Category: Business Daily

Bond prices in the secondary market at the Nairobi bourse have come down compared to a year ago as interest rates rise in the wake of the war in Iran, cutting the profits for those opting to sell their bonds before maturity.

In their half-year financial results, listed banks say they recorded a paper loss of Sh7.2 billion on the value of their government bonds due to the secondary market price movement.

A sample of listed bonds shows that majority are trading at market prices that are lower compared to last year, backing the revaluation by banks.

On the shorter end of the market, a three-year bond issued in January 2024 is now trading at Sh104.95 per unit of Sh100, down from Sh111.18 in June 2025.

A five-year bond issued in July 2023 has seen its price fall from Sh115.56 to Sh111.47 in the period. Similarly, long term bonds are also trading lower, with a 20-year paper issued in April 2019 trading at Sh95.62 per unit, from Sh99.15 last year.

A unit of a bond is priced at Sh100 when the paper is first issued by the Central Bank of Kenya (CBK) in what is known as a primary sale.

But they usually sell above or below this price in the secondary market at the Nairobi Securities Exchange (NSE) depending on the prevailing demand, which is determined largely by whether new bonds coming into the market are paying higher or lower rates in comparison.

Therefore, bond prices and yields in the secondary market have an inverse relationship, where a rise in one accompanies a fall in the other. These market prices are used when reporting the fair value of securities, including those holdings in the hands of commercial banks, pension funds and insurance companies.

Bankers Sh7.2 billion paper losses are in contrast to the gain of Sh46 billion the lenders reported on their balance sheets in the corresponding period in 2025, when falling interest rates resulted in higher bond prices.

The change in valuation has come after yields in the NSE bonds market rose from the end of February after the start of the war in Iran spooked global markets, pushing rates higher. Inflation also jumped due to higher energy prices, forcing investors to demand higher returns from bond issuers to cover against erosion of real returns.

The price falls however do not affect securities issued at a high premium of between 15 and 18 percent- such as the infrastructure bonds of 2023 and 2024-still attracting high prices because new bonds cannot match their returns. The 8.5-year infrastructure bond sold in February 2024 at 18.46 percent is still trading at Sh122.25 per unit, compared to a price of Sh122.39 in June 2025.

When rates on new bonds coming into the market in primary sales are falling, holders of existing papers that pay higher interest rates demand higher prices in order to sell their units in the secondary market, given that they would not get similar returns when reinvesting the funds in new bonds.

Alternatively, if interest rates on newly issued bonds are rising, holders of existing securities that pay lower returns are willing to sell at a discount in order to reinvest the proceeds in the higher paying paper. For banks, financial reporting standards demand that they report the value of their bond holdings held for trading purposes based on current market prices, rather than the historical cost of acquisition.

Therefore, when publishing their financials, they can either indicate an unrealised gain or a loss on their holdings, depending on the movement of bond prices in the Nairobi Securities Exchange (NSE).Banks also hold other securities beyond Kenya government bonds and Treasury bills, whose current market valuations are also factored in when calculating the fair value losses or gains.

These include holdings of sovereign bonds such as the Kenya Eurobonds. However, the fair value gains or losses can only be realised in the event of a sale of the securities, meaning that they do not affect the lender’s net profit so long as they remain in hand.

The risk to the large local banks from the price fluctuations of these securities (known as sovereign exposure risk) is seen as minimal due to their high liquidity and diversified sources of deposits, especially from the large pool of retail depositors, which makes it unlikely that they would need to liquidate the bonds under distress.

Kenyan oil marketers shipped out 48.12 million litres of the condemned petrol to the Demoratic Republic of Congo (DRC) and South Sudan, offering a trail on the movement of the controversial fuel that triggered the ouster of three top officials in the energy sector.

About 39 oil marketers, mainly independents, sold 28.45 million litres of the consignment in DRC and a further 19.67 million litres in South Sudan in June, according to documents tabled in the Senate–which investigated the controversial cargo.

The State ordered the exit of 66.29 million litres of contested petrol from the country and barred oil marketers from selling the cargo, claiming it was illegal and substandard.

The 48.12 million litres was part of the 66.29 million litres of petrol that One Petroleum shipped into Kenya aboard MT Paloma outside the government-to-government (G-to-G) arrangement as emergency stock to avert an outage of fuel in April this year.

One Petroleum had been tapped alongside Oryx Energies to import petrol outside the G-to-G framework, but the State later cancelled the agreement.

Energy and Petroleum Cabinet Secretary Opiyo Wandayi reckoned that the emergency importation of fuel was in breach of supply contracts Kenya inked with

Saudi Aramco Trading Fujairah, Abu Dhabi’s ADNOC Global Trading Ltd, and Emirates National Oil Company Singapore Ltd, arguing that the firms were all ?meeting their contractual obligations.

But oil executives poked holes into the State’s directive, saying that it was unrealistic and a populist move which had raised more questions and one that could see banks become jittery over funding importation of fuel.

KPC told the Senate committee that despite raising the alarm, the fuel still managed to find its way into the market. The pipeline operator said at the time it was impossible to retrieve the fuel that One Petroleum delivered, contrary to Mr Wandayi’s assertions that the fuel was recalled.

Transport hitches along the routes to DRC hindered the exit of the remaining 18.17 million litres from the local market.

‘Disposal of the product in the regional markets has been slower than anticipated due to logistical challenges affecting regional trade flows, particularly disruptions along the DRC transit corridor, which have affected the movement and uptake of DRC-bound consignments,’ the KRA added.

Three top State officials in the energy sector were arrested and later resigned over the deal.

Mohamed Liban, the Principal Secretary for Petroleum, Joe Sang, the Managing Director of Kenya Pipeline Company (KPC) and Daniel Kiptoo, the director-general of the Energy and Petroleum Regulatory Authority (Epra) resigned in April, two days after their arrest.

The condemned cargo was discharged and mixed with existing stocks of petrol in the storage network of KPC, with part of it allegedly sold locally by the time the order to re-route it was issued.

The Mombasa-based One Petroleum imported the consignment and loaded it into KPC tanks between March 27-30.

One Petroleum was on March 19 invited alongside BE Energy, Hass Petroleum and Oryx Energies to bid for the supply of the emergency stocks of petrol.

The winning firms were to deliver the fuel between March 28 and April 2.

Within three days of the award of the deal, One Petroleum secured a vessel owned by BP and headed to Angola. The shipment did not conform to Kenyan fuel standards. One Petroleum then sought waivers on the specifications from the government.

KPA records show that MT Paloma arrived at the outer limits of the port of Mombasa on March 27 at 0230 hours and was brought to berth at Kipevu Oil Terminal 11 at 2042 hours.

It completed discharging the consignment into the KPC storage network at 1212 hours on March 30 and sailed out of the port at 1920 hours.

One Petroleum protested the cancellation, saying that it incurred substantial commercial losses tied to demurrage, customs warehouse rent and inability to liquidate the product at its cost, besides reputational damage.

The firm said that it had not initiated litigation against the State for the botched deal.

‘To date, no penalties or formal liabilities have been imposed on the company by the government arising from the transaction. One Petroleum has not made any claim against the government,’ One Petroleum said in documents tabled in the Senate in June.

One Petroleum was tapped alongside Oryx Energies to supply the emergency stock of petrol in the wake of a decision by Kenya’s top security organ, the National Security Council Committee (NSCC), to import the backup cargoes of petrol.

Documents show that the oil marketers paid Sh5.10 billion in taxes for 61.84 million litres that had been declared for sale locally.

‘Of the taxes paid on the cancelled declarations, approximately Sh2.8 billion has been applied against new customs declarations from subsequent vessels by the affected OMCs collected,’ the KRA said in documents dated June 9, 2026.

‘Accordingly, the MT Paloma consignment remains fully accounted for under customs control.’

I attended this week’s two-day town hall meeting on the health sector at the Kenyatta International Convention Centre (KICC), presided over by President William Ruto and here is my take.

My initial inclination was to dismiss the two-day town hall as yet another PR exercise, staged to let Cabinet secretaries, mandarins and governors dazzle the public with propaganda and pipe dreams about the much-maligned Universal Health Coverage programme and its centrepiece, Social Health Authority (SHA).

Yet as I followed the deliberations closely, what struck me most was the robust discussion, the informed exchanges, and the sheer volume of factual information disseminated about the state of play in the health sector-what is happening in front of our noses and in the real world in our health spaces, but which we refuse to acknowledge.

My biggest takeaway, however, did not come from the speeches and presentations by the large gathering of mandarins and politicians in attendance.

Clearly, personal testimony is a powerful communications tool. Of course, it is not beyond cynical mandarins to ferry ordinary citizens to such events to mouth fairy tales about the successes of SHA.

But any discerning and dispassionate observer following the happenings at the town hall-and keenly observing the demeanour and stories of those ordinary folks-would not conclude that the citizens telling stories about how SHA coverage had settled their medical bills were simply a bunch of fakes.

Among the most moving testimonies was that of John Gikonyo, President of the Renal Patients Society of Kenya and a kidney transplant patient, who described how SHA coverage has helped him and many other renal patients meet the cost of dialysis and related care.

The testimony from the manager of Pumwani Maternity Hospital, and from small health facilities in far-flung corners of Lamu County, describing how SHA coverage had improved their operational efficiency, was also compelling.

Together, these testimonies did more to convey the basic facts about the positive impact of the Universal Health Coverage programme than any official presentation could.

If you want to know whether SHA works or not, don’t ask a politician. Ask your next-door neighbour or relative who has just been discharged from hospital.

Universal health care schemes, wherever they are rolled out, tend to generate friction-and Kenya is unlikely to prove the exception. We should never imagine that SHA will ever be free of controversy.

Part of the reason is structural. Universal coverage requires enormous, sustained fiscal commitment, financed through taxes, payroll deductions or premiums that citizens feel directly in their pockets.

It forces governments into trade-offs between the breadth of coverage, the quality of care and the speed with which patients are attended to-trade-offs that inevitably disappoint someone.

And because health touches people at their most vulnerable, disputes over these schemes tend to be far more emotive and personal than, say, arguments over road contracts or telecoms regulation.

One need only look to the United States and Britain to see how durable this friction can be, even in much older, wealthier democracies.

Sixteen years after Obamacare-the Affordable Care Act-was signed into law, most of the American public now views it favourably, yet opinion remains as sharply partisan as ever.

Roughly nine in 10 Democrats hold a favourable view, against a large majority of Republicans who remain opposed-a chasm that has barely narrowed in over a decade, with fresh disputes over premium subsidies and rising costs still dominating the debate.

Britain’s National Health Service (NHS) tells a related but distinct story. The NHS is one of the most cherished institutions in British public life, and a large majority of Britons still insist it should be free at the point of use, funded through general taxation and available to everyone.

Yet satisfaction with how the service actually runs has been dismal, falling to a record low of just one in five Britons in 2024 and recovering only modestly to about a quarter in 2025, with services such as accident and emergency care and dentistry remaining stubbornly unpopular.

Britons, in short, love the idea of the NHS; they are far less enamoured with its performance.

The lesson from both cases is the same: broad public support for the principle of universal healthcare can coexist quite comfortably with sharp, persistent dissatisfaction-or outright political division-over the way it is implemented.

We should therefore not be startled that SHA has attracted its share of criticism, nor treat every complaint as proof that the whole programme is failing.

The real test, as with Obamacare and the NHS, will be whether Kenya’s policymakers keep listening to both the testimonies and the grievances, and keep adjusting the scheme accordingly, rather than either dismissing the critics or resting on the applause.

A growing number of institutional investors are shifting to innovative off-balance-sheet financing (OBSF) schemes in East Africa, a regional lender said, lured by the rising appetite for infrastructure project funds by governments in the bloc.

OBSF is an accounting practice that structures certain assets or liabilities of governments or corporations so they don’t appear on the balance sheet, therefore creating some financial breathing space.

It involves omitting certain capital expenditures or assets from the balance sheet and is commonly used by businesses that are highly leveraged, especially when taking on more debt means a higher debt-to-equity ratio, which can attract higher interest charges.

‘We have seen a shift from the traditional plain vanilla lending and towards more structured type lending, and we are seeing pension funds becoming very influential in this region because of the financial muscle that they hold,’ Absa Investment Bank’s Director for East Africa, Daniel Odongo, told Business Daily.

‘Kenya has about $ 22 billion thereabouts worth of pension assets; we have half that size (about $11billion in Tanzania), about $8 billion in Uganda, and roughly $3 billion in Rwanda.’

Pension funds in East Africa hold Sh5.7 trillion worth of assets under management.

The region’s pension funds, which have traditionally been concentrated in investing in risk-free government paper, are now driving the appetite for emerging solutions such as securitisation as they seek to rebalance their portfolios and unlock better returns for their investors. ‘Government securities continue to play a significant role as an asset class, and a lot of the pension funds do invest in them.

However, we are seeing a shift in this trend as many look for diversification because pension funds are holding retirement money and therefore have to think long-term and find matching assets,’ Odongo says.

The official said that OBSF has become popular amid pressure for infrastructure capital.

‘Off-balance sheet is really about governments, or even corporates, leveraging their assets to raise financing without having to book in additional debt. Public-Private Partnerships are one case in point. We have securitisation, with a good case in point in the Kenyan market where the Roads Board was able to raise capital on the back of future revenues. So, it’s all about using a predictable source of revenue and using that to actually raise financing today’, Mr Odongo said.

Kenya has recently securitised cashflows related to its Roads Maintenance Levy to unlock financing for settlement of arrears owed to road contractors so as to kick-start projects that had stalled across the country.

The government has also securitised cashflows into the Sports Fund to mobilize Sh44.0 billion worth of financing for the 60,000-seater Talanta Stadium, in Kenya’s first asset-backed listing at the Nairobi Securities Exchange.

The government of Kenya has signaled plans to accelerate payment of verified pending state arrears over the next two years, a stance that potentially signals more opportunity for institutional investors like pension funds looking to tap into alternative asset classes for investment.

‘The Pending Bills Verification Committee reviewed 91,911 claims valued at Sh637.6 billion, recommending settlement of 29,885 claims worth Sh235.6 billion. Sh80.3 billion has already been settled through securitisation, the remaining Sh155.3 billion will be settled over two years beginning 2026/27 through a combination of budgetary allocation and securitization’, National Treasury Principal Secretary Chris Kiptoo said during the launch of the 2027/28 budget cycle.

As at the close of May 2026, Kenya’s stock of public debt stood at Sh12.89 trillion, accounting for 68.8 percent of the country’s Gross Domestic Product (GDP), with domestic debt accounting for Sh7.24 trillion while external debt accounted for Sh5.66 trillion.

Here is an uncomfortable truth: Kenya taught the world how to move money on a mobile phone, yet it still cannot tell you with any confidence how well its hotels are pricing a Tuesday in April.

This is the country that built M-Pesa, earned the name Silicon Savannah, and launched a National Artificial Intelligence Strategy in March 2025 with the explicit ambition of leading the continent. Its tourism sector, the most dependable foreign exchange earner, remains one of the least digitally mature parts of the economy.

The commercial performance makes the gap harder to see, not easier. Kenya generated roughly Sh500 billion in tourism earnings in 2025, welcoming 7.9 million visitors in total. International arrivals rose from 2.47 million to 2.7 million, growth of about nine percent against a global average nearer four percent, and the fifth consecutive year of revenue growth. Kenya is now the most visited destination in East Africa.

Those are genuinely good numbers, achieved substantially without the tools the rest of the industry has come to take for granted.

There is no sector-wide audit of technology adoption in Kenyan hospitality. The nearest comparable evidence on the continent comes from our own research further south, where the 2025 HAMAC South African Hoteliers Report found that while 77 percent of hoteliers said they were actively exploring new technology, fewer than 38 percent were using AI in revenue management and more than a third had no AI strategy at all.

That is a sector collecting brochures and calling it progress. Kenya’s digital economy is more advanced than South Africa’s in several respects, but very little of that advantage has reached the hotel floor.

Globally, hotels using AI-driven revenue management report an estimated 17 percent increase in total revenue against those still relying on traditional methods, and more than 86 percent of hoteliers internationally now depend on AI for forecasting and demand analytics.

BCG’s analysis with NYU found that fewer than 10 percent of hospitality companies worldwide could be described as genuinely ‘future built’ in AI capability, with only a quarter in a scaling phase where strategy begins to generate real returns.

Kenyan operators are not competing against each other. They are competing against that benchmark, and against Egypt and Morocco, both of which are investing heavily in infrastructure, hotel capacity and promotion.

To understand why this matters as much as it does, consider the weight the sector is being asked to carry. The World Travel and Tourism Council put travel and tourism’s contribution to Kenya’s economy at around Sh1.2 trillion in 2025, more than seven percent of GDP, sustaining at least 1.7 million jobs or roughly eight percent of national employment.

The government is targeting 10 percent of GDP from tourism by 2027 and 5.5 million arrivals, ambitions formalised in the National Tourism Strategy for 2025 to 2030.

These are not modest targets. They are the kind of numbers that require the sector not simply to grow, but to become measurably more productive.

Record earnings are not the same as readiness for the next five years. The industry is at a fork. One path leads to competing seriously on the global stage, with the digital sophistication Kenya has already proved it can produce.

The other leads to becoming a beautiful destination with world-class properties and an analogue back end.

The country that taught the world mobile money should not be running its hotels on instinct and spreadsheets, and the window for choosing which path we take is narrowing faster than most people are prepared to admit.

Arrival growth alone will not deliver that. A sector can outperform the global average, break its own earnings record, and still be falling behind on the metrics that determine long-term competitiveness.

This is an industry of national consequence being asked to carry significant economic weight at the very moment it faces one of its most serious long-term risks: a structural gap between digital aspiration and operational reality that, left unaddressed, will compound quietly until it becomes very loud indeed.

Grid fragility is quietly deciding what gets built

The reason this gap exists is not ignorance, and it is not laziness. It is something more structural, and in Kenya’s case it is more subtle than a simple shortage of capital.

On the night of 29 July this year, a technical disturbance on the national grid plunged Nairobi, the Coast, Mount Kenya and parts of the Central Rift into darkness for hours. It followed a near-nationwide outage in December 2025 traced to the Kenya-Uganda interconnector.

The President acknowledged in late 2025 that demand was outstripping supply and that evening rationing was necessary to prevent a wider collapse, putting the cost of expanding capacity toward 5,000MW at around KSh1 trillion.

Ketraco has identified a transmission financing gap of roughly $4.4 billion, while system losses ran above 23 percent in 2025 against an allowable benchmark closer to 17.5 percent.

For a hotelier, every one of those events is an argument for the spreadsheet. Modern revenue management is always-on, cloud-dependent and data-hungry. It assumes continuity.

When continuity is the thing you cannot count on, the rational short-term response is to keep the critical decisions in a system you can run on a laptop with a charged battery, and to spend the available capital on generators, inverters and solar rather than on data infrastructure. That instinct is entirely defensible.

It is also, compounded over five years, how a sector falls behind. When the choice is between fixing what is broken and building what is new, the broken thing wins every time. But while you are fixing it, the world keeps moving.

The capability gap is just as dangerous as the capital gap

Even where a budget exists, the human capacity to deploy technology effectively is often missing. Kenya is unusually well placed here and is not using the advantage. Kenya Utalii College has trained more than 60,000 graduates over five decades and is one of only three African members of the international association of hotel schools. Few countries on the continent have an asset like it.

The National AI Strategy, meanwhile, contains a serious talent development pillar and commits to integrating AI and digital skills into education curricula. Its priority sectors are health, agriculture, education, finance and public service.

Tourism, which delivers more than 7 percent of GDP and 8 percent of national employment, does not appear among them. A country cannot credibly target 10 percent of GDP from a sector it has left off its own AI roadmap.

The capabilities in question are not exotic. They are what is needed to interrogate AI outputs, manage digital systems with confidence, and build the data-informed culture that makes technology investment worthwhile rather than wasteful.

Buying a revenue management system and staffing it with people who cannot challenge what it recommends is not digital transformation. It is an expensive decoration. Graduates arrive equipped for the industry that existed, not the one that is emerging.

We need coordinated action

Kenyan hoteliers are resilient. They have traded through election cycles, security advisories, a pandemic that cut revenues by 70 percent in a single year, and a grid that fails without warning. But resilience is not a digital strategy, and surviving is not the same as competing.

The solution requires action from the entire ecosystem. Government must treat reliable power as a precondition for sectoral competitiveness rather than an aspiration, and should bring tourism formally into the National AI Strategy’s priority sectors, where its economic weight plainly earns it a place.

Training institutions must embed data literacy and digital fluency into every hospitality curriculum as a core requirement rather than an elective. Industry bodies must build the practical capability support and shared frameworks that individual operators cannot develop in isolation.

Two significant changes have taken place at BAT Kenya in recent months. Chief executive Crispin Achola left the tobacco manufacturer after three years at the helm, while the company’s chief financial officer also exited.

Mr Sidney Wafula, who had been BAT’s director of finance for East and Southern Africa, replaced Mr Achola.

Two weeks ago, Mr Wafula oversaw his first financial results since taking charge, with revenue rising five percent and profit after tax growing three percent despite pressure from illicit trade and higher operating costs.

What is your priority as CEO?

My immediate goal is to help with combating the high incidence of illicit trade.

If illicit trade continues to rise, then it becomes quite unsustainable for the business to operate going forward. We have seen the planned closure of the factory in South Africa, where illicit incidence is at 75 percent. Seven and a half out of 10 cigarettes are illicit.

It is unsustainable because you cannot compete. A factory’s efficiency is down to how much throughput comes through it. You have a factory which can deliver, say, 10 billion sticks, but if you are just doing 3.5 billion, your cost base is too high. You are not competitive.

It is also critical because government revenues are under pressure. We estimate that Sh12 billion in taxes, mainly excise and VAT, are not being paid because of illicit trade.

The second priority is continuing to grow modern oral. We acknowledge the harm associated with smoking, and we also acknowledge that it is responsible of us to offer safer alternatives to people who choose to continue taking nicotine.

The third thing is talent. We have gone through changes recently, and it is important that we have strong talent that will deliver on these objectives. The business environment is increasingly complex and dynamic. You need strong people to deliver those results.

Why has government struggled to decisively deal with illicit tobacco?

The opportunity here is to have one, decisive; two, coordinated; and three, sustained enforcement efforts.

We have had some green shoots from government. You read in the press about illicit tobacco being nabbed here and there. The reality is that it is not sustained. That effort is not sustained, it is not decisive and it also isn’t coordinated.

There are quite a lot of agencies that need to be coordinated – security, health and the revenue authority. There is an opportunity to have more decisive and coordinated efforts for a sustained period.

Does corruption form part of the problem?

You are right. Sustained efforts will require you to deal with the root causes, some of which could be corruption.

These sporadic incidents where some traders have been nabbed here trying to cross from Uganda and all that – it is really not decisive. It is not coordinated. It is not sustained. We just need a big, bold move on enforcement because that is the difference.

You have very robust guardrails in terms of regulation today. What is the difference? The difference is enforcing those regulations. What is our biggest illicit problem? It is people who don’t pay taxes. The law is very clear. Enforce it.

How much is Velo contributing to the business at this stage?

It is still one percent of total revenue. We have just restarted the journey in June 2025. We were here before, but because of regulatory uncertainties, we pulled back a bit. The regulatory framework has become a bit clearer, and that is why we came back in 2025.

It is still quite a small, nascent category, but there are plans to grow it. In the medium term, 15 to 20 percent of our revenue should really come from this.

Why is this important? You look at our strategic objective to ‘build a better tomorrow’, and that is really centred on giving our consumers products that have less harm. In our case, it is the modern oral nicotine offer.

Does that mean BAT could revive its modern oral nicotine manufacturing plant in Kenya?

If the conditions are right, I wouldn’t rule out a revival of the factory. A big part of that is just to ensure that there is regulatory certainty, because that was the main reason why we had to pull out of it.

I wouldn’t rule it out. We have already demonstrated in the cigarette industry that we are an export hub, so there is no reason not to do that in modern oral.

But again, a big part of that becomes the regulatory certainty and the competitiveness of Kenya as a manufacturing country.

You said there is more regulatory certainty, but there is also a looming Tobacco Control Bill. How do you view that?

We are seeing more certainty, and that is why we are coming back. But still, with the looming Tobacco Control Bill, what we are trying to put across is that it is important that we have progressive, balanced and evidence-based regulation, certainly around tobacco control, just reflecting the different harm profile of the products.

That is a hurdle we still need to cross. We have to work through it with the regulators by engaging quite transparently and giving them the evidence on why it is important to have regulatory certainty. More importantly, regulation needs to be balanced and progressive. It needs to reflect the profile of the product. I think that will help boost product sales.

What other regulatory headwinds do you see, particularly on taxation?

Based on what I’ve seen over the last three or four years, I’m encouraged by the fact that tax policy on our industry is stable.

There is a clear recognition by government that there is a strong correlation between increasing excise too high and, therefore, government revenue losses.

Why don’t we capitalise on that? For example, say have a three-year roadmap where all manufacturers know for the next three to five years this is what the excise is going to be. With that, we can plan.

If we grow revenue, government grows revenue. The Kenyan economy grows. As simple as that.

How will you engage policymakers?

My approach is simply centred around, firstly, transparency. We have to be very transparent with the regulators.

Secondly, my approach would always be to share my experience. I’ve been in this industry for 20 years, and I’ve worked through different parts of the world. It is my job to share as much as possible – use cases, market research, the paperwork and industry knowledge.

Lastly, it is sharing ideas on what a progressive policy would look like.

For me, it is just openly, transparently sharing my insights and my experience. They have a different view, I have a different view. Let’s share mine, let’s share yours, and let’s come to a conclusion because science is science.

I’m not in politics. I have to accept that. All I can do is share my experience, share the evidence and share proposals, citations, and transparently. I think things never go too far if you are not seen to be transparent.

Homa Bay is in the news for having terrible roads. The Mbita-Sindo road is atrocious, yes. I have a home seven kilometres from where the tarmac ends at Icipe in Mbita and normally have to endure an excruciating 20-minute drive to my little abode, which is a shame because the area is beautiful.

At night, the lake lights up like a city, with the lamps of fishermen out in their boats. Currently, though, it is dry as a bone and leaves carry cakes of dust. Days are hot and stuffy and, because that main artery is dusty and full of rocks, it feels like an oven should you find yourself out there at noon.

Normally I like to take a walk to digest my dinner. Last week, Lady and I walked out just before sunset. After a 20 min walk up a hill that rolls down to Sindo, we followed the music to a bar called Palace Lounge, set in a big compound.

They were playing ajawa, local Luo music, inside the main bar, which featured some booths, plastic tables and chairs. There was some flashy lighting. Young local boys shared small bottles of spirits and occasionally stood up to dance in very coordinated, crouchy, slow rhythms.

‘Everybody can dance in this part of Kenya,’ Lady said. ‘It seems it’s only you who can’t dance.’ I tend to ignore salacious statements.

There was a very natural, unrestrained air about the place. Everybody was having the kind of fun they knew. These were men who worked with their hands and were now rewarding themselves. Nobody seemed to be performing. The music was loud, the dancing beautifully lazy as it should.

Outside, on a patio of sorts, sat a group of made-up girls who looked very badass, the crème de la crème of the village. They had their own massive Bluetooth speaker, listening to their own music, occasionally looking over at the men inside with detached amusement.

There was something natural about it. No curated playlists. No mixologists. No artisanal anything. Just music, modest spirits and people who had finished the day’s work and decided, quite reasonably, that life owed them a little tune.

We had not carried our phones, so when it was time to leave, I told the waiter, who had never set eyes on me before, to take my number. I would send him the money for the bottle of water when I got home.

He did not hesitate. Could never have happened in Nairobi.

Regional paints manufacturer, Crown Paints Kenya Plc, has lost a legal dispute arising from unauthorised painting of a commercial building in Thika with its brands without the property owner’s consent.

The decision sounds a caution to corporates currently in a frenzy to market their brands across the country through mural advertising. Placing physical structures, banners, or paint on a private building without consent violates property rights.

The High Court upheld a Sh3.5 million damages award against the company for using Punjab Engineering Works Ltd’s commercial building for advertising purposes.

The court dismissed Crown’s appeal, finding that Punjab had established trespass by producing its title and photographs showing Crown branding on its commercial property.

The dispute began in 2020 after Punjab, the registered owner of the property, sued the paint manufacturer in the Chief Magistrate’s Court.

Punjab said Crown, through its agents, painted the front of its building for advertising and gained commercial benefit without permission.

Punjab filed the suit seeking a declaration of trespass, general damages, Sh1.4 million in compensatory damages, costs and interest. Crown denied the claim and asked the magistrate to dismiss it.

The case went to a hearing, but Crown did not attend the hearing or call evidence. Punjab’s witness testified that the paint manufacturer had illegally painted Crown Paints branding on the building.

The magistrate awarded Punjab Sh3.5 million as general damages for trespass, plus costs. Crown challenged the decision, arguing that the magistrate had assumed it continued benefiting from the branding and had awarded an excessive amount.

Crown Paint told the High Court that Punjab had not produced any documentary evidence to support their assertion or the Sh1.4 million claimed as special damages. It argued that the appropriate award should have been Sh50,000.

The company also said it had not profited from the paintings and had restored the property to its original condition. It argued that the damages were more serious than supported by legal principles.

Punjab opposed the appeal, saying Crown had not obtained a stay and had partially settled the decree. It argued that the appeal could not be used to delay execution of a valid judgment.

The court rejected Crown’s argument that Punjab had to prove specific financial loss before receiving damages. It said courts can award reasonable damages once trespass is established.

‘It is important to note that once a claim of trespass has been established, the claimant need not prove the specific loss suffered for damages to be awarded,’ the High Court said in the judgment dated July 23, 2026.

The court said the amount of damages may take account of the length of illegal occupation, the nature of the trespass and the trespasser’s conduct.

Crown also argued that the magistrate had improperly treated part of the award as special damages. The

Court rejected that argument, finding that the magistrate had awarded one lump sum rather than tabulated special damages.

The court further found that Crown had failed to rebut Punjab’s evidence at trial. It found no basis to interfere with the award, holding that Sh3.5 million was reasonable after considering the trespass, infringement of the property right, the commercial nature of the building and Crown’s conduct during the trial.

The Chief Executive Officers of the Social Health Authority (SHA) and Public Service Commission (PSC) risk personal court action for failing to implement orders to pay exit packages to employees of the defunct National Health Insurance Fund (NHIF).

The Employment and Labour Relations Court has given SHA Chief Executive Officer Mercy Mwangangi and her counterpart at PSC, Paul Famba, until September 11, 2026, to address the orders or appear in court to explain why they should not be committed for contempt.

The court said that a judgment issued on July 29, 2025, remains valid because the respondents have not obtained a stay. It directed them to compute and pay exit packages to former NHIF employees who opted to retire during the 2023 transition to SHA.

The dispute arose after NHIF was replaced by SHA under the Social Health Insurance Act, 2023. The law provided for NHIF staff to be competitively recruited into SHA, retire, or be redeployed within the public service.

In the July 2025 judgment, the court ordered SHA and PSC to compute and pay an exit package to staff who chose retirement. It also directed that former NHIF employees competitively recruited and absorbed into SHA retain their NHIF salaries unless lawfully varied through consultation, negotiation or applicable law.

The employees returned to court claiming disobedience of those orders and asked the judge to cite the two CEOs for contempt of court and punish them for disobedience.

The court heard that several former employees of NHIF were deployed to SHA and received letters dated November 7, 2025 directing them to declare the conclusion of their temporary deployment to SHA.

They said some employees were subjected to contradictory deployment instructions, denied implementation of terms personal to them, and suffered financial hardship due to the stoppage of salaries without lawful transition.

Ruling on the contempt application, the court said more than a year had passed without the respondents computing or paying the retirement packages.

‘Whereas computation does not require much delay, payment requires the availability of funds,’ the court said.

The court rejected the respondents’ position that the absence of a clear formula justified the delay. It found that a collective bargaining agreement dated December 16, 2022, between NHIF and the Kenya Union of Commercial, Food and Allied Workers provided ‘a sufficient template for computing and paying an exit package upon retirement from service.’

‘The refusal to compute and pay the exit packages to retiring employees is unjustified,’ the court said.

The petitioners, Patrick Kiogora Mwirigi, Angela Kiloko Mutuku and Irene Wanja, had sought contempt proceedings against the two chief executives. They alleged that former NHIF employees had been removed from the SHA payroll, left without salaries or deployed despite choosing retirement. They said that 25 officers received deployment letters despite opting to retire.

The petitioners further alleged that some deployed workers were downgraded without justification and that former employees had not received their dues since October 2025.

The court said the PSC had made ‘considerable efforts’ to comply, but found that SHA had not done enough. It said the two institutions remained jointly responsible for resolving the employees’ claims without delay.

SHA argued that the petitioners had not proved deliberate disobedience and said payroll migration involved several government agencies. It maintained that administrative errors had been addressed.

PSC said it had advised ministries, departments and agencies receiving former NHIF workers to retain their prevailing salaries. It also said employees opting for retirement should receive benefits under the applicable NHIF retirement scheme.

The court noted that PSC is pursuing proceedings at the Court of Appeal against the July 2025 judgment. However, the judge stressed that no stay had been granted.

‘Once a court order has been brought to a party’s attention, there is a requirement to obey it, even when one disagrees with the orders,’ the judge said.

The ruling gives the agencies until September 11, 2026, to resolve the outstanding matters. The court has also allowed the parties to negotiate a consent settlement before the September 23 mention.

A drop in deposit costs and lower loan defaults propelled stronger bank profit growth in the first half of 2026, offering continued boost after a period of expensive funding and elevated credit risk.

Nine of the country’s 11 banks listed on the Nairobi Securities Exchange, which have released their performance results for the six months ended June 2026, posted a combined Sh144.9 billion net profit, up 16.9 percent from Sh124 billion a year earlier.

The improvement comes as banks benefit from a more favourable operating environment in which interest rates have fallen, credit demand is recovering, and the cost of funding has declined faster than lending rates.

The Central Bank of Kenya (CBK) cut its benchmark Central Bank Rate to 8.75 percent in February and has maintained it at that level, down from 13 percent at the start of the monetary easing cycle in August 2024.

That shift is visible in the half-year numbers of KCB Group, Equity Group, Co-operative Bank of Kenya, NCBA, Absa Bank Kenya, Standard Chartered Bank Kenya, Diamond Trust Bank (DTB), Stanbic Holdings and Family Bank, which are the nine lenders used in this analysis.

Interest expenses for the nine lenders fell 7.2 percent to Sh111.6 billion as interest income rose 6.9 percent to Sh391.2 billion. Net interest income increased seven percent to Sh275.4 billion during the review period.

The recovery in asset quality has provided another lift. Gross non-performing loans across the nine banks fell 8.9 percent to Sh554.3 billion, with Equity, Absa and KCB recording some of the biggest reductions in the stock of bad loans.

Equity was the biggest beneficiary of the trend, lifting net profit 31.5 percent to Sh43.8 billion and contributing roughly half of the overall increase in profits among the banks analysed.

The lender’s gross non-performing loans (NPLs) fell 22.2 percent to Sh108.4 billion, while provisions for bad loans declined 11.6 percent.

Its NPL ratio improved to 9.5 percent from 13.7 percent last June following aggressive collection by the lender and what it termed ‘disciplined underwriting, improved analytics and a diversified portfolio.’

KCB, the second-largest profit generator, also combined stronger business with improved asset quality. Its profit rose 14 percent to Sh36.9 billion as gross NPLs fell 7.8 percent to Sh203.8 billion. Its NPL ratio improved to 15.1 percent from 18.7 percent.

‘NPLs improved as targeted resolution initiatives, including recoveries, rehabilitations, full and final settlements, government engagements on associated entities, and strategic write-offs, delivered positive outcomes,’ said KCB.

Co-op Bank and DTB posted some of the fastest profit growth during the half-year. Co-op’s earnings rose 28 percent to Sh18 billion as its NPL ratio improved to 13.9 percent from 17.2 percent, while DTB recorded a 34.1 percent jump to Sh6.4 billion.

However, the improvement in asset quality was not uniform, pointing to the uneven recovery across the banking industry given differences such as the type of clients.

Family Bank was the standout performer on profit growth, with earnings jumping 61.8 percent to Sh3.7 billion. However, its gross NPLs increased 19.2 percent to Sh18.1 billion, making it an outlier in an industry where bad loans generally fell. The rise in gross NPLs saw Family Bank step up provisions for loan defaults by 50.5 percent to Sh998.25 million.

The lender said several borrowers who fell into default due to the disruptions caused by the Covid-19 pandemic are yet to normalise repayments, thereby contributing to the stock of NPLs that drove the NPL ratio to 14.9 percent from 13.7 percent.

‘Our interest is not just to report good numbers. Our interest is also to protect the asset that we are entrusted with by our shareholders and the economy at large. We are very deliberate in ensuring that the required accounting standards are followed,’ Paul Ngaragari, chief finance officer at Family Bank, said.

DTB also recorded a six percent increase in gross NPLs, while that of NCBA rose 5.7 percent. The profit growth of the two lenders was influenced more by stronger lending income, lower funding costs and other revenue streams and less to do with falling stock of NPLs.

StanChart and Absa saw their net profits fall 16.8 percent and 9.8 percent respectively, making them outliers. Stanbic was another outlier, with profit edging up just 1.3 percent despite a 25 percent expansion in its loan book.

The disclosures of the nine lenders signal a sector moving from a defensive phase of managing expensive funding and elevated defaults towards renewed credit growth.

Private-sector credit growth accelerated to 10.6 percent in June, the fastest pace in 28 months, as lower lending rates improved demand from businesses and households.