Category: Business Daily

The court ordered Zingo to hand over its premises, management, books, records, keys and other assets to the bank-appointed receiver and manager, Kolluri Venkata Subbaraya Kamasastry.

In the ruling, the court also authorised police assistance to enforce the takeover after rejecting Zingo’s bid to halt enforcement pending an appeal.

‘An order is hereby issued restraining the Plaintiff’s directors, employees, agents, and any other person acting under its authority from interfering with, obstructing, or impeding the second defendant (receiver) in the lawful discharge of his duties as Receiver and Manager of the Plaintiff’s business and assets,’ the court ordered in the ruling dated September 1, 2026.

The ruling followed failed mediation and two applications after the court dismissed Zingo’s earlier bid to stop NBK and its receiver from taking over and operating its business.

NBK said Zingo had defaulted since a 2017 consent acknowledging $5.6 million (Sh733 million), while the company argued enforcement would cause loss.

The dispute began after NBK advanced facilities to Zingo to establish a leather factory on property registered as LR No. 9363/98 and provide working capital.

The facilities were secured by charges of $882,354 over LR No. 209/8628 and $2.2 million over LR No. 9363/98, a floating debenture of $794,000 and directors’ guarantees totalling $3.47 million.

The bank’s representative, Paul Chelang’a, told the court that the company has been in default since the December 20, 2017 consent, which acknowledged an outstanding debt of $5,666,000, and has repeatedly made applications to hinder the lender’s recovery efforts.

He also stated that recent valuations set the forced-sale values of the two properties at Sh661 million, which he said was not enough to cover the outstanding debt. He asserts that the Bank has properly issued the required demand and statutory notices.

Furthermore, he argued that this was the company’s sixth attempt to prevent the statutory power of sale, claiming the application was an abuse of court process, the plaintiff remains in default, and there was no sufficient basis for the orders requested.

An earlier judgment says that a 2017 consent consolidated the debt at $5.66 million and provided a further $1.1 million working-capital facility.

In March 2024, the High Court rejected Zingo’s claim against NBK, holding that the company had acknowledged the debt but disputed how funds were handled.

The court said interest and penalty disputes did not justify withholding the principal. In January 2025, the Court of Appeal declined to stop NBK from exercising its remedies.

The latest dispute concerns receivership and emerged after NBK appointed Kamasastry as receiver and manager in August 2025. He took control of the business on September 1 before an interim injunction issued the following day stopped him. That injunction remained in force until Zingo’s application was dismissed on April 30, 2026.

Zingo filed an appeal and sought another injunction, arguing that the appeal could be rendered useless if NBK proceeded with enforcement. It also asked the court to send the dispute to mediation and allow it to amend its plaint.

The court rejected those requests. It said the April dismissal was a ‘negative judgment’ because it did not require either defendant to perform an executable act.

‘There is nothing arising from the dismissal order capable of being stayed,’ said the judge.

In relation to mediation, the court noted that the dispute had already gone through court-annexed mediation, but a report filed showed that the receiver had declined to participate.

‘Mediation is inherently a voluntary process that relies on the parties’ good faith participation. Given the circumstances, referring the case to mediation again would be pointless and only cause delays in resolving the pending applications,’ the court said.

Mr Kamasastry sought orders allowing him access to Zingo’s premises and control of its business, assets and affairs. He said employees and director Robert Njoka had prevented him from returning after the April ruling. He also alleged resistance despite police presence and a threat involving a firearm.

Zingo denied obstructing or threatening the receiver. It argued that the April ruling merely dismissed its injunction application and did not authorise a forcible takeover. The company said it remained a going concern and that taking control would cause substantial loss.

The court rejected that position and allowed Mr Kamasastry’s application in full. It said the receiver’s appointment had already been upheld and that the September 2025 injunction lapsed when Zingo’s application was dismissed.

‘The Plaintiff’s continued obstruction of the receiver is unlawful and cannot be tolerated,’ the court said. It added that the alleged threat to the receiver’s team was ‘a matter of grave concern’ and could lead to contempt proceedings if substantiated.

The court’s final orders require Zingo and its personnel to give Kamasastry unrestricted access to the properties -LR No. 9363/98 and LR No. 209/8628. They are also required to hand over management, assets, books, records, documents and keys, and must not interfere with his duties.

The Officer Commanding Mwiki Police Station, Infinity Police Post or the Officer Commanding any police station in proximity to the Plaintiff’s premises were authorised to assist if necessary.

Kenya’s refugee and asylum-seeker population hit a record 857,065, with Eritreans and Burundians recording some of the fastest growth over the past decade as the country increasingly becomes a destination for people fleeing conflict, political instability and economic hardship.

The number of refugees and asylum seekers reached 857,065 in June 2026, up 73.2 percent from 494,863 in 2016, according to data compiled from the United Nations High Commissioner for Refugees.

The growth has been particularly pronounced among some of the smaller refugee communities.

Eritreans led with the fastest growth, rising from 1,590 in 2016 to 7,880, representing a 395.6 percent.

Burundian’s had the second-fastest growth. Their number increased from 8,461 in 2016 to 35,048, a 314.2 percent increase over the decade.

The increase in the Burundian population comes at a particularly sensitive time for the community, with hundreds of Burundians seeking to leave Kenya following a government crackdown on foreigners operating small-scale businesses.

Hundreds of Burundians gathered outside their embassy in Nairobi this week, seeking travel documents to return home after President William Ruto ordered a crackdown on foreigners operating businesses.

Some Burundians arrived at the embassy carrying suitcases and other possessions, with some saying they had received threats and feared they were no longer safe in Kenya.

The reports came after the President directed authorities to shut down small businesses operated by foreign traders, although the government later clarified that the enforcement was aimed at foreigners operating without the required permits.

The episode highlights a difficult economic balancing act for Kenya.

Foreign traders form part of the country’s wider informal and small-business economy, providing goods and services to consumers while also competing with Kenyan traders for customers and market space.

The government’s position is that foreigners should not use visitor or other immigration status to enter Kenya and then compete with citizens in small-scale businesses.

But the sudden uncertainty also illustrates how closely migration and livelihoods have become intertwined.

For businesses, the immediate issue is therefore bigger than the departure of individual traders. It raises questions about how Kenya manages the intersection of immigration enforcement, refugee protection, informal employment and regional trade.

Kenya’s refugee population has not simply grown in numbers; its composition has also changed significantly.

Somalis remain by far the largest group, rising from 326,562 in 2016 to 472,470 in June 2026. They accounted for 55.1 percent of the country’s refugees and asylum seekers.

South Sudanese increased from 88,391 to 208,978 over the same period, while refugees from the Democratic Republic of Congo rose from 29,317 to 66,654.

Kenya’s prime office developers have seen their rental yields stagnate at 8.5 percent for the last three years despite rising occupancy levels, as an oversupply of lower-grade offices has kept rental prices flat.

Real estate firm Knight Frank says in its Africa Office Market Review for the first half of 2026 that the average rental price of a Grade A office in Nairobi stood at $13 (Sh1,684) per square metre in June, having remained unchanged since June 2022.

Rental yields have at the same time remained at 8.5 percent since June 2023, even though occupancy levels have steadily risen to 84.8 percent from the post-Covid-19 pandemic low of 71.5 percent three years ago.

Nairobi’s status as a regional commercial and financial hub saw a steady increase in prime office space in the previous decade, as developers sought to satisfy demand from international investors, governments, diplomatic missions and multinational corporations.

Developers primarily targeted Upper Hill and Westlands for new developments, complementing the Nairobi Central Business District (CBD), where accessibility and availability of Grade A offices were limited.

Some of these properties that were put up during the period have now been surpassed in quality by newer developments, reducing their competitiveness in a market where demand growth has slowed down.

The market also shifted significantly due to the Covid-19 pandemic, which upended the commercial property market as many firms adopted remote working arrangements, with the subsequent economic shocks further eating into demand for space.

Other firms also moved to smaller, fitted-out office spaces as flexible working patterns became the new normal. This saw landlords grant concessions on lease renewals, which included lowering or freezing asking rental prices.

As a result of the stagnant rental prices and yields, Nairobi has now become one of the cheapest major African cities in the office market.

The Knight Frank analysis shows that Lagos and Cairo have the highest rental prices at $55 (Sh7,119) and $28 (Sh3,624) per square metre, respectively, with their annual rental yields standing at 10 percent.

Johannesburg has an average rental price of $19 (Sh2,459) per square metre and a yield of 9.5 percent, followed by Lusaka at a price of $18 (Sh2,329) and a yield of 11 percent.

In the East Africa region, the Kampala and Dar es Salaam office markets offer developers yields of nine per cent each, drawn from rental prices of $17 (Sh2,200) and $15 (Sh1,941) per square metre, respectively.

On the other hand, Harare offers the lowest yield among the surveyed cities at just six per cent, with its rental asking price also the lowest at $7 (Sh906) per square metre, as occupancy levels within the city’s central business district stand at 50 percent.

Gaborone in Botswana also lags Nairobi in yield at eight per cent and rent at $10 (Sh1,294) per square metre.

Similar to Nairobi, the other African cities have seen a clear demarcation in demand and prices between top-tier developments and older, lower-grade offices.

Across several markets, occupiers are shifting from congested CBDs to mixed-use and suburban nodes that offer accessibility, parking and integrated amenities.

‘Across most markets that we track, occupiers continue to prioritise high-quality, ESG-conscious and operationally resilient office buildings, reinforcing the continent-wide ‘flight to quality’ trend,’ said Knight Frank.

The High Court has suspended a gazette notice by the Commissioner for Co-operative Development, which appointed three officials to liquidate the troubled Kenya Union of Savings and Credit Co-operatives (Kuscco).

This follows a petition by a Ruiru-based sacco for the State-appointed officers to be dropped and replaced by an independent insolvency practitioner.

The court temporarily suspended the gazette notice until September 28, when the judge will determine whether it has jurisdiction to hear a dispute filed by Rupsa Sacco Society Limited.

‘In the meantime, a stay order suspending the gazette notice is hereby issued, pending the determination of the issue of jurisdiction,’ the court said.

Rupsa NWDT Sacco Society Limited, which says it lost Sh108.8 million following the collapse of Kuscco, challenged the decision to place the union under liquidation.

The sacco moved to court in March 2026 seeking to wind up Kuscco, and the court subsequently issued preservation orders over the union’s assets.

However, on August 28, a special general meeting resolved to dissolve Kuscco. Three days later, on August 31, the Commissioner for Co-operative Development published Gazette Notice No. 13997, purporting to dissolve the union and place its entire estate in the custody of appointed liquidators.

The notice also authorised three individuals to take custody of Kuscco’s properties, books and documents.

Rupsa has challenged the move, arguing that the commissioner’s actions raise questions about regulatory independence and conflict of interest.

‘The continued appointment of a senior officer from the Office of the Commissioner for Co-operative Development to executive office within Kuscco Limited, while the commissioner’s office exercises regulatory oversight over that institution, raises an ongoing constitutional and statutory question concerning conflict of interest, public trust and regulatory independence,’ Rupsa said.

The Ruiru-based sacco further argued that the commissioner did not seek the court’s permission or apply to lift the existing preservation orders before publishing the gazette notice.

‘The issue before the court is not whether the commissioner may regulate co-operative societies. He plainly exercises statutory powers. The issue is whether an administrative act may confer upon persons the power to take custody and control of property which is already the subject of subsisting preservatory orders of this honourable court,’ the Sacco said in submissions filed in court.

Rupsa argued that the commissioner cannot invoke public interest in the regulation of cooperatives to justify defying a court order.

‘An administrative notice cannot do indirectly what a party is prohibited from doing directly. The court’s order does not become optional because the proposed disobedience has been printed in the Kenya Gazette,’ the Sacco argued.

The sacco said that Kuscco is not solvent and that the dispute is not an ordinary regulatory disagreement, citing liabilities of approximately Sh17.7 billion against assets estimated at Sh5.2 billion.

It further claimed that Kuscco is indebted to 177 creditor saccos to the tune of Sh6,166,460,317.

‘The preservatory orders placed the respondent’s (Kuscco) estate under the court’s protective supervision. The Gazette Notice purports to remove that estate from the court’s supervision and place it in the hands of the commissioner’s appointees. That is not regulation. That is interference,’ Rupsa argued.

The sacco also questioned the qualifications of the three appointed liquidators, arguing that none is identified in the Gazette Notice as an authorised insolvency practitioner.

Court documents state that Section 65(3) of the Co-operative Societies Act requires a person carrying out a liquidation to be an authorised insolvency practitioner.

Rupsa urged the court to intervene urgently to preserve Kuscco’s estate and maintain the status quo, pending the hearing and determination of its petition.

‘The circumstances warrant the urgent intervention of this honourable court to preserve the respondent’s estate, maintain the status quo established by the subsisting orders, and prevent any further steps pursuant to Gazette Notice No. 13997 pending the inter partes hearing and determination of the Petition,’ Rupsa said.

Kenya’s manufacturing sector has steadily worked to deepen its contribution to the economy while enhancing its local and global competitiveness. This progress has been driven by sustained investment, innovation and a strong commitment to creating jobs, generating value and supporting inclusive economic growth.

Manufacturing is the single largest contributor to Kenya’s tax base. Data from Kenya Revenue Authority (KRA) shows it contributed Sh460 billion in 2025/26, accounting for 16.2 percent of total revenue collected. When manufacturing grows, the benefits extend beyond factories and supply chains and translate into jobs, incomes, investment and government revenue.

These figures indicate what Kenya could achieve. With the right policy environment to reward investment, boost competitiveness and enable businesses to grow, the sector could contribute even more. Therefore, the question is how Kenya can create the conditions for manufacturing to realise its full potential.

The introduction of excise duty under the Finance Act, 2026 on key industrial inputs including industrial sugar, particleboard and medium-density fibreboard (MDF), raises concerns for the manufacturing sector.

At a time when Kenya should be looking to strengthen the competitiveness and productive capacity of local manufacturers, increasing the cost of essential inputs risks working against that very objective.

Other critical inputs, including printing inks, resins and kraft paper, continue to attract high excise duties despite being essential to industries such as beverages, confectionery, furniture, packaging and printing.

Importantly, all these products are raw materials or intermediate inputs into domestic manufacturing. Imposing heavy taxation at the input stage represents a fundamental distortion of sound fiscal and industrial policy, which should seek to protect and promote local value addition.

While fiscal policy remains an important instrument for revenue generation, additional excise taxes significantly increase production costs which are ultimately passed along the value chain. Because these costs are non-claimable, they place additional pressure on manufacturers, eroding export competitiveness and potentially reversing trade gains by making imported goods more attractive.

Some provisions were not part of the Finance Bill, 2026. Clauses on wood-based panels such as MDF and industrial sugar did not benefit from the same level of stakeholder engagement as the others during the public participation process.

The provision on excise duty on wood-based panels was introduced through a Supplementary Order Paper during the later stages of the Parliamentary process. Industry players along the affected value chain and Kenyans had no opportunity to assess the proposals, quantify their potential impact or provide feedback on measures with significant implications.

The Departmental Committee on Finance and National Planning later recommended a process of local capacity verification, but the period before the Second Reading was short, posing a challenge in conducting a comprehensive assessment.

The increase in excise duty on imported sugar from Sh7.5 to Sh40 per kilogramme, a 433 percent increase, is a significant and disproportionate policy change for local industry.

While the objective of promoting local value addition and supporting domestic sugar production is commendable, this is set to drive up the cost of industrial sugar, a critical input for manufacturers of beverages, confectionery, pharmaceuticals and baked goods.

For manufacturers that rely on industrial sugar, the higher duty is expected to drive up production costs, affecting competitiveness in domestic and export markets where margins range from 3-5 percent. The effects will reverberate across interconnected sectors in packaging and logistics.

Kenya currently has limited capacity to produce industrial-grade sugar at the scale and specifications required by manufacturers and rely on imports.

Unlike household sugar, industrial sugar serves specialised manufacturing needs and does not directly compete with locally produced sugar. A sharp increase in taxation may not immediately encourage import substitution but could instead raise the cost of production for manufacturers.

A more balanced approach would be to support the gradual development of local industrial sugar capacity while ensuring manufacturers retain access to competitively priced inputs during the transition.

The 30 percent excise duty on wood-based panels risks reversing policy measures that previously supported the growth of the furniture industry. In recent years, the government has deliberately created a tax differential between imported finished furniture and raw materials used by local manufacturers.

This approach helped make local production more competitive, encouraged investment in furniture manufacturing, created jobs and supported the expansion of furniture exports into regional markets.

The introduction of additional excise duty on wood-based panels and related inputs could erode these gains and eliminate the competitive advantage that has enabled the sector to grow.

Subsequently, making imported finished furniture comparatively more attractive and potentially discouraging further investment in local manufacturing. Government has, without intending to, protected the foreign manufacturer’s cost advantage rather than the Kenyan manufacturer’s market.

Modern manufacturing systems globally rely on integrated supply chains that combine locally produced and imported inputs to achieve efficiency, quality and scale. Additional excise duties on key imported industrial inputs could inadvertently weaken the competitiveness of local manufacturers.

The proposal also comes at a time when Kenya is actively promoting industrialization, regional trade integration and export-led growth through various trade frameworks. Manufacturers have made investment decisions based on a policy environment that encourages value addition and regional competitiveness.

Any significant increase in the cost of key production inputs should be carefully assessed to ensure it does not unintentionally undermine these objectives.

While excise duty is intended to be a neutral domestic tax applied regardless of a product’s origin, its practical impact can sometimes differ depending on how it affects production costs within a value chain. Where taxes significantly increase the cost of essential inputs, they inadvertently reduce manufacturers’ ability to compete against finished products entering the country.

A balanced policy approach should support the development of local input industries while preserving the competitiveness of downstream manufacturers. By maintaining a predictable and growth-oriented investment environment, Kenya can continue to strengthen its manufacturing base, expand exports and advance broader industrialization ambitions.

As the country continues to position itself as a regional manufacturing hub, domestic policies need to align with these broader economic objectives.

Excise duty is not a tool of industrial protection. Its increasing application on raw materials and intermediate inputs represents a fundamental misapplication of the tax. We must carefully assess the broader implications of taxation measures on strategic manufacturing inputs.

Dangote Industries Limited, led by its Vice-President for Oil and Gas and ultimate beneficial owner, Aliko Dangote, has formally communicated a proposal to construct a greenfield 700,000 bpd petroleum refinery on Lamu Island, Lamu County.

Preliminary site selection, geotechnical soil testing, and Front-End Engineering Design (FEED) work are already under way.

Groundbreaking is targeted before end of this month, with a construction window of three to five years.

Lamu is a Unesco World Heritage site holding over 41 percent of Kenya’s total mangrove value, extensive coral reefs, and marine breeding grounds on which thousands of artisanal fishing households depend.

Kenya’s Courts have twice intervened decisively in comparable Lamu infrastructure projects, halting a coal plant’s environmental licence outright and awarding Sh1.76 billion in compensation over the Lamu Port project, each time for the same underlying failure: inadequate strategic and environmental impact assessment (SEIA), and public participation treated as a formality rather than a constitutional obligation.

A project of this scale cannot survive the same mistakes.

This proposal sets out how Government should approach the project so that it is bankable for the investor, defensible in court, and beneficial to the people of Lamu. All these three objectives are inseparable.

Three factors elevate this from a routine investment approval to a sui generis whole-of-government undertaking.

First, its Costing of Sh2.2 trillion makes it larger than several recent national budgets’ entire development expenditure, and will require Parliamentary-level, land, fiscal and treaty instruments, not ministerial sign-off alone. The approvals will cut across many Ministries, State Departments, State Corporations and Lamu County.

Secondly, that it is located in Lamu Archipelago, a Unesco World Heritage Site with Mangrove forests valued at Sh3.96 billion per annum and representing 41.5 percent of Kenya’s total mangrove value; the surrounding waters are breeding grounds for fish stocks that sustain the local artisanal fishing economy.

And thirdly, the Government has already lost one Lamu energy-infrastructure licence in the courts (the Amu Power Coal Plant). The Government also paid out Sh1.76 billion in compensation over the Lamu Port project, on nearly identical procedural grounds. The legal system has already told Government, in binding terms, what it must do differently this time.

The project will require approvals from inter alia the following laws, Petroleum Act, Energy Act, Environmental Management and Co-ordination Act, Special Economic Zones Act, Land Act, Physical and Land Use Planning Act, Government Owned Enterprises Act, Water Act and Occupational Safety and Health Act.

For the project to surmount Political, Legislative, Bureaucratic and Legal mine fields, the following need to be done: –

Establish an inter-agency and inter-ministerial Regulatory Secretarial that will be jointly chaired by The Attorney General and the Cabinet Secretary, Energy. The Secretarial will house all the applicable regulatory bodies, agencies and Lamu County.

To avoid delay, design the site boundary and it will involve mangrove area, wetland, riparian and beach frontage

Commission the Strategic Environmental Assessment before any project levies licence.

Initiate a public participation process that will survive Lamu Coal Project Court scrutiny.

Structure public compensation way before displacement begins.

Make local content and CSR commitment specific and enforceable.

A Host Governor Agreement has to be detailed enough that will provide in the long term, fiscal, operational and legal certainty.

An implementation Roadmap is required that will set out all the sequential steps from foundation until completion. This will cover statutory and legal approvals, public participation, commitment and legal costs et al.

If the above sequential steps are not followed, a loophole will be opened for litigation by way of Constitutional Reference in the High Court or Injunctive Orders in the Environment Court. The Government is forewarned how to make its biggest investment yet realisable and open doors for similar big-ticket investment. How we handle Dangote Refinery will be boon or boon to our future economy.

On July 1, the Finance Act, 2026 came into force. On August 21, barely 52 days later, the Scrap Metal Council (SMC), through its chairperson, issued a desperate press release.

The Council noted:” Increase in the number of dealers operating without valid licences… cases of importation and exportation of scrap metal without the requisite permits… increasing cases of illegal exportation and smuggling of lead-acid batteries whose export is currently prohibited.”

The council is not complaining about a market glitch. It is documenting the collapse of a regulatory regime. And he is right.

The Finance Act, 2026, by exempting scrap metal from Valued Added Tax (VAT), has not formalised the sector. It has criminalised it. KRA must be told: You cannot use exemption to formalise an informal sector. Exemption does the opposite – it informalises a formal sector.

Two radical amendments were sneaked in under the guise of “expanding the tax base. The first was the VAT Act, Cap 476 – First Schedule, Part I, Section A – Paragraph amended by Finance Act, 2026, Section 31: Scrap metal was inserted as an exempt supply. Effect: 16 percent VAT removed. Supply becomes VAT-exempt.

Secondly, Income Tax Act, Cap 470 – Section 35 and Third Schedule – as amended by Finance Act, 2026, Section 14: Introduction of withholding tax (WHT) at 1.5 percent on the gross amount payable on sale of scrap metal for both residents and non-residents. On paper, this looks like tax relief. In law and economics, it is a disaster.

While defending the changes, the National Treasury argued this would increase revenue but now the opposite is true. The law is now bleeding the exchequer in three ways:1. The Input VAT Trap – VAT Act Sec 17(1) and Sec 17(6):

Section 17(1) of VAT Act is explicit: “input tax… may be deducted… but only to the extent that the supply was acquired to make taxable supplies.” Section 17(6) further provides that input tax relating to exempt supplies is not deductible.

Millers now load the expense again onto steel billets, reinforcement bars and wire products. Result: Price has increased by 50 percent and Kenyan steel is now more expensive than Tanzanian or Ugandan steel. KRA lost the 16 percent output VAT and replaced it with a 1.5 percent WHT that it cannot even collect.

The 1.5 percent WHT is uncollectable because 60 percent of collectors have no PIN and thus iTax cannot generate certificate.

The Act assumes every scrap seller has a KRA PIN. The reality is that over 60 percent of collectors are informal – mama karanga collectors, mkokoteni operators, jobless youth. The iTax withholding module cannot generate a certificate without a PIN. So buyers either don’t withhold and risk penalties under Tax Procedures Act, 2015, or they withhold and cannot remit.

Revenue is now being lost due to lack of trail. Unlicensed dealers now smuggle scrap and lead-acid batteries (whose export is prohibited under Legal Notice No. 94 of 2022) through porous borders. SMC confirms this. The five percent export WHT + VAT on imported scrap vs 1.5 percent WHT on local exempt scrap creates a loophole for round-tripping. Treasury loses both VAT and customs duty.

The road infrastructure has now come under serious threat courtesy of the legal changes. The government seems to have forgotten why Scrap Metal Act, No. 1 of 2015 was enacted in the first place. It was not a revenue law. It was a security law, enacted after KPLC transformers, Telkom copper, Kenya Railways lines and others were vandalised.

The 2015 Act bars people from dealing in scrap without a licence and a licensee shall not deal in scrap except between 6:30am – 6:30pm. Section 21 of the Act bans disposal, disfiguring or baling of scrap within seven days of acquisition without PS permission. This is meant to allow inspection for stolen property.

VAT was the invisible enforcement mechanism for these sections. To claim VAT, you needed a valid SMC licence, a seller’s ID copy, PIN, proof of origin, weighbridge ticket, and you had to keep records for three years.

Exemption has removed that entire audit trail and today, “anybody can sell the commodity to the millers.” No invoice needed. No PIN. We have made vandalism more ‘lucrative’.

The legal changes also expose a government that easily forget history. In 2020, former President Uhuru Kenyatta imposed a moratorium on scrap metal dealing after infrastructure vandalism hit crisis levels. The sector was shut for 4 months. Legitimate dealers and steel mills bled billions. It was only reopened after SMC was strengthened and VAT enforcement was tightened.

Sadly, we are now repeating the same mistake, but worse. We are using exemption – a tax tool meant for social goods like medicine and education – to regulate a sensitive security sector.

The National Assembly, National Treasury and KRA should immediately reverse the VAT exemption vide Finance Act, 2026 and return scrap metal to standard rate of 16 percent under VAT Act, or at minimum zero-rate it to allow input VAT recovery under Section 17(1).

The 1.5 percent WHT should be retained but as advance, creditable tax, and enforce at a single point – the miller or exporter – as final purchaser, to avoid cascading. iTax should be linked with SMC Licensing Portal – No WHT certificate or PIN activation for scrap dealing without valid SMC licence.

The Finance Act, 2026 meant well but handed Kenya’s critical infrastructure to vandals and economic Bandits on a silver platter. Parliament must act before we need another moratorium. And next time, the moratorium will not save us.

The gap between what banks operating in Kenya charge on loans and pay on deposits narrowed to a 10-month low of 7.46 percentage points in July as lenders strike a balance between appeasing borrowers and attracting savers.

This means that the financial institutions are earning less profits on loans than before, with those having smaller non-interest income feeling the biggest pressure.

Central Bank of Kenya (CBK) data shows the spread, which measures the difference between the average lending and deposit rates, fell from 7.53 percentage points in June and 7.86 points in February, when it hit the highest level in nearly 10 years.

The July reading was the narrowest since September last year when the spread stood at 7.44 percentage points.

The latest figure marks the fifth straight month of narrowing spread, marking a reversal from the period between June last year and February last year when it was widening month-on-month.

The narrowing spread came as banks raised the average rate paid on deposits while keeping lending rates largely stable, pointing to rising competition for customers’ savings even as they heed to the CBK drive to offer loans at rates linked to the Central Bank Rate (CBR).

CBK and customers have been demanding lending rates that mirror the reduced CBR. On the other hand, banks have been cautious in cutting deposit rates sharply to avoid losing deposits to competing investment options such as money market funds and equities in a year the Nairobi Securities Exchange (NSE) has seen more than 40 percent gain.

Concerns about the mismatch between lending rates and CBR had prompted CBK Governor Kamau Thugge to intervene more directly through moral suasion and threat of daily fines to improve rate transmission.

The movement in rates comes as the CBK maintains its benchmark CBR at 8.75 percent after cutting it by 75 basis points in February from nine percent.

The CBR has remained unchanged since February as the regulator assesses the impact of earlier monetary policy decisions. The next meeting to decide on the current rate is set for October 7.

The average lending rate rose marginally to 14.39 percent in July from 14.37 percent the previous month. In contrast, the average deposit rate increased to 6.93 from 6.84 percent over the same period.

Earlier, the decline in the lending rate had been more pronounced compared to the movement in deposit rates. The average lending rate fell from 16.64 percent in January 2025 to 14.39 percent in July this year, a reduction of 2.25 percentage points.

In the same period, the average deposit rate declined from 10.05 percent to 6.93 percent, a 3.12 percentage-point drop.

The wider spread recorded earlier in the year was partly a result of deposit rates falling faster than lending rates. The gap peaked at 7.86 percentage points in February before beginning a gradual decline.

The latest data offers some relief to borrowers when compared with 2024 levels. The average lending rate reached a recent high of 17.22 percent in November 2024 as banks adjusted their pricing to reflect tighter monetary conditions and higher funding costs.

Lending rates have been softening as the CBK shifted towards monetary easing. Last year, the regulator cut the CBR six times, building on the easing that started in August 2024 when the rate was cut from a nine-year high of 13 percent.

The reduction in lending rates has been accompanied by a gradual recovery in demand for credit, after high borrowing costs and economic uncertainty weighed on loan growth.

For savers, however, the decline in deposit rates means returns on bank deposits have continued to fall from the highs recorded during the period of tight monetary policy.

The average deposit rate stood at 11.48 percent in June 2024 before declining to 8.37 percent in June last year and 6.93 percent in July 2026.

Last year, CBK reviewed the risk-based pricing framework, establishing a common base lending rate for all banks, based on the overnight-interbank lending rate, renamed the Kenya Shilling Overnight Interbank Average (Kesonia).

Kesonia is closely tied to the CBR under the interest-rate corridor framework, where overnight lending rates for borrowing between banks are held at no more or less than 0.75 percent of the benchmark.

The total cost of credit to a borrower equals Kesonia plus a premium denoted as K, which is determined according to the risk profile of every customer, but also factors in bank margins plus expected returns to shareholders.

The government is seeking an extra Sh650 million from the Treasury in the next budget for the former President Uhuru Kenyatta-era Uwezo Fund, citing increased demand for its loans despite falling disbursements and weak repayment.

The State Department for Micro, Small and Medium Enterprises (MSME) Development says demand has increased following public awareness and sensitisation campaigns, creating pressure for additional financing despite the Fund’s declining disbursements.

The Uwezo Fund was established in 2014 under Mr Kenyatta, who honoured a pre-election pledge to use the budget for the repeat presidential vote to provide affordable credit to women, youth and persons with disabilities at constituency level.

There was no repeat presidential election after he, then deputised by the current President William Ruto, got more than 50 percent of the total votes in the first round.

Cumulatively, 82,957 groups out of more than 115,000 applicants have received interest-free loans, the MSMEs department says, leaving 32,043 groups that applied without financing.

‘As a result of the increased demand for loans due to enhanced public awareness campaigns and sensitization, the Fund is requesting an additional Sh650 million to cater for the deficits and in support of new product targeting priority value chains,’ the department said in the draft medium-term expenditure framework report for 2027/28-2029/30, currently undergoing public participation.

‘The funds will also cater for the capacity building of the beneficiary groups, which is a mandatory requirement before they are issued with the loans.’

Uwezo has already expanded beyond its traditional lending model through Wezesha Majuu, which supported 221 young people with Sh35 million for youth labour mobility.

First-time borrower groups access between Sh50,000 and Sh100,000 under the Wezesha loan product, rising to Sh500,000 for repeat borrowers under the Endelea Product.

Uwezo also offers a maximum of Sh500,000 to groups of three members with job offers abroad to meet costs for visas, tickets, and settlement costs, which supported 221 young people with Sh35 million under the Wezesha Majuu loan product in the year ended June.

The proposed Sh650 million injection will also support a new value-chain lending product, although the government has not disclosed the sectors targeted or the number of beneficiaries expected.

The plan for additional funding comes as the State-sponsored credit programme struggles to turn growing interest into actual financing, with lending falling below the government’s annual target since the Ruto administration took office.

Uwezo disbursed Sh312 million in the year ended June 2026, a fall of 26.6 percent from Sh425 million a year earlier and falling short of the targeted Sh600 million by nearly half, or 48 percent.

The report further shows that the rate of recovery for loans issued was 44 percent last fiscal year, a slight improvement from 42 percent but still below the government’s 45 percent target for that period.

Uwezo Fund’s ability to meet rising demand has been undermined by weaknesses in its grassroots management and loan recovery structures in recent years.

The MSMEs department says the tenure of most Constituency Uwezo Fund Management Committees (CUFMC) has expired, disrupting operations and making it harder to recover loans from beneficiaries.

‘In the absence of a functional CUFMC, the recovery is affected,’ the department says.

The Fund is also facing staffing gaps in some constituencies after several Youth Development Officers, who serve as committee secretaries, retired.

The Ruto administration is betting that additional funding and technology can help revive lending while improving the management of the Fund.

Uwezo has fully digitised its loan application and management systems, allowing beneficiaries to apply for loans and manage repayments electronically.

The Fund has also been onboarded onto eCitizen for loan applications and repayments, reducing reliance on physical processes at constituency offices.

The department says digitisation will increase access among the target population and improve management, although the report provides no evidence yet that technology has raised lending or recovery.

Richard Kimenyi tried retirement. Then he tried consultancy. Neither felt suitable for him. And so, nine years ago, he stepped out of retirement. At 77, Kimenyi has no plans to leave the stage.

The stage, in his case, is the hotel business, where he has spent more than five decades and still prefers the demands of day-to-day management to sitting in a boardroom. He likens hoteliers to rock stars: ‘Good hoteliers are like rock stars,’ he says.

Today, he is the country manager for Hemingways Collection in Rwanda, overseeing the Hemingways Retreat Kigali – a boutique hotel – among other businesses.

‘When I retired from Fairmont [in 2015], I wanted to do consulting,’ he says. ‘But for me, consulting is to get involved and see how the organisation is being run. I’m a hands-on person.’

Very few of his peers remain in active management, particularly in the corporate world, rather than dispensing advice from the boardroom.

‘They might be doing consulting,’ he says of some of the contemporaries that have, like him, been in the hospitality industry since Jomo Kenyatta was president. ‘But for me, I enjoy it this way.’

Eye for detail

Age has done little to blunt his curiosity or his eye for detail. He still enjoys spotting what employees miss, pointing it out and, perhaps most importantly, watching a younger employee learn from it.

‘If I see something, tomorrow I’ll come there and tell the staff, ‘I saw this.’ Some of them wonder how I see these things,’ says Mr Kimenyi, whose Rwanda assignment came after he had spent more than eight years with Hemingways in Nairobi.

‘This is my ninth month [in Kigali],’ he says.

He recalls that in 2025, when the Hemingways CEO offered him a choice between Kigali and Watamu, his answer was immediate.

‘I didn’t even hesitate,’ he recalls. ‘I’d heard about Kigali; the order and all that.’

Kimenyi joined the hospitality industry in the early 1970s after leaving the Prince of Wales School, now Nairobi School.

Hilton Hotel, then under the Block group of hotels, was recruiting 10 Kenyans for overseas training.

‘I was fortunate to be one of those who were taken by the Hilton. I went to West Germany where they do training in a sort of polytechnic, and then they do practicals,’ he says, adding that he later trained in Britain and Israel.

‘My interest was always food and beverage,’ he adds.

Upon his return to Kenya, he worked at various establishments owned by the Block group, among them Outspan, Tree Top and the New Stanley.

‘At the New Stanley Hotel, I was the first Kenyan food and beverage manager,’ he recalls, adding that the Block group also sent him to Lesotho, where he was in charge of food and beverage for their three hotels there.

Career-defining moment

When he returned to Kenya, he was posted to the Norfolk, which was another business under the Block group. The Norfolk would define his career.

‘I came back to Norfolk, which I ran for 33 years,’ he says.

At the end of his stint at the Norfolk in 2015, he considered himself retired. Between then and 2017, when he joined Hemingways, he briefly consulted with a local hotel chain.

‘For over eight years, I’ve been with them [Hemingways Group],’ he says. ‘I enjoyed running the Nairobi and Watamu hotels, and we even opened Eden [a luxury residence in Nairobi’s Karen Estate].’

His long career as a hotelier has taken him to many places and enabled him to meet many people.

‘I’ve travelled nearly everywhere. When I was with Fairmont, I would go to world travel markets: the UK, Berlin, the US.  About two years ago, I went [to sample] Gulf food with a chef. That’s where you go to see the new trends. That has really helped me a lot,’ he says. ‘I have met very many people; people with influence.’

Brush with death

There have been a few brushes with death too, among them the December 1980 bombing of the Norfolk.

‘I was in the main dining room when I just heard a blast. The next minute I saw myself on the floor. The white jacket I was wearing was ripped off,’ he recalls. A colleague nearby, he says, was not so lucky and his remains could only be identified by his wedding ring.

He also survived the 1982 attempted coup, which saw massive bloodshed not too far from the Norfolk.

In his many years as a hotelier, he has come up with principles that he operates by. One of them is always embracing new ideas.

‘You keep the traditions, but come up with timely innovations,’ he says. ‘I’ve made Google my friend. I even tell the [staff], ‘Let Google be your friend.’ You can learn a lot.’

He rejects the stereotype that older managers cannot work with younger employees.

‘To me’, he says, ‘Gen Z is what we were during our time. We were the Gen Zs of our time – from fashion to career orientation. They’re go-getters, and that’s something I really enjoy.’

Hotels poach staff he has trained, but he treats the departures as proof of progress.

‘I’m proud because they may get a bigger position and more money. When they move, they open another avenue for somebody else to come and learn with us,’ he says, adding that his formula is simple: ‘You empower them and instil integrity, teamwork and respect.’

When it comes to retaining staff, he says little matters more than how people are treated. ‘The first thing I always look at is staff facilities: where they are changing, uniforms and, above all, meals,’ he says. ‘We give them very good food. You invest in people.’

Hungry staff, he adds, will ‘casual eat’ in the course of work.

‘You get casual eating if the people are hungry, and it happens a lot,’ he says. ‘You need to take care of your staff first. They’re human like you. Treat them the way you’d like to be treated.’

Building the Kigali brand

In Kigali, Mr Kimenyi is trying to blend Kenyan hospitality experience with a Rwandan team’s appetite to learn.

‘We are not coming here to teach them; we work with them,’ he says. ‘And we are not here forever.’

For expatriate CEOs, one of the early challenges of launching a new business is deciding whom to bring along to get it off the ground while building a local workforce capable of taking over.

When Mr Kimenyi was posted to Rwanda, he picked a small team from Nairobi in food and beverage, housekeeping, front office and the kitchen, while grooming local managers to take over.

‘These young people follow the standard operating procedures,’ he says. ‘They are eager to learn.’

To Mr Kimenyi, one is never too old to be involved in day-to-day operations in the industry.

‘Good hoteliers are like rock stars,’ he says. ‘You can see a rock star like Mick Jagger. He’s 82 and doing his world tour and the concerts are full. So, you’ve got to keep on rocking. We are like rock stars: you rock until you drop. But I enjoy it.’