Category: Business Daily

The Ministry of Roads and Transport has introduced a new minimum compensation per trip for drivers of ride-hailing taxis and motorcycles, triggering a standoff with host platforms amid concerns about a sharp rise in fares.

Official correspondence seen by the Business Daily shows that the ministry is at the tail-end of gazetting the new regulations, which insiders said would nearly double the current base passenger fares of about Sh220.

In a letter to the 18 ride-hailing platforms, the Principal Secretary for Transport Paul King’ori set a July 6 deadline for public participation of the planned minimum pay, with the companies required to suggest their rates.

‘In compliance with Article 10 of the Constitution of Kenya on public participation, please find attached the Draft National Transport and Safety Authority (Transport Network Company, Owners, Drivers and Passengers) (Amendment) Regulations 2026 for your review and comments before finalisation and gazettement,’ Mr King’ori said in the letter dated June 30, 2026.

Industry sources, however, revealed that the ride-hailing firms snubbed the request for submissions after the State failed to reveal its recommended rate for minimum compensation per trip.

Minimum compensation model

‘We kept off the engagement because we feel there is a need for a more comprehensive review of the impact of this decision. The minimum compensation model being fronted by the State is flawed and will kill demand and harm the drivers,’ a senior executive of one of the ride-hailing platforms told the Business Daily.

‘The present base charge on fare is about Sh220, and the State’s move would see this rise significantly. They have declined to make an official disclosure of the rate, though word is that it may be set at between Sh400 and Sh500. This would be disruptive because very few passengers would afford it and the demand side of the equation will suffer heavily.’

A copy of the proposed regulations published by Roads and Transport Cabinet Secretary Davis Chirchir did not contain the minimum compensation rates, fuelling suspicions among the ride-hailing platforms.

Mr Chirchir had not responded to a request by Business Daily for a comment by press time.

‘It is mischievous for the State to withhold the planned rates from us yet expect us to engage it over its plans,’ another industry executive said.

According to the proposed regulations, a transport network company would be required to ensure that affiliated drivers or motorcycle riders get a minimum compensation per trip, exclusive of platform commissions, taxes, levies, fees and other deductions.

‘The prescribed minimum trip compensation shall apply irrespective of distance, duration, dynamic pricing, promotional discounts or any other pricing mechanism,’ the regulations said in part.

‘A transport network company shall not offer promotional or discounted pricing that results in payment below the applicable minimum trip compensation.’

The regulations show that the minimum compensation rates for drivers would be pegged on the engine capacity of their motor vehicles or motorcycles.

For motor vehicles, the payouts would be different for those with a capacity of between 501 and 1,500cc and those above 1,500cc.

Kenya has since 2014 registered a major surge in the number of both local and international taxi-ride hailing app operators or transport network companies(TNCs), especially around key towns, fuelled by a rapidly growing middle-class population, which has significant disposable incomes and access to internet-enabled smartphones.

Data by the Roads and Transport ministry shows that about 35,000 drivers are currently registered on the ride-hailing platforms, with most drivers cross-listed with different apps. On average, they collectively complete approximately 175,000 rides/trips per day across all network companies nationwide.

As part of a strategy to boost the performance of the industry, the ministry targets a new national pricing model for both conventional and ride-hailing taxis, setting the stage for a fresh shake-up for big players in the industry, including multinationals Uber and Bolt.

The State aims to review driver and operator cost structures to determine minimum viable fares, and design a fare structure including the base fare, distance, time rates, minimum fare, and surcharges.

The Transport ministry said the absence of a national pricing policy is fanning chaos amid price undercutting fights among rival taxi companies and operators, as well as widespread complaints about low earnings that often fail to cover key expenses such as insurance, maintenance, and wear and tear.

Capping of commissions

Following complaints by drivers and taxi owners, the Transport ministry, through the National Transport and Safety Authority (NTSA), developed the Transport Network Companies, Owners, Drivers and Passengers Regulations 2022, which contained a bundle of provisions, including the capping of commissions charged by TNCs such as Uber, Little and Bolt at 18 percent.

The capping of commissions has, however, failed to stop the fights among industry players amid conflicting interpretations of the rules.

‘The issue of capping commissions in the ride-hailing industry remains highly contentious –with some ride-hailing drivers and vehicle owners supporting the capping of commissions, arguing that the earnings are sustainable,’ the Transport ministry said.

‘Whilst others, including ride-hailing app owners, argue that capping of commission will be an obstacle to a vibrant free marketplace, thereby reducing investment, discouraging innovations, and ultimately disadvantaging Kenyan consumers.’

Faced with this dilemma, the State now says it plans a new national policy that would attempt to end the fights, hoping to benchmark on other jurisdictions such as South Africa, the EU, the UK, and Singapore.

‘The overall objective is to develop a national taxi policy that provides a coherent, sustainable, and harmonised framework for regulating, managing, and promoting safe, efficient, inclusive, and sustainable taxi services in Kenya,’ the ministry said.

The work plan shows that the State would review the existing taxi policy and regulations for conventional taxi and ride-hailing taxi covering boda boda, tuk-tuks (three-wheelers), and e-bicycles.

Almost every chart-topping Kenyan song released in the past decade has come with a signature dance style. Dance choreography has evolved just as rapidly, and many young Kenyans have built businesses around the art of movement. One of them is Audrey Mukwanja, who goes by the stage name Amuna.

Eight years ago, Audrey was involved in the dance ministry at Citam Thika while also teaching his fellow students at the Technical University of Kenya (TUK) how to dance. Although he was studying urban design, he had just completed an internship, which made him realise that the profession was not the career he was cut out for.

Amuna started by charging Sh50 per person for dance lessons. Soon, students from other universities began travelling to TUK just to attend his classes. As the numbers grew, young professionals also wanted to join, but they could not access the classes because they were held within the university.

In 2019, he decided to move his classes to Nairobi’s Central Business District, where he partnered with Premier Fitness Centre. He named them Artika Dance Studios.

He specialised in Afro dance, teaching popular African dance styles such as Azonto from Ghana, Amapiano from South Africa, Ndombolo from the Democratic Republic of the Congo, among others.

‘I also opened another class at Rosslyn Riviera Mall on Limuru Road to cater to clients coming from Ruaka. Then a friend of mine called Chiluba opened a studio in 2024, so I moved one of my classes to Westlands. They could only give me time slots on days when they didn’t run their own classes. In Westlands, I use the studio on Saturdays. Right now, the main market for the dance class industry is working professionals, so it’s an after-work activity,’ says Amuna, who opened the first dedicated Artika Dance Studios at Adlife Plaza in Kilimani, Nairobi, in 2022.

Anybody who can walk, can dance

Modern Afro dance is hugely popular. Amuna says that in Kenya, the most widely learnt dance styles today are Amapiano, Odi and dancehall.

‘Right now, most of our clients are women. The female dancehall style, particularly waist whining, started gaining popularity last year. Twerk classes are also springing up everywhere,’ says Amuna.

Amuna says he entered the industry at a time when dance classes outside salsa and kizomba were virtually nonexistent. But as the fitness movement has grown, more people have embraced dance as a form of exercise.

‘Anybody who can walk can dance. Over my eight years of teaching, I’ve worked with people who had absolutely no sense of rhythm. There was one Kenyan student who couldn’t keep time at all. I had to start by teaching her how to clap to the beat. Once she mastered that, I realised anyone can learn to dance. You just have to be passionate,’ he says.

He now teaches dance full-time, and his studio accommodates around 60 to 70 students.

Walk-in clients pay Sh1,500 per session, while those who book in advance are charged Sh1,200.

‘But many also opt for the monthly package at Sh8,000,’ he says. ‘The three-month package costs Sh18,000.’

She charges Sh2,000 per session

Antonate Aiko is a well-known Kenyan professional dancer, creative director and choreographer based in Nairobi. She has built a strong reputation in the local entertainment scene through her high-energy performances, distinct fashion sense and artistic direction.

She danced extensively throughout high school and, after graduating, joined a dance company called Art Zone Entertainment to pursue dance professionally.

‘I had to master a variety of dance styles, from ballet and hip hop to contemporary, to understand dance on a deeper level. The company required dancers to learn different styles because we worked on projects that demanded different forms of dance,’ says Aiko.

A professional dancer since 2016, Aiko specialises in African contemporary and street dance and is increasingly being booked for private lessons.

‘Most of the time, my clients are beginners who want to improve their dancing skills or simply ‘vibe’. Some want to dance confidently at clubs or events such as weddings,’ she says. ‘Most amateur dancers ask me to teach them the basic steps of Afro dance, African contemporary, Amapiano and Kenya’s Odi dance. The majority are women, while the rest are young dancers aged between 18 and 25.’

Aiko says women also enjoy learning sensual dance styles.

She charges Sh2,000 per session, with each lesson lasting up to 90 minutes.

Dance has opened many career opportunities for her, including working as a creative director with artistes such as Watendawili, Okello Max and Fena Gitu.

‘One of my biggest milestones has been contributing to conversations about elevating Kenyan dance and putting it on the map. Mentoring younger dancers who want to pursue dance professionally has also been incredibly rewarding. Getting the opportunity to perform on some of Kenya’s biggest stages is something I never imagined would happen so early in my career.’

Shareholders of Savannah Heights Limited, one of the founders of Savannah Cement, want the High Court to halt the delivery of judgment in a petition lodged by their former business partner, Benson Ndeta, challenging his prosecution for alleged Sh4.5 billion bank loan fraud.

Donald Kiboro Mwaura, John Gachanga Kaiganaine and Savannah Heights Ltd want the Constitutional and Human Rights Division to suspend the judgment scheduled for July 8, citing new evidence.

The trio were officials at the cement maker before it collapsed in 2022 under a Sh14 billion debt burden and its acquisition by a consortium of investors in 2025 through a newly registered entity, Savannah Cement 2025 Limited.

Mr Mwaura and Mr Kaiganaine say all parties should first address a pending commercial derivative suit over the governance of Savannah Cement and the approval of the disputed $35 million (Sh4.5 billion) bank loan.

In September 2025, the commercial court issued a ruling that classified some issues as “new and important evidence”, prompting it to set aside its earlier judgment and schedule a fresh one.

The application stems from a constitutional petition filed by Ndeta, former Savannah Cement chairman, seeking to stop his prosecution over accusations that he and co-accused Charles Hill Jr fraudulently secured the Absa Bank loan using forged corporate documents.

The applicants argue that the September 2025 ruling in the related commercial dispute was never canvassed by the parties before the court fixed a new judgment date.

“Given that there is now ‘new and important evidence’ that was previously not on record, it is only fair that the Interested Parties, and the Petitioner and respondents, should they so choose, address the court on the same,” the application says.

In a supporting affidavit, Mr Kaiganaine says the commercial ruling dealt only with whether Savannah Heights directors had received notice of meetings that approved the borrowing and did not determine whether fraud had occurred.

“There remains a question of possible fraud,” he says, adding that the parties should be allowed to explain “why the ruling… cannot be grounds for stopping the Petitioner’s prosecution.”

The affidavit says DCI investigations later recovered extensive banking and corporate records from Absa Bank, including loan offer letters, debentures, guarantees, subordination agreements, board resolutions, land charge documents and correspondence relating to the $35 million loan facility.

According to the applicants, investigators also obtained a corporate guarantee and board resolutions allegedly executed on behalf of Savannah Heights by Ndeta and Charles Hill Jr.

Mr Kaiganaine says Mr Charles Hill Jr “has never been a Director of Savannah Heights Limited” and contends the documents therefore raise “the question of possible fraud on the part of the Petitioner and Charles Hill Jr.”

The affidavit further states that the bank accepted the documents presented by Mr Ndeta when processing the facility.

It says the relationship manager recorded a statement with investigators “admitting that ABSA Bank Kenya Limited accepted the documents as delivered by the Petitioner, enabling ABSA Bank Kenya Limited to issue the facility.”

The applicants also complain they have not been supplied with witness statements and documentary exhibits in the criminal case despite being complainants and despite obtaining court orders directing disclosure.

“Despite the Petitioner having taken a plea, we were not supplied with the witness statements and documentary evidence that was to be relied on during the criminal trial,” Mr Kaiganaine says.

The criminal case accuses Mr Ndeta and Mr Hill of conspiring to obtain the $35 million facility by presenting allegedly forged corporate guarantees, indemnities and board resolutions to Absa Bank between 2017 and 2018. Both deny the charges.

Savannah Cement collapsed under heavy debt and its assets were acquired in 2025 after years of shareholder disputes, lender claims and protracted litigation over the company’s governance and borrowing.

The fee payable to external fund managers for managing assets under the planned Sovereign Wealth Fund (SWF) has been capped at two percent, in a bid to ensure prudent utilisation of funds.

The National Assembly’s Finance and National Planning committee has also amended the Third Schedule of the Sovereign Wealth Fund Bill, 2026 to include a requirement for the disclosure of details of all fees paid to investment fund managers and any other service providers to safeguard the Fund.

‘The annual management fee payable to an investment fund manager shall not exceed two percent of the investment in the qualifying instrument and shall be specified in the instrument of appointment,’ Kuria Kimani, who chairs the committee, said while moving amendments to the Bill.

‘The amendment seeks to provide a capping of the amount paid to an investment fund manager to two percent of the investment in the qualifying instrument. This is to ensure that there is prudent utilisation of funds.’

Mr Kimani proposed the changes during the scrutiny of the Bill in the Committee of the Whole House where MPs scrutinise the proposed law clause by clause and make changes.

The Bill, as drafted by the government, had failed to prescribe the annual management fee payable to investment fund managers.

‘The annual management fee payable to investment fund managers shall be specified in the instrument of appointment,’ the original version of the Bill states.

MPs on July 2, 2026, approved the Sovereign Wealth Fund Bill, 2026 with amendments and now awaits assent by President William Ruto to become law.

The Bill establishes three components: the Stabilisation Fund to cushion against micro-economic shocks, the Strategic Infrastructure Investment Fund to fund national infrastructure development projects, and the Future Generations Fund to preserve wealth for future generations.

Mr Kimani said the committee had increased penalties for individuals who misappropriate any funds or assets from the Fund, or assist or cause any person to misappropriate the funds or assets from two to three years in jail or to a fine not exceeding Sh10 million. The Bill had set Sh5 million as the maximum fine.

‘The amendment aligns the penalty provision to move away from mandatory minimum sentencing while at the same time enhancing the penalty in order to safeguard the Fund and ensure compliance with the Act,’ Mr Kimani, who is also the MP for Molo, said.

The Third Schedule of the Bill sets out responsibilities of an investment fund manager, which include managing assets and other resources of the Fund.

‘The responsibilities of an investment fund manager, appointed by and acting on behalf of the board under the terms of the service level agreement, shall include but shall not be limited to investing assets and other resources of the Fund in accordance with this Act, and the operational and investment guidelines developed under this Act,’ the Bill states.

‘Maintaining records and documentary support for transactions relating to the management of the Fund in accordance with internationally accepted accounting standards.’

The Bill also requires an investment fund manager to submit an annual report of the investment management to the SWF Board not later than two months after the end of the financial year.

It also requires that the reports be accompanied by a certificate signed by the internal auditors of the investment fund manager and a certified investment report on the performance of the Fund.

So far, the Sovereign Wealth Fund will have nearly Sh200 billion that Kenya earned from the mineral sector in the form of royalties, prospecting licences, and acreage leases.

To protect the fund, the Bill restricts the types of investments it can make, barring it from speculative financial instruments such as derivatives, private equity, or commodities trading, and focusing instead on relatively stable investment assets.

It also prohibits the use of the fund to provide loans, guarantees, or credit to government entities, a move aimed at preventing political misuse of the savings.

Any official who makes such investment decisions will be expected to pay back the money if it leads to losses.

The Bill further states that no cash will be withdrawn from the Sovereign Wealth Fund within three months of a General Election, the government has said in a proposed law aimed at shielding the funds from misuse by political patronage.

As a safeguard, the proposed law in the Sovereign Wealth Fund Bill, 2026, requires that cash held in the endowment at least three months before a General Election be certified by its board of management, with a report submitted to the National Treasury and forwarded to the Auditor-General and Parliament for verification.

The standard gauge railway (SGR) line is set be extended into the Nairobi central business district (CBD), closing a crucial last-mile gap that left thousands of commuters disadvantaged by a 20-kilometre travel to and from the current passenger terminal in Syokimau.

The Kenya Railways Corporation (KRC) is hiring a contractor to develop the 15-kilometre line between the Syokimau SGR passenger terminus and Nairobi Central station, which is currently served only by the aged metre-gauge railway (MGR).

The extension will allow Kenyans travelling on the SGR train to Mombasa – and other destinations in future – to board trains in the CBD instead of travelling to Syokimau as has been the case.

The absence of the last mile between the SGR passenger terminus and the CBD has often forced passengers to transfer to the MGR train, matatus or taxis to reach the city centre for final connection to different destinations.

‘The proposed project is strategically important because it closes the last-mile rail gap between the Nairobi SGR passenger terminal at Syokimau and the Nairobi central business district,’ KRC said in a disclosure.

‘This ensures that there is a direct SGR passenger access to the central railway precinct and supporting the wider Nairobi Railway City programme.’

A blueprint seen by the Business Daily shows that the planned project will involve the construction of the 15km railway line, and new separate passenger platforms at the Imara Daima, Makadara, and Nairobi CBD train stations. Passenger overpasses will also be constructed to connect the new platforms and the old MGR platforms.

Currently, the MGR link between Syokimau and CBD passes through Embakasi, Imara Daima, Donholm, and Makadara. The new SGR line is expected to follow the same route, but will have stations only in Makadara and Imara Daima.

A 4km section of the MGR that is prone to disruptions due to flooding will also be upgraded as part of the project, with the installation of up to 10 culverts and the replacement of the steel MGR sleepers to concrete ones.

This is expected to ‘improve the reliability and availability of existing commuter rail services by reducing flood-related disruptions, improving drainage performance, and protecting the track formation,’ KRC said.

The contractor will also be expected to design and construct a bridge over the Mukuru River, and to reconstruct the Likoni bridge.

The project is meant to fit into the planned Nairobi Railway City, a Sh28 billion project by the State-owned corporation meant to transform 13 acres of underutilised land into a modern transit hub.

Currently, the Nairobi Railway City is being designed, and the tender for construction is set to be awarded soon. It is receiving support from the United Kingdom’s Foreign, Commonwealth, and Development Office.

The government has also begun the extension of the railway from Naivasha to Malaba, connecting several cities and towns in the country to Nairobi.

The SGR Phase 2B project will involve the construction of a 263.7-kilometre line to begin at the terminus of the Nairobi-Naivasha SGR and pass through Narok, Bomet, Sotik, Sondu, and Ahero before terminating in Kisumu.

A plan by KRC shows that the project will include modifications of the Kisumu port, including an 8km branch line. It will also entail the construction of two multi-purpose berths (and associated facilities) and workboat berths to accommodate the safe lying of ships.

It comes amid growing use of railway transport to travel in the country, with both SGR and MGR train options gathering pace among travellers over the last few years, as rising fuel prices increase the cost of road transport.

Last year, the number of passengers ferried on SGR rose by 11 percent to 2.7 million from 2.4 million in 2024, earning KRC an extra Sh700 million in revenues.

The MGR, on the other hand, has seen a gradual drop in usage across the country, with the total number of passengers dropping by almost half over the last four years.

Dollar investors in blue chip stocks at the Nairobi Securities Exchange (NSE) earned a return of 18.8 percent in the first half of the year, nearly matching local currency returns as a stable shilling protected their portfolios from currency losses.

Data from the Morgan Stanley Capital International (MSCI) emerging and frontier market indices shows that the NSE dollar return accelerated in the second quarter of the year after share prices of Safaricom and large banks rose by double-digit margins of between 10 and 88 percent.

The MSCI tracks the performance of selected large and medium sized companies in 10 African frontier and emerging markets, as part of its global series of indices that are closely watched by foreign investors.

In quarter one, the NSE’s index had gone up by 0.9 percent, following a dip in share prices in March amid a selloff caused by the jitters over the US-Israel war on Iran.

The conflict hit financial markets hard, triggering an equities sell-off as investors turned to holding dollars as a hedge, fearful of the negative impact of higher inflation due to elevated fuel and food prices.

In shilling terms, the overall half-year return of the NSE -as measured by market capitalisation-was up 27.8 percent, or Sh817.2 billion, to reach a record high of Sh3.76 trillion as at June 30.

However, this was boosted by the listing of Kenya Pipeline Company (KPC) on March 11 and Family Bank Limited on June 23, together adding Sh212.16 billion in new wealth to the market.

Excluding the new listings, the NSE would have ended the half year period with a gain of 20.5 percent or Sh605 billion, which would closely match the dollar returns for the firms tracked by the MSCI.

Kenya’s NSE is represented by 17 companies on the MSCI frontier and small caps indices that are selected based on a number of metrics, including liquidity and financial stability, giving them the exposure to the foreign investors in what helps boost their price discovery.

Safaricom, Equity Group, East African Breweries Plc (EABL), KCB Group, Co-operative Bank of Kenya and Standard Chartered Bank Kenya are listed on the MSCI frontier markets index, as at the most recent review of May 2026.

BAT Kenya, KenGen, Kenya Re, Kenya Power, DTB Group, Carbacid Investments, Bamburi Cement, Jubilee Holdings, CIC Insurance Group, Centum Investment Company and HFCB Group are on the MSCI frontier markets small cap index.

Other countries included on the frontier markets indices are Zimbabwe, Tunisia, Morocco, Nigeria, Senegal, Mauritius and Côte d’Ivoire.

South Africa, which has the largest and most liquid stock market in Africa, and Egypt, are classified as emerging markets by the MSCI. In the half year period, Nigeria and Zimbabwe had the top performing markets on the continent with index gains of 56.1 percent and 48 percent in dollar terms. They were boosted by price gains on banking and commodities stocks respectively, and stronger currencies that handed foreigners an exchange gain on their portfolios.

Tunisia, South Africa and Côte d’Ivoire also outperformed the NSE with respective gains of 42.3 percent, 23.5 percent and 21.3 percent.

Meanwhile, Senegal trailed with a gain of 6.2 percent, as Egypt, Morocco and Mauritius recorded negative returns of 12.7 percent, 7.1 percent and 3.5 percent on weakening currencies.

An appreciating local currency gives foreign investors an exchange gain when valuing their returns, given that they get more dollars upon conversion when exiting compared to their entry cost. In case of a depreciating local currency, they would get fewer dollars for repatriation.

This exchange rate is therefore a key consideration for foreign investors, given that it can either boost or diminish their true returns when compared to local currency returns.

Local pension funds have participated in Kuramo Capital Management’s latest Sh64.5 billion ($500 million) fundraiser, underlining the private equity firm’s diversification of sources of capital away from the US market.

Kuramo told Business Daily that Kenyan pension funds invested in the latest fundraising though it declined to say how much was raised from the domestic market.

The latest fund raiser marks the first local/regional mobilisation and includes inflows from Nigeria’s pension funds, African Development Bank’s Investment in Digital and Creative Enterprises (iDICE) and Lagos-headquartered Bank of Industry.

Kuramo noted that 60 percent of the proceeds generated would be invested within the East African region.

The firm says the fresh capital will help extend the life of existing portfolios including the Wholesale Investment Impact Fund (WIIF), Moremi Capital Management and Kuramo’s Gender-Lens initiative platform which supports women-led businesses.

Kuramo deploys funding through three channels; anchoring funds, direct and impact investments.

The pivot to raise funding from the continent has been forced on Kuramo by liquidity challenges faced by US endowments and foundations, caused by factors including President Donald Trump budget cuts to the mostly research institutions.

Kuramo now sees its next evolution as a firm unlocking African capital for continental opportunities.

‘Kuramo is appreciative of the support provided over the last 15 years by our western endowments and foundation investors as their support enabled the transformation of the African private equity landscape,” said Wale Adeosun, the founder and chief executive officer of Kuramo Capital Management.”

“Kuramo is very excited about its Investment Platform, and progress in mobilizing African capital as it helps drive faster economic growth toward the sustainable development of Africa.”

Since its founding in 2010, Kuramo has catalysed over Sh452.5 billion ($3.5 billion) to Africa private equity firms and businesses, supported over 20 fund managers, anchored over 15 funds and invested in over 200 companies both directly and indirectly.

Kuramo holds equity stakes in local firms and across different sectors including GenAfrica Asset Managers, Platcorp Holdings Limited-the holding company of Platinum and Momentum Credit, TransCentury Plc and investment bank Sterling Capital Limited.

The firm’s gender lens initiative nurtures women-led funds including capacity building, providing working capital and supporting operations.

Shaka Kariuki, Kuramo’s co-chief executive officer and chief investment officer, who has previously spoken of a shift by local capital to support venture funds and private equity, says the pivot by the firm to raise funds domestically will help local pension funds in diversifying their portfolios.

‘We believe that our experience, track record and local networks will strengthen our effort toward mutually beneficial outcomes with our strategic partners and promote impactful investments in the region,’ he said.

The Sh2.8 trillion retirement benefits industry had only Sh299 billion in assets invested in private equity or a 1.07 percent share as of December 2025, against a higher regulatory cap of 10 percent, mirroring limited interest in alternative asset classes by local pension funds as per data from the Retirement Benefits Authority (RBA).

The funds instead have the bulk of their assets invested in government securities at 52.18 percent or Sh1.465 trillion.

Other top asset classes for the pension funds in the period were quoted equities, immovable property/real estate, guaranteed funds and listed corporate bonds.

A big chunk of the country’s installed steel production capacity remains idle despite rising demand driven by a construction boom, fuelled by the government’s affordable housing programme, manufacturers said, highlighting the challenges facing local manufacturers even after years of trade protection.

The Kenya Association of Manufacturers (KAM) says local steel mills are operating at just 36 percent of their installed capacity of 4.2 million tonnes, leaving nearly two-thirds of the country’s production potential unutilised.

Speaking during the opening of the East African Steel Summit in Nairobi, KAM Chief Executive Tobias Alando said Kenya’s steel industry has evolved from manufacturing simple products into a diversified sector producing hot and cold rolled steel, wire products, tubes and pipes, fabricated steel and aluminium products, but remains far from operating at its optimum.

“The industry accounts for about 13 percent of Kenya’s manufacturing sector and contributes approximately Sh34 billion in taxes annually. However, much of the country’s steel production capacity remains unused. The sector has an installed capacity of 4.2 million tonnes but currently operates at only 36 percent of that capacity,” said Mr Alando.

Manufacturers attributed the low capacity utilisation to high production costs, expensive raw materials, cheap imports, declining exports and unpredictable tax policies, and urged the government to introduce measures that would make locally produced steel more competitive.

The appeal comes despite the industry already benefiting from significant trade protection. Kenya imposes a 35 percent import duty on finished iron and steel products-higher than the 25 percent East African Community Common External Tariff.

The government also levies a 17.5 percent Export and Investment Promotion Levy on selected imported steel products to encourage local manufacturing and value addition.

According to KAM, increasing local steel production would enable Kenya to meet growing demand from affordable housing, roads, railways, ports and energy projects while reducing dependence on imports.

The government has identified steel as a strategic industry under the Bottom-Up Economic Transformation Agenda and plans to establish an integrated iron and steel mill at an estimated cost of Sh220 billion over five years.

KAM Metal and Allied Sector Chairman Bobby Johnson said the industry remains central to East Africa’s infrastructure ambitions, urging governments to strengthen enforcement against substandard imports and harmonise standards across the region to create a level playing field for local manufacturers.

Lennox Otieno founded Subleasing Kenya in 2023 when the short-term rental market was highly lucrative. He started with four short stay units, two in Nairobi and two in Mombasa, at a time when few investors had ventured into the business.

‘It was still a niche market. There weren’t as many hosts as there are today,’ he says.

The business grew steadily at that time, largely due to international travellers. Lennox says that around 95 per cent of his clients were foreigners and Kenyans living abroad, many of whom preferred the flexibility and privacy offered by short stay accommodation to traditional hotels.

As demand grew, another revenue stream opened up: some visitors approached him, seeking help to invest in Kenya’s property market.

‘They would ask me to help them buy property, furnish it, and manage it as an short stay. The business model was very sustainable back then, but within a few years, the market changed. Thousands of new hosts entered the sector, bringing competition, which caused nightly rates to go down,’ he says.

Lennox says that currently, the returns are no longer what they were when he first entered the market.

This has forced him to rethink his strategy. He has shut down all his units in Nairobi and has also left Mombasa, choosing to focus on Diani, where he believes demand is more resilient. “Diani is almost purely a tourist destination, so it gives us a better opportunity than competing in saturated urban markets,” he says.

However, setting up an short stay has also become more expensive than it was just a few years ago. Lennox says that he spent around Sh300,000 preparing his first apartment for guests, but subsequent investments have required far larger budgets.

‘None of my properties has cost me less than Sh600,000 to set up,’ he says.

He argues that simply furnishing an apartment is no longer enough. In today’s market, hosts are setting themselves apart by offering additional experiences for profit.

‘For my business, that means offering premium beachfront properties in Diani alongside optional experiences such as curated local tours, while continuing to invest heavily in high-end furnishings and guest comfort,’ says Lennox.

Five years ago, studios in Nairobi’s prime suburbs such as Westlands were rare because such units were often converted into servant quarters attached to larger homes.

However, as short stays, such as Airbnbs gained traction, developers spotted an opportunity in the form of studio, one-bedroom and two-bedroom apartments, which began to appear across neighbourhoods such as Kilimani, Kileleshwa and Westlands.

These apartments were built to target investors eager to tap into the lucrative short-term rental market. This rapid expansion has created a different problem: oversupply.

Nazarene Wangare, the CEO of Zarina Properties, who also works as a property manager, says that the market has become more competitive because these similar units are competing for the same guests.

‘A person paying Sh4,500 is not the same as someone paying Sh1,500. That’s a different market. It changes your clientele,’ she says.

For this reason, she deliberately avoids managing lower-priced listings.

“There are certain types of short stays you’ll never find me selling. I don’t touch anything below Sh4,000 because it comes with a lot of complications. The market becomes extremely wide.’

The impact of growing competition is perhaps most visible on the coast.

Wangare says that she left the short-term rental business in Mombasa when the operating costs became difficult to justify against the declining occupancy rates.

‘It’s difficult to achieve even a 15 percent occupancy rate, and if you reach 20 percent, you have to lower your rates just to break even.’

The same pressures are evident in Nairobi, where new apartment developments are also transforming the market. She points to Riara Road, where multiple projects are being developed within a small radius, each adding to the hundreds of existing apartments.

“If you have four projects within about 500 metres of each other, each with around 400 units, that’s an additional 1,600 units. Before that, there were very few units, so demand was very high.”

The influx is also creating unrealistic expectations among some investors. Wangare cites the case of a client in the US who bought a one-bedroom apartment in Kileleshwa, expecting monthly returns of Sh120,000 to comfortably cover her mortgage repayments.

“That’s already above the market price,” she says.

Instead of chasing ambitious rental targets, she believes investors should focus on occupancy and differentiation.

“If you’re setting up an short stay, you have to make it as stylish as possible to break even, because now you’re competing with more than 400 other owners,” she says.

Although the business has grown to the point of oversaturation, some hosts are proving that it can still be profitable.

One of Wangare’s clients in Kilimani has expanded to four sublet units by negotiating lower rents with landlords, securing apartments with better views and investing heavily in professional interior design.

‘She’s found a competitive edge, and her apartments are normally fully booked through the app,’ says Wangare. Her advice to new investors is to stop relying on Airbnb’s early success stories.

‘The only thing I usually advise investors on is achieving a high occupancy rate,’ she says. “It’s better to take slightly lower rent if it means your unit is occupied. That’s what makes the numbers work today.’

According to data from the market analytics firm AirDNA, Nairobi had 12,870 active short-term rental listings in May 2026 – a 25 percent increase on the previous year. One-bedroom apartments dominate the market, accounting for 63.2 per cent of all listings, followed by two-bedroom units at 25.7 per cent. This reflects investors’ growing preference for smaller units that promise higher rental yields.

Nationally, market intelligence firm Airbtics estimates that Kenya’s short-term rental supply expanded by 40.75 per cent in 2025, with Nairobi adding around 1,840 new listings and Mombasa adding a further 443. This underscores the pace at which the market has grown.

The short stay boom has also altered the country’s residential property market, with investors betting that higher nightly rates would generate stronger returns than conventional leases. This trend has fuelled purchases in prime investment hotspots in Nairobi as well as in other tourism-driven destinations such as Naivasha and the coast.

According to Clive Ndege, Head of Sales at Superior Homes Kenya, one-bedroom apartments have become the preferred investment choice as they strike a balance between affordability, financing accessibility and rental performance.

‘One-bedroom apartments have consistently recorded the strongest demand,’ he says, adding that two-bedroom units have also grown in popularity among investors seeking to attract families, professionals, and corporate tenants.

This, he observes, has translated into a growing demand for mortgage financing. Studio apartments in Nairobi’s established investment corridors currently sell for between Sh4 million and Sh7 million, one-bedroom units for between Sh6 million and Sh10 million, and two-bedroom apartments for between Sh8 million and Sh15 million. Premium developments fetch considerably higher prices.

Despite the growing appetite for property investment, Kenya’s mortgage market remains relatively small. According to the Central Bank of Kenya (CBK), the country has just over 30,000 active mortgage accounts, suggesting significant room for expansion as more investors enter the housing market.

However, as short stay listings have multiplied, so has competition. Ndege says that the market has evolved from being driven by optimism to requiring careful financial planning.

“During its early stages, occupancy levels and nightly rates were exceptionally strong, encouraging many investors to enter the market with optimistic expectations regarding returns and mortgage servicing.

However, as supply has increased, the market has naturally become more competitive. Guests today enjoy a wider choice of accommodation, resulting in greater pressure on pricing, occupancy and service quality,” he says.

Ndege also argues that investors are increasingly recognising that long-term value lies in quality developments, although this shift is also changing investor behaviour.

Rather than chasing short-term gains, more buyers are now evaluating properties for their ability to generate stable income over time.

“Long-term leases provide a steady monthly rental income, making it easier to consistently meet mortgage repayments and reducing the risk of cash flow shortfalls. In contrast, income from short-term rentals can fluctuate due to seasonality, tourism trends, business travel, competition and occupancy levels. Even a few weeks of low occupancy can significantly impact an investor’s ability to comfortably service a mortgage, especially if they have high levels of debt,’ he says.

Beatrice Chege, Absa Bank Kenya’s Head of Mortgage, says the lender has also witnessed growing interest in investment properties over the past five years, particularly in two-bedroom apartments.

Although Beatrice says the bank has not yet observed a notable rise in mortgage restructuring linked to short stay investments, she notes that lending decisions already factor in the risks associated with investment properties.

She says that mortgage underwriting takes such market dynamics into account while maintaining that real estate remains “an alternative investment class” capable of creating balanced investment portfolios.

However, for Ndege, the lesson from the changing short stay market is that investors should avoid chasing short-term trends.

“The fundamentals of sound property investment remain unchanged despite the evolving market conditions: just buy a good property in a good location. Whether you are investing for short stay or long-term rental income, factors such as accessibility, proximity to workplaces, schools, shopping centres and transport networks will continue to influence demand,” he says.

Africa has declared its ambition to become a strong force in the global economy. Governments are investing in infrastructure, digital technology, industrialisation and regional trade while seeking greater influence in international institutions. The aspirations are commendable, but a crucial ingredient is often overlooked: a free and independent media. Without protecting press freedom, African countries risk weakening the foundations required to compete with the world’s leading economies.

The strength of countries that dominate the global stage comes from institutions which encourage transparency, innovation and accountability. Independent journalists investigate wrongdoing, expose wasteful spending and provide citizens with information that enables them to make informed decisions. This creates a healthy environment for governance and economic growth.

Investors pay attention to the quality of information in a country before committing their money. Reliable reporting helps businesses assess risks, understand market conditions and evaluate government policies. Where journalists operate freely, economic information is credible as it is subject to public scrutiny.

Countries where media organisations face intimidation or censorship struggle to convince investors that official data reflects reality. Uncertainty raises the cost of doing business and discourages long-term investment.

Media freedom strengthens public institutions by making leaders answerable to people. Governments that welcome criticism are more likely to identify policy failures early and correct them before they become crises.

Constructive journalism acts as an early warning system, exposing corruption, highlighting public service failures and bringing neglected communities into national conversations. Silencing the press may temporarily protect officials from embarrassment, but it often allows deeper problems to grow unchecked.

Countries competing in AI, financial technology, renewable energy and advanced manufacturing depend on the free exchange of ideas. Innovation flourishes where people are able to question established thinking and debate alternative solutions without fear.