KRA erred both in law and in fact in finding that the appellant’s services are taxable under the VAT Act,’ the ruling stated.

‘The appellant’s services clearly fall within the meaning of ‘financial services’ exempt from VAT under Paragraphs 1(b) and 1(m) of Part II of the First Schedule to the VAT Act, 2013.’

It added that the VAT assessment of Sh41,637,843 issued on July 9 and confirmed on October 4, 2024, was ‘erroneous and unlawful’.

Besides Kenswitch, other licensed switch companies include PesaLink (operated by Integrated Payments Services Ltd-IPSL), a subsidiary of the Kenya Bankers Association.

Switchlink Africa, which supports fintechs and payment processors, is the third firm offering payment switch services.

A switch acts as the ‘traffic controller’ of Kenya’s digital payments highway, directing money and data between banks, mobile money operators and card networks.

These firms are licensed by the Central Bank of Kenya (CBK) under the National Payment System Act 2022, and related regulations.

The KRA had relied on the Banking Act to argue that Kenswitch was not a ‘financial institution’ and that its commissions amounted to software-related income subject to VAT.

It claimed the company used third-party software supplied through Mauritius-based EFT Corporation and global provider ACI Worldwide, and therefore its services were excluded from VAT exemption as ICT.

The tribunal dismissed this reasoning, noting that Kenswitch neither supplies ATMs nor sells software and that its core function is financial intermediation rather than ICT services.

In a card transaction, several parties are involved: the cardholder, the issuing bank, the acquiring (receiving) bank, a merchant and the switch company. The acquiring bank deducts an amount from the money due to the merchant for the transaction, known as a Merchant Discount Rate (MDR).

The acquiring bank pays the balance to the merchant and then apportions the MDR between the card companies, the switch payment service firm and the issuing bank. The money paid to the issuing bank is the interchange fee.

The tribunal faulted KRA for seeking to charge VAT on only one of these parties while leaving the other two unaffected.

The stakes around switching are set to rise as the country moves toward a national switch that will enable customers to move money across any mobile provider or banking institution promptly and at reduced cost.

The CBK has announced plans to develop a ‘single integrated solution with multiple functionalities (national switch).’ While mobile money already allows instant transfers between Kenyan banks and digital wallets, coverage often depends on bilateral agreements, leaving gaps.

As part of its National Payments Strategy, the CBK wants to introduce a financial sector-wide interoperability system to allow users to send and receive money instantly, regardless of the bank or financial institution they use.

Kenya’s payments ecosystem remains fragmented, with mobile money platforms like M-Pesa and Airtel Money operating separately from other financial institutions; for example, some banks and microfinance institutions still do not allow transfers to Airtel Money wallets.

Mobile money continues to dominate Kenya’s payments market. In 2024, mobile money services processed over Sh8.7 trillion, outpacing traditional methods like cheques (Sh2.48 trillion). High-value transfers through the Real-Time Gross Payment System stood at Sh27.86 trillion in the eight months to August.

Kenya’s $223 billion infrastructure dream is slipping away. With rising debt, fuel levy securitisation, and weak project execution, the country must rethink how it funds and manages development.

According to the Global Infrastructure Outlook developed by the Global Infrastructure Hub and Oxford Economics, Kenya will need about $223 billion in infrastructure investment between 2016 and 2040 to sustain economic growth, urbanisation, and social transformation (Global Infrastructure Hub, 2023).

Spread over 25 years, this amounts to roughly $8.9 billion annually, covering transport, energy, water, and communications. Nearly a decade into this timeline, Kenya’s investment path reveals the country is significantly behind target.

Government expenditure records since 2016 show that development spending has remained far below what the economy requires.

Treasury’s 2024 data show annual development budgets have averaged between Sh600 billion and Sh740 billion, equivalent to $4.4 billion to $5.5 billion.

Yet, only around 60 percent of this typically goes into physical infrastructure such as roads, energy, and water works, according to the Parliamentary Budget Office (in 2023). This translates to about Sh350-Sh450 billion or $2.6 billion to 3.3 billion a year dedicated to infrastructure.

The problem is compounded by low absorption rates. Treasury data show that ministries and agencies frequently spend less than what is allocated, largely due to delayed procurement, financing bottlenecks, and weak project management, according to the Treasury Quarterly Budget Review of 2024.

In the 2023-24 fiscal year, only Sh434 billion of the Sh587 billion allocated for development was spent-an absorption rate of just 74 percent. As a result, even the modest allocations are underutilised, undermining project delivery.

On aggregate, infrastructure investment between 2016 and 2024 is estimated at $23 billion to $25 billion, or roughly 11 percent of the projected requirement (Oxford Economics, 2023).

Even after factoring in donor and private participation, the cumulative figure likely does not exceed $28 billion, leaving a $195 billion gap over the remaining 16 years. To meet the 2040 target, Kenya must therefore invest around $12.4 billion annually from 2025 to 2040-almost four times the current rate.

Achieving this would require infrastructure investment to grow by eight percent annually, or by 13 percent to close the gap within a decade.

This ambition faces a stiff fiscal headwind. Kenya’s public debt has ballooned from 42 percent of gross domestic product in 2013 to over 70 percent in 2024, according to the Central Bank of Kenya. Debt service obligations are projected to hit Sh1.9 trillion in the 2025-26 fiscal year, consuming more than half of total government revenue (National Treasury Budget Policy Statement, 2025).

This leaves little fiscal space for new capital spending and forces the government to rely heavily on off-balance-sheet financing mechanisms.

One such mechanism is the securitisation of the fuel levy, through which the Kenya Roads Board (KRB) has pledged future road maintenance revenues to raise infrastructure capital.

The government has already securitised Sh175 billion by diverting Sh7 out of every Sh25 per litre from the Road Maintenance Levy Fund to a special purpose vehicle.

As of mid-2025, about Sh60 billion has been raised and disbursed to contractors, helping to revive over 580 stalled road projects. Financial institutions, including the United Bank for Africa, have collectively invested over Sh16.38 billion in the scheme.

While the programme is structured to avoid direct government guarantees, it effectively shifts borrowing off the national balance sheet by mortgaging future fuel revenues.

Other off-balance-sheet strategies include public-private partnerships (PPPs).

Since Kenya adopted the PPP framework in 2013, about Sh140.7 billion in private capital has been mobilised into infrastructure, including flagship projects such as the Sh88 billion Nairobi Expressway and the Kenyatta University Teaching, Referral and Research Hospital.

However, PPP inflows have sharply declined: private investment plunged from Sh80.6 billion in 2022 to Sh4.3 billion in 2024. The Treasury reports that 39 PPP projects worth a combined $13 billion (Sh1.69 trillion) have been approved, but progress has been slow due to regulatory delays, financing uncertainty, and risk allocation concerns.

For fiscal 2025-26, the Treasury targets Sh70 billion worth of PPP projects in the energy, housing, health, and transport sectors.

The most promising financing frontier lies in mobilising domestic long-term capital.

Kenya’s pension funds now hold more than Sh1.6 trillion in assets, yet less than two percent is invested in infrastructure (Retirement Benefits Authority, 2024). Channelling even 10 percent of these funds could significantly close the investment gap. Additionally, implementing the Kenya Sovereign Infrastructure Fund would provide patient capital for strategic projects while easing reliance on commercial borrowing.

Still, Kenya’s challenge is not merely one of financing-it is also about efficiency. The Office of the Auditor-General has repeatedly flagged inflated project costs, delays, and incomplete works. Without addressing governance weaknesses, even increased funding will yield poor outcomes.

Transparent project appraisal, stronger monitoring frameworks, and prioritisation of high-return investments are critical for value creation. The focus must move from the volume of spending to the quality and sustainability of investment.

Infrastructure is the backbone of Kenya’s economic future. Roads, ports, water systems, and energy networks shape productivity, lower logistics costs, and attract investment. Yet, with less than one-eighth of the 2040 target achieved in nine years, the gap threatens to undermine Vision 2030’s goals.

To meet the $223 billion target, Kenya needs fiscal discipline and innovation. Securitisation, PPPs, pension mobilisation, and sovereign funds all have roles-but they must be guided by clear governance and risk frameworks. Otherwise, off-balance-sheet financing will simply shift debt burdens into the future without improving real infrastructure outcomes.

Kenya’s infrastructure journey is at a crossroads. Unless the country realigns its priorities and expands domestic financing while tightening governance, the 2040 horizon will arrive with unfulfilled promises, congested highways, and the same power and water deficits that have constrained growth for decades.

Edmands not only more money but smarter management of what is already in hand.

Kenya’s airline operators have joined other tourism stakeholders in opposing the new park fee payment system introduced by the Kenya Wildlife Service (KWS).

Under the new system, only M-Pesa and Visa card payments are accepted, with the KWS scrapping the bank transfer option that many tour operators relied on for group payments. What has further unsettled the industry is the introduction of an 8.5 percent processing fee for all card payments, a rate KTF says is high compared to other government platforms.

The KWS has also been faulted for using an inflated exchange rate of Sh135 per US dollar, which is higher than the Central Bank of Kenya’s current rate of around Sh129.50.

Stakeholders say the discrepancy has pushed up park entry costs, making Kenya’s destinations less competitive regionally and globally.

Alex Avedi, CEO of Safarilink Aviation, says the new system has triggered booking cancellations and uncertainty among tour agents who are the main clients for local airlines flying tourists to parks and conservancies.

‘We are at the end of the chain; we only fly on behalf of agents. When agents face cancellations, it hits us directly. We make investment and operational plans based on projected passenger numbers, and once you commit to acquiring an aircraft, it’s a long-term engagement. It’s not something you can easily walk away from,’ he said.

Mr Avedi said the abrupt changes, including the withdrawal of bank transfers and the introduction of an 8.5 percent card processing fee, have led to a drop in air traffic to key tourist destinations.

He added that the uncertainty caused by frequent policy shifts is undermining investor confidence and hurting the country’s image in key source markets.

‘In regions like the EU, once a safari quote is given, it cannot be changed. When additional costs are introduced suddenly, the travel agents have to absorb the loss and that risks pushing them out of business,’ said Mr Avedi.

Kenya Tourism Federation Chairman Fred Odek said the sector is already under immense pressure and that the abrupt rollout of the new system has worsened the crisis.

According to a regulatory impact statement from the Ministry of Tourism and Wildlife, park fee revenues are projected to rise from Sh7.41 billion in 2024 to Sh16.58 billion by 2028.

However, KTF estimates that industry players risk to lose almost Sh370 million annually in the unbudgeted costs under the current system.

Mr Odek said the federation wants the government to restore the previous eCitizen-based payment system to allow multiple and flexible payment options for both local and international visitors.

It also wants the suspension of the 5 per cent gateway fee pending stakeholder consultations and review, and the full compliance with existing court orders to uphold the rule of law in managing the system.

‘Digital progress should not translate into economic hardship for legitimate businesses. We remain open to collaboration with KWS and the Ministry, but urgent corrective action is needed,’ he said.

The rapid pace of technological development exceeds organisations’ ability to establish effective governance systems.

The workplace experienced a similar phenomenon in the last decade when staff members brought Dropbox, Google Docs and Slack into their work environments before organisational approval. Workers adopted these tools because they needed solutions that official systems failed to provide. The official tools were too slow, clunky, or nonexistent, so workers found their own.

The current situation with shadow AI mirrors the previous case of shadow IT. Shadow AI is the unsanctioned use of AI tools or applications by employees without approval or oversight of the employer.

There are several reasons why employees turn to shadow AI.

The underlying factors are similar to previous situations, which are activated when employees encounter performance deficiencies, including productivity pressure, where a marketing associate uses AI to generate campaign ideas within a short time frame and complexity gaps, where a financial analyst uses AI to verify formulas instead of waiting for their peers to review them.

These examples demonstrate that staff members use AI tools to address genuine operational challenges rather than seeking new technology for its own sake.

However, the challenge arises when employees are using AI tools without proper oversight. There are several hidden risks, and shadow AI creates three distinct risk categories that organisations must address.

One, data exposure represents the first risk factor because sensitive information and client data become vulnerable to unauthorised disclosure when fed into unprotected AI systems.

The implementation of AI systems leads to two major problems – biased results and non-compliance with regulations. AI systems generate biased or inaccurate results, which can lead to legal exposure when organisations use them for hiring or decision-making processes.

Leaders who are at the centre of organisations need to first validate employee needs by understanding that shadow AI demonstrates their desire to enhance their work efficiency and create specific rules which define authorised tools and data handling procedures and prohibited usage practices.

The organisation needs to deliver training sessions about proper AI usage, which should include lessons about bias detection and privacy protection and system security and should also purchase enterprise-grade AI solutions which provide secure platforms for employees to work with, instead of forcing them to hide their tools.

Executives who view shadow AI as a threat alone will overlook the substantial business potential it presents. Organisations that recognise shadow AI as a strategic indicator will convert potential risks into business advantages.

Organisations face a straightforward decision between letting shadow AI control their operations or using it to establish purposeful leadership.

Further, the organisation needs to develop a system for periodic assessments which will monitor AI usage for safety and compliance with business objectives.

Additionally, when staff members start to conceal productivity tools from their superiors, it leads to a breakdown in employee trust which damages organizational culture.

Government entities must maintain close observation of these developments. The AI Act has partially taken effect throughout Europe, it demands organisations to maintain records about their AI system utilization and implement proper governance systems.

Organisations that fail to monitor shadow AI usage today will face difficulties when regulatory bodies start enforcing new rules in the future.

History shows the right path. Organisations progressed from banning cloud services to creating structured systems for cloud adoption after their employees started using shadow IT. The same approach needs to be applied to AI systems.

Leaders who are at the centre of organisations need to first validate employee needs by understanding that shadow AI demonstrates their desire to enhance their work efficiency and create specific rules which define authorised tools and data handling procedures and prohibited usage practices.

The organisation needs to deliver training sessions about proper AI usage which should include lessons about bias detection and privacy protection and system security and should also purchase enterprise-grade AI solutions which provide secure platforms for employees to work with instead of forcing them to hide their tools.

Further, the organisation needs to develop a system for periodic assessments which will monitor AI usage for safety and compliance with business objectives.

Shadow AI functions as an indicator rather than an act of defiance against authority. The current situation demonstrates that employees want to adopt new work approaches although their leaders have not adopted these changes.

Executives who view shadow AI as a threat alone will overlook the substantial business potential it presents.

Organisations that recognise shadow AI as a strategic indicator will convert potential risks into business advantages through the development of organisations that excel at AI operations.

Organisations face a straightforward decision between letting shadow AI control their operations or using it to establish purposeful leadership.

Stand-up comedy is often dismissed as a mere “side hustle,” sometimes compared to the frivolous skits dominating social media, but anyone paying attention to the Kenyan stand-up scene knows it’s a demanding art form requiring immense intellectual rigour.

The current crop of comedians is a testament to this. We have Ruth Nyambura (a banker), Ty Ngachira (a lawyer), George Waweru (a telecommunication engineer) and Doug Mutai (an entrepreneur), just to mention a few.

And to reinforce that, on the evening of November 1st at the Alliance Française Auditorium, we got the long-overdue recording of Bashir Kiptoo Halaiki’s stand-up special, who just happens to be an aeronautical engineer.

With six years in the Kenya stand-up scene, Halaiki, a witty, sociable, and intelligent character, finally took the leap to tape his first special, simply titled A Halaiki.

Setting the stage

The evening’s atmosphere was first established by Darren, the show’s director. His task was to manage the live taping logistics, setting ground rules with a comedic touch.

He didn’t issue sterile commands, instead, he used his own stand-up ability to gently enforce protocols, ensuring the crowd’s energy was high and everyone understood their role in the recording process. It was a brilliant, almost meta-performance that established the required seriousness while maintaining the mood.

Emmanuel Kisiangani

As the official host he proved to be the perfect choice. His energy was okay (I have seen him do better), I thought his experience in crowd work and improv did a lot of the heavy lifting.

Kisiangani effortlessly transitioned from hosting duties into the first act, immediately engaging the audience with material ranging from the popular Mwafreeka/Raptcha relationship to the relatable struggles of employment, living in Kitengela, and the nuances of marriage.

While his hosting felt perfectly honed, his stand-up set leaned heavily on crowd work and improv, giving the impression of an incredibly smart student who did not prepare for the exam, sometimes struggling to keep up. Though he scattered some brilliant material, the set felt more like a spontaneous clinic in improvisation than a carefully structured opening act.

Titus Mutai

Titus Mutai followed with a very solid set of material that felt prepared and well-rehearsed. While familiar to seasoned fans, his material on his name, relationship arguments, and weight issues was layered with decent storytelling but weak delivery.

He delivered a quality set that at times resonated with the majority of the audience, showcasing a comedian who didn’t need to prepare for the exam because he benefited from a leakage.

Nduta Kariuki

Her performance was wonderfully laid-back and intimate. While she demonstrated a warm, storytelling style, speaking on growing up on the farm and the challenges of gym life, she seemed genuinely shaken by the lights and sheer size of the audience.

Her set felt less about conventional comedy and more like a heartfelt conversation, focused on appreciating her peers and the fans of The Kisiangani podcast.

Like Kisiangani, there was a sense of brilliant content that hadn’t been fully solidified for the magnitude of the event, yes, another brilliant student who didn’t prepare for the exam.

George Waweru

George Waweru (Chai Knees) was prepared. He did a fantastic job of keeping the focus squarely on the laughs. His bits, covering topics like dating, toxic masculinity, wearing the same shirt as Kisiangani and the chaos of protests, were well-tagged, and his delivery was perfectly timed. He was highly present and engaging.

There was a sense of ownership of his set time, a sense of control, earning a huge reaction from the audience and proving that he was that one student who came in fully prepared for the exam.

Themain event: Bashir’s execution

When Bashir Halaiki finally took the stage, the evening culminated in an undeniably well put-together performance. Out of fairness to the upcoming release of the special, I won’t detail the material.

However, I can attest that his content was deeply personal, pushing the envelope on subjects like religion and his own background, while maintaining a surprising level of approachability.

What truly defined his performance was the execution. The pacing of his set was magnificent, he moved from setup to punchline with no awkward pauses or noticeable breathing room.

It was evident this was a show years in the making; every joke was lean, well-constructed, and precise. He possessed the committed, focused energy of a self-aware comedian at a crucial moment in their career, similar to watching comedy legends during their breakout specials in the 90s.

The only slight gripe was his stage presence. Though he occasionally moved, and the contrast between his outfit and the background made him stand out, it felt as though he had been strictly directed to stand at one spot.

Sacrificing some of the stage control seen in the other acts. But this minor blocking constraint did nothing to slow the relentless momentum of his tightly packed material. The director, Darren, will undoubtedly have a tough time editing, as there was virtually no fat to trim.

Despite the rain and the slight feeling of a ‘Kisiangani Podcast’ get-together among the performers, the event was a fun experience.

More stand-up

The stand-up special will hit our screens sometime in the future, but if you are still hungry for some Kenyan stand-up comedy, there are events taking place weekly, plus Mammito Eunice, Amandeep Jagde, and Doug Mutai have a stand-up special available on YouTube for free.

At a time when Nairobi’s satellite towns like Ruiru, Utawala, and Ruai are thriving with new apartment blocks and high rental demand, Buruburu, once the pride of Kenya’s middle class, is struggling to attract decent renters.

The estate’s streets still carry traces of the 1970s promise of modern living, but that charm no longer appeals to today’s professionals.

‘Buruburu was designed to serve the emerging middle class in the 1970s,’ says real estate investment analyst Johnson Denge. ‘It comprises five phases built between 1974 and 1984.’

Five decades later, that vision is showing its age. Many of the maisonettes are now 40 to 50 years old, with outdated designs and little renovation.

‘The estate is nearing obsolescence,’ Mr Denge says. ‘Without regeneration, it cannot attract as much rent as newer areas.’

Buruburu’s early appeal lay in its neat rows of maisonettes, gardens, and paved roads. While similar estates such as South C and Kilimani have transformed to accomodate the tastes of today’s middle class, Buruburu has not given in to the pressure, remaining stunted.

‘Areas like Ruiru and Utawala have taken over because they offer modern designs and better planning,’ Mr Denge notes. ‘Tenants looking for value for money prefer those locations.’

The unchecked conversion of homes into commercial spaces has worsened the situation. ‘People are extending their houses to tap into high-density demand, which erodes the estate’s original appeal,’ he says.

Infrastructure has also declined. Poor roads, congestion, and rising insecurity have pushed the middle class elsewhere.

‘Buruburu is now surrounded by lower middle-income estates and suffers from poor infrastructure and social ills. The middle class has options, and Buruburu is no longer one of them,’ says Mr Denge.

He estimates that maisonettes of 100-200 square metres fetch between Sh35,000 and Sh60,000 monthly, rates that have barely changed in years. ‘The rent should be around Sh300 to Sh500 per square metre, depending on condition,’ he says.

The zoning hurdle

One of the biggest barriers to redevelopment is Buruburu’s zoning restrictions, which prohibit high-rise apartments.

‘Unlike South B and South C, where the county government relaxed zoning rules and upgraded sewer systems, Buruburu remains tightly controlled,’ Mr Denge explains. ‘Investors prefer nearby areas where they can build higher and maximise returns.’

Even if zoning were relaxed, expansion options are limited since the estate is fully built up. ‘Buruburu was fully built up, so there is very little room for expansion. To spur development, the county must allow higher densities to attract private investors,’ he suggests.

Property agent Christine Otieno of Urban Realtors says tenants nowadays prioritise convenience and aesthetics, qualities Buruburu struggles to offer.

‘A modern two-bedroom unit in Kamakis or Utawala goes for Sh35,000-Sh45,000, with amenities such as rooftop laundry areas, parking, a gym, and security. In Buruburu, for the same rent, you get an older maisonette that needs renovation,’ she says.

Many tenants, she adds, would rather pay Sh5,000-Sh10,000 more for a modern, secure home. ‘For them, it’s about lifestyle, not just shelter.’

Rental income

Data from several agencies show that while a standard maisonette in Buruburu rents for Sh35,000-Sh60,000, similar units in newer estates like Greenspan, Nasra, or Mihango fetch between Sh45,000 and Sh70,000, and tenants are willing to pay the difference.

Ms Otieno says that middle-class tenants increasingly view Buruburu as ‘an outdated option,’ despite slightly lower prices.

‘When clients compare a fresh apartment in Ruiru with an old Buruburu unit with cracked terrazzo floors and little parking, the choice is obvious,’ says Ms Otieno.

According to Moses Akumu, another property agent, single rooms go for Sh4,000-Sh8,000, bedsitters Sh8,000-Sh12,000, one-bedroom units Sh12,000-Sh18,000, and two-bedroom houses Sh18,000-Sh30,000.

Buruburu’s golden era

In the early years, Buruburu homeowners bought their units through the Housing Finance Corporation (now Housing Finance Group), paying gradually while in occupancy.

Phase One resident Patrick Mwai, who now chairs the Buruburu Phase One Residents’ Welfare Association, recalls buying a house for about Sh44,000, a significant cost then.

‘Salaries were about Sh600-Sh800 for government workers,’ he says.

He fondly remembers the estate’s original setup: ‘We had short wooden fences, shared courts with trees, flower beds, and car parks. It was a planned, green neighbourhood.’

But over time, matatus began using estate roads, and livestock grazed freely. Residents also started building upwards, beyond the original one-storey limit.

‘We have been resisting that, because if you build a house on three floors because they block sunlight and airflow,’ Mr Mwai says.

Estate ranking

A 2023-2024 KNBS real estate report ranks Buruburu in the ‘Nairobi Middle’ category alongside Kasarani, Donholm, Kamulu, Ruai, and Madaraka, the third of four residential tiers.

A two-bedroom bungalow in Buruburu now averages Sh11.2 million, far below the Sh66.3 million average in upper-tier areas. A three-bedroom maisonette costs Sh13.5 million, compared to Sh31.3 million in Kilimani and Sh88 million in Karen.

Kariobangi South MCA Robert Mbatia blames poor roads for further dampening Buruburu’s prospects.

‘Phase One has very dilapidated service roads that have never been repaired since construction,’ he says. ‘They’re now bare and muddy, especially during the rains, one of our biggest challenges.’