Category: Business Daily

Kenya’s goods trade deficit widened at a double-digit rate in the first three months of 2026 on increased imports of industrial materials, food and fuel that outpaced record export earnings, highlighting growing reliance on foreign supplies and increasing pressure on foreign exchange earnings.

A goods trade deficit occurs when a country’s total imports of physical products surpass its total exports over a specific period. This means the nation spends more on imported goods than it earns from selling its own products abroad.

Data from the Kenya National Bureau of Statistics (KNBS) shows that the deficit in merchandise trade grew 17.4 percent to Sh437.03 billion in the January-March period from Sh372.12 billion in the corresponding quarter last year.

The widening gap means Kenya spent Sh437 billion more on imported goods than it earned from merchandise exports, underscoring a longstanding challenge of generating sufficient export revenues to match the country’s import needs.

Imports rose 14.4 percent to Sh740.8 billion during the quarter from Sh647.6 billion a year earlier, while exports increased by a slower 10.3 percent to a record Sh303.8 billion.

Kenyan exporters have historically cited tariff structures in key export markets as a major obstacle to value addition. Many traders prefer exporting raw produce because semi-processed and processed products can attract higher duties in destination markets, particularly in Europe, making value-added exports less competitive.

President William Ruto has previously argued that exporting raw commodities deprives the country of jobs, industrial growth and higher export earnings.

‘For decades, we have exported our tea, our coffee, our livestock, our minerals, our cotton, our hides and skins, and even our fish in raw form only to import them back at a premium as finished products,’ he said earlier.

He stressed that value addition is critical to increasing incomes across supply chains and helping Kenya capture a larger share of the value generated from its exports.

The country’s import bill in the opening quarter of the year was driven largely by a sharp increase in food purchases from international markets.

Food and beverage imports jumped 40.9 percent to Sh81.6 billion from Sh57.9 billion in the first quarter of 2025, representing an additional Sh23.7 billion spent on imported food products.

The increase made food and beverages one of the largest contributors to the widening trade deficit during the review period.

Industrial supplies remained Kenya’s biggest import category, rising by 10 percent to Sh277.5 billion from Sh252.2 billion in the corresponding quarter last year and exerting pressure on the trade balance.

Fuel and lubricant imports increased 15.8 percent to Sh158.8 billion from Sh137.2 billion, reflecting the country’s continued dependence on imported petroleum products.

Transport equipment imports increased 26.9 percent to Sh68.7 billion from Sh54.1 billion, while machinery and other capital equipment imports climbed 8.5 percent to Sh97.2 billion, pointing to continued investment in productive sectors of the economy.

Consumer goods imports rose 7.8 percent to Sh53.7 billion from Sh49.8 billion in the first quarter of 2025.

Despite the widening deficit, Kenya posted its highest first-quarter export earnings on record.

Food and beverage exports, the country’s largest export category, increased 5.2 percent to Sh109.2 billion from Sh103.8 billion.

Consumer goods exports rose 7.4 percent to Sh68.3 billion while transport equipment exports increased 32.5 percent to Sh3.3 billion.

Exports of machinery and capital equipment more than doubled to Sh11.2 billion from Sh5.2 billion a year earlier, representing the fastest growth among major export categories.

The gains were, however, partly offset by a decline in industrial supplies exports, which fell 14.6 percent to Sh50.1 billion from Sh58.7 billion.

The trade figures highlight Kenya’s long-running struggle to sustainably narrow its goods trade deficit despite steady growth in exports.

Economists have often linked the imbalance to the country’s reliance on traditional agricultural exports such as tea, coffee and horticultural produce, much of which is shipped abroad in raw or minimally processed form.

This limits the value Kenya captures from its exports, compared with finished products that typically command significantly higher prices in international markets.

Tea, one of Kenya’s largest foreign exchange earners, continued to face headwinds during the quarter.

Tea export earnings declined to Sh45.3 billion from Sh46.1 billion a year earlier as export volumes fell to 151,562 tonnes from 157,515 tonnes.

Coffee provided a bright spot, with export earnings rising to Sh16.8 billion from Sh15.7 billion despite export volumes dropping to 15,848 tonnes from 16,894 tonnes.

The higher coffee earnings suggest exporters benefited from stronger international prices rather than increased volumes.

A Chinese contractor has abandoned the site of the Sh20 billion Soin-Koru Multipurpose Dam Water Project, which straddles Kisumu and Kericho counties, raising fresh concerns over the fate of one of President William Ruto’s flagship water infrastructure projects.

An audit report has revealed that China Jiangxi International Kenya Limited, the contractor behind the project, was not on site when officials from the Office of the Auditor-General conducted an inspection, casting doubt on whether the dam will be completed within the scheduled timelines.

The National Water Harvesting and Storage Authority awarded the contract for Lot One of the Soin-Koru Multipurpose Dam Water Project, covering the dam component, to China Jiangxi under a joint venture arrangement on May 11, 2022, at a contract sum of Sh19.99 billion.

The project is being undertaken through a joint venture between China Jiangxi and its parent company, China Jiangxi International Economic and Cooperation Company Ltd.

The project commenced on August 27, 2022, and is scheduled for completion on August 27, 2027.

However, a physical inspection by auditors revealed that little progress had been made despite the project having consumed nearly three years of its implementation period.

‘The contractor is not on site,’ Auditor-General Nancy Gathungu noted in the audit report for the National Water Harvesting and Storage Authority for the financial year ended June 2025.

It is unclear whether the contractor has since returned to the site.

Efforts to obtain a response from China Jiangxi were unsuccessful. A company representative contacted by the Business Daily had not responded to questions sent via text message by the time of publication.

The Auditor-General’s report further revealed that several critical components of the dam had either not commenced or were significantly behind schedule.

Among the works yet to begin are the construction of a 54-metre-high zoned earth rock-fill dam, diversion culverts, coffer dams, seepage control works, grouting, diaphragm walls, relief wells and laboratory testing facilities.

The contractor had also not started construction of Intake Tower B, river diversion works, road pavements, drainage structures, access roads, water abstraction facilities, hydropower infrastructure and security installations.

Only the side-channel spillway, comprising a concrete-lined chute and plunge pool, had commenced, with auditors estimating progress at about 15 percent.

The Auditor-General also observed that the resident engineer’s offices, laboratory and staff houses remained incomplete.

Project stakes

The latest setback threatens to derail a project that the government has repeatedly described as critical to improving water security, flood control, irrigation and industrial development in western Kenya.

The multipurpose dam, which will sit on approximately 2,170 acres along the Kisumu-Kericho border, is expected to store 93.7 million cubic metres of water.

The project is designed to supply 72,000 cubic metres of water daily for domestic and institutional use, irrigate about 2,570 hectares of land and generate 2.5 megawatts of hydropower.

Areas expected to benefit from the project include Kisumu City, Ahero, Chemelil, Miwani, Awasi, Muhoroni, Koitaburot, Koru and Rabuor.

The dam is also expected to help contain perennial flooding in the Nyando basin while supporting agricultural production in surrounding areas.

The project has been earmarked as a key off-site infrastructure investment supporting the planned 1,000-acre Kisumu Special Economic Zone in Miwani and is listed among the flagship projects under Kenya’s Vision 2030 development blueprint.

Construction activities began in 2023 following compensation of affected landowners. The project displaced an estimated 1,200 residents.

The findings come at a time when China Jiangxi is facing scrutiny over other public projects.

The company was previously questioned by Parliament over the troubled Hazina Trade Centre project owned by the National Social Security Fund (NSSF). Legislators raised concerns over the reduction of the building from 36 floors to 15 floors without a corresponding reduction in contract costs and amid questions over documentation supporting the variation.

Separately, the Auditor-General has raised concerns over delays in the Sh1.96 billion Umaa Dam Water Supply and Irrigation Project in Kitui County, which is being implemented by a joint venture involving China Jiangxi International Economic and Technical Cooperation Company Ltd and Vanqo Roads and Engineering Ltd.

Most men his age wake up slowly. They take morning leisurely walks, switch on the television, or sit back and let the day unfold at an easier pace.

Professor Charles Orero does none of that. At 73, he wakes up, sits at his desk, takes a fresh notebook, and begins to write, be it on a weekday or weekend.

Day after day, Orero pours his thoughts on a paper, only stopping at lunchtime, after which he comes back and writes some more until late in the evening. This has been part of his life since he retired in 2016.

Some are blue. Others black. A few red. All are carefully arranged, labelled, and preserved like artefacts. Each one , Orero says, represents roughly a month of work. Each one is completely drained of ink.

They are evidence of his purpose after retirement, his intellectual productivity, and the legacy he is building.

It is also how he has stayed off the perilous path that sees many men slowly wither away after stepping away from active work.

‘If you retire and just sit there, you will die,’ he says matter-of-factly.

He is still engaged in academia, teaching online at the Kenya School of Revenue Administration. The pace is, however, lighter than his decades-long career at the Kenya Revenue Authority (KRA), where he rose to Assistant Commissioner over 37 years of service.

But the real work, he insists, is elsewhere.

The discipline of paper and ink

At 73, Orero’s mornings are still defined by writing. He sits at his desk, opens a fresh notebook, uncaps a biro pen, and writes until lunchtime. After lunch, he returns and continues.

The rhythm has defined his life since he retired from full-time public service in 2016.

Most men his age, he acknowledges, slow down. He did not.

A second life in book

Since retiring, Orero has written eight books. Four have been published, one is awaiting release, and three are still in progress. Most run to 400 pages or more.

Every one of them begins the same way: by hand. Not typed. Not dictated. Written, page after page, through repeated drafts of the same sections.

‘Page one, page two, page one, page two,’ he explains. ‘Then I take it and start typing.’

It is slow, deliberate work in a fast, digital world. But that is precisely the point. Writing by hand, he says, keeps his mind engaged. It forces thought to keep pace with ink.

‘It slows me down just enough to think clearly and deeply about what I’m putting on the page.’

And the pens are witnesses to that process. One after another, they are exhausted, replaced, and quietly added to the cabinet.

The man behind the routine

Before retirement, Orero spent 37 years at KRA, rising through the ranks in revenue administration. That long institutional life, he says, shaped his discipline and his refusal to stop working altogether.

It also left him with a warning he never forgot. ‘If you retire and just sit there, you will die,’ he repeats the phrase that has become both philosophy and instruction to anyone who seek his wisdom.

For him retirement was a transition, rather than termination. His days now, he says, are structured with precision: writing in the morning, revising in the afternoon, reading in the evening. Even weekends are quiet extensions of the same intellectual routine.

‘My life is readership,’ he says. ‘I cannot avoid reading every day.’

The pen, for him, is an extension of that daily conversation he has with ideas. And the results speak for themselves. He is 73 years old, sharp, energetic, and producing work that younger people have not attempted. ‘I have not changed much,’ he says, sitting straight, eyes clear and steady.

The quiet archive of pens

The cabinet of 180 pens was not planned. ‘I was just putting them there,’ he says.

‘I thought maybe 50,’ he says. ‘When I counted, they were far more than 50.’

The final tally was 180. Each pen lasts about a month. He buys them in bulk from the University of Nairobi bookshop, paying between Sh20 and Sh30 apiece. He does not track expenditure.

‘I’m not interested in the price,’ he says. What matters is what they produce.

Why he writes

The books themselves reflect concerns that have followed him through his career. They cover ground that he feels strongly about, areas where he noticed that very little had been written before and where he believed he had something real to offer.

His first book is on pride in knowledge. Growing up, he watched people be dismissed and looked down upon for not attending the most prestigious schools.

‘They would ask, ‘We didn’t see you,’ meaning you did not go to Alliance, you did not go to Nairobi University,” he recalls.

That quiet cruelty stayed with him. He wrote the book to push back against it, to tell Kenyans that education belongs to them too, no matter where they started. He says several people have gone back to school after reading it.

His second and third books, two volumes on charity and economic empowerment, came from his fascination with how great philanthropists like Warren Buffett, Bill Gates, and the Rockefellers gave generously while building lasting wealth at the same time.

‘When you do charity, you are also doing economic empowerment. It is not just charity alone,” he says.

The volumes carry a foreword from Manu Chandaria, one of the most respected business figures in East Africa.

He has also written on personality virtues, making the argument that good character and good habits are the real foundation of any successful life.

‘If you have good ones (virtues), you will be successful. If you don’t, you are not successful,” he says plainly.

He is currently working on books on wealth and devolution, and another that simplifies the world of taxes for ordinary people, drawing on his long career in revenue.

‘I’m not copying anybody,” he adds. ‘They are very original.”

Recognition and legacy

Now, Orero wants recognition for what he has built. The idea of a Guinness World Record emerged only after he counted his pens and reflected on the scale of his work.

‘What I want is just recognition,’ he says. ‘Not the material bit of it.’

He says he is not chasing money or celebrity. He is seeking acknowledgment that a retired man can, through consistency alone, produce eight substantial books written entirely by hand and measured, almost inadvertently, through the consumption of 180 pens.

He also hopes his story carries a wider message. Young people, he says, often want outcomes without process.

‘Start something small,’ he advises. ‘After starting, the others will follow.’

The philosophy of endurance

There is no sense of urgency in the way Orero speaks, only certainty. He sits upright, composed, deliberate in his phrasing.

He sees no contradiction between his pens, his books, and his ambitions. They are all part of the same continuum: repetition, discipline, accumulation.

‘Nobody has done it and nobody will do it,’ he says, not as boast, but as conclusion.

Outside his study, retirement often looks like slowing down, withdrawal, silence. Inside his, his faithful companions,

a desk, a notebook, and a pen uncapped await at the start of every morning.

And, somewhere behind him, a cabinet slowly filling with the quiet record of a life that refused to stop writing.

The nametag may read Vincent Odhiambo, Regional Director of Ashoka, but that would be false advertising. What he really is, is a contemporary yogi. His mind is whizzing: here, he is thinking about his family and friends and ‘people who come into your life for a reason’.

There, his thoughts drift to systems and consciousness. He ruminates a lot on whether he could have been taller, but by the time he got to that water, his brothers had drunk most of it.

In many ways, he is a construction of his thoughts, spending vast amounts of time chained behind his brain cells. Or hanging out with much older people, getting good advice, a nutrient-rich broth made from boiling down the bones of life.

‘Don’t forget that life is all about relationships,’ he says.

That has always been his north star. His intentionality in relationships. Understanding how to take advantage of your advantage.

‘I am a fireball,’ he says, ‘but also a wallflower.’

Not so much an overthinker, then, as he is a deep thinker. The wisdom plucked from the tendrils along the journey. Maybe that’s the real gift of success, not the money or the fame, but the wisdom and the life lessons.

What do you know about yourself that not many people do?

I am fascinated by why systemic change is so hard to achieve.

We often blame funding, policy or a lack of coordination, but I still struggle to understand why, despite the efforts of many well-intentioned people and organisations, we often fall short. I’m constantly thinking about the gap between our ambitions and the results we actually deliver.

Are you living the life you thought you would be at this age?

My journey sort of prepared me for this moment. I grew up with a very high consciousness of social and political issues, and was primarily thinking about inadequacies, imbalances and injustices around me. That set me on a path that I think is basically what I am living now.

I said to myself, ‘Why is it that there are people who thrive within these systems and there are people who are not able to?’ And that led me on a journey from social work to community organising to leadership entrepreneurship, and now systems thinking, where I can be part of the solution in terms of removing barriers for people.

What is the least fun thing about you?

[Chuckles] I tend to oscillate more towards complex, insightful conversations. Things that are philosophical and require thinking outside the box. I like exploring that which is not being explored.

That is annoying sometimes, especially for people who don’t get it. It kind of comes out as, ‘Why are you always being the devil’s advocate?’ Or as being obstinate and argumentative.

I see a ring on your finger. Of the two roles, which one has demanded more from you – this job or that ring?

There is a way they fit into each other. Leadership is all about relationships. It is about systems, processes, culture, and balancing those two is not easy because on both sides there are demands and things that need to be delivered.

The difference is that I have someone who has known me, who has seen me through all the different faces, and experienced the different versions of me: waking up full of energy, and another quieter version of me coming back at the end of the day, a wallflower.

That is grounding because that is the one person who provides all the inspiration and motivation. Don’t forget that life is all about relationships.

How has your spouse influenced the way you lead?

Good question. You see this pattern [on the wall]. Accountability, transparency, trust, innovation, respect and excellence [ATTIRE]. These are our values at Ashoka. But interestingly, accountability, trust and transparency are things we speak a lot about at home. These were basically my wife’s pillars, and finding grounding in these values, both at home and at work, has really shaped how I show up.

Are you a better husband or a better father?

Haha! If you ask her, she’ll say I’m a better father. If you ask the boys, they’ll say I’m a better husband. If you ask me, I’d say I try to strike a balance. But I always find that these are two different variables.

You can’t really measure what it is about being a husband that you can bring to being a father, and I deploy myself to each as appropriately as possible. Most people would point strongly in the direction of me being a better father due to my resolve to remove barriers for other people and help young people find a superpower they can contribute to changing the world.

What’s an underrated joy of fatherhood?

Fatherhood itself. Knowing there are people in this world who owe their being in this world to you. That in itself is joy. And you have a clean slate to mould them, train them and teach them.

What kind of father are you being to your children that you missed out on in your childhood?

A present father. Present meaning engaged and involved. My dad was present but not engaged. I think people know me with my sons more than they know me alone. A guard recently stopped me in a mall and asked how they were. I never experienced that level of involvement. I always want to know what they are thinking or planning, and whether they want us to go for a walk or cycling.

Which part of fatherhood has forced you to grow?

Making sure I don’t compare my sons, and avoiding those one-off statements like, ‘Oh, you should have…’ Initially, it was not easy, but over time, I’ve mastered it. And learning how to balance work, the time I spend with them, and the time I want to spend with my wife too. I know how they feel when I am not around.

Do you have a family tradition that glues you together?

Yes. We do dinner together every evening. We have moments where we read together and moments where we play together, sing and dance. But dinner is our tradition, and afterwards, prayers.

We also have movie nights, and every birthday has to be celebrated and planned for. We also enjoy cooking together. I enjoy cooking with them more because if I blunder, they won’t know [chuckles].

I am a hands-on person, which helps with my mental space as I am always reflecting or processing something, and you never get to rest your brain by just resting it. I need some activities to reset.

What’s your signature meal?

I don’t think there is one, haha! Every dish requires some level of creativity. If they come home and see the meal is set, they will know it is me who has done it because they have never tried that combination before [chuckles]. Almost like sandwiching everything, haha!

Which decade of your life demanded the most from you?

If I look at my life journey, I see the curious mind; the wanting to think through individual challenges and societal challenges, and trying to marry those. How is it that some people thrive and some people don’t?

As a child, I often asked myself, why is this teacher caning me for nothing? And that sparked questions about the imbalance of power. That consciousness was already a burden; understanding that human potential is not necessarily matched with opportunity.

What do you wish you’d learnt sooner in life?

That change does not come easy. And also the different levels of impact, from direct impact to indirect impact. Initially, I lent a lot of my energy to things that had direct impact, only to realise later that it was not sustainable or bringing about the kind of change that we want to see.

And as Vincent?

The complexities around what I call the interconnectivity of issues. When I approach something, it is from an understanding of how different aspects of it are interconnected, and understanding that relationships are not always just what you think.

People don’t turn out this way or that way by choice; there are so many things around that. If I had learnt that earlier, I would not have judged people so much.

Speaking of, what piece of advice do you wish you had not listened to?

[Chuckles] Actually, the one thing that I say contributed much to my worldview, and the person that I became, was that I hung out a lot with people who were older than me. I loved conversations that questioned things and required big, bold thinking, and I would only get this from people who were older than me.

I remember they told me, in Dholuo, that a ship capsizes when it is about to dock. You can interpret that in so many different scenarios, and it teaches you how to stay grounded.

But if I must know?

If you must know, someone once told me that hanging out with my sons was too much. That was pretty terrible advice.

Did hanging out with older people make you cautious?

Wiser, at a very early age. Being able to think through things a lot, and that meant oscillating more towards caution [chuckles].

Have you kept the promises you made to yourself as a young man?

I’d say the promises are evolving. Finding ways to address imbalances and inequalities is a constant theme for me. And I’d say with the roles that I have played, and the positions that I have been in, being part of teams that are keen on moving the needle is bringing me some level of satisfaction; and in that way, I am keeping the promise.

What bad habit have you failed to kick?

Haha! My waking-up time. It’s an unhealthy habit, but I am used to waking up early since back in the day, when my dad was going to work or coming home at dawn, I’d be up waiting for him.

That doesn’t sound like a bad habit.

It doesn’t? [chuckles]

Tell me then, what’s a small change you made in your life that has made a big difference?

Let me think [long pause]. Moving out to set up my own home. It remains the most transformative step I’ve ever taken.

When was that?

Just after high school, before joining campus. My parents were opposed to it, but I had made my decision. I never turned back, and that’s where I practised all my lessons as a scout [chuckles].

Is there anything you believed about success that has since changed?

Success was getting it right. Getting everything right. But there was also a lot of monetary value attached to that. Over time, you get to realise you cannot get everything right. It’s not a destination, it’s a journey.

But when you’re looking at success from a mission and passion perspective, then everything changes. For me, success will be achieved when everyone has their space, a support system, and a network to live up to their potential.

Do you have a mantra that governs how you live your life?

People come into your life for a reason or a season. The more I reflect on my journey, the more I realise how true that is.

Many of the most important moments in my life happened because someone showed up, offered guidance, made an introduction or created an opportunity. It reminds me that life is ultimately about people and the relationships we build along the way.

What does the perfect weekend look like for you?

I have people who are special in my life, people that I’ve journeyed with. Family, friends, and even colleagues, you know, people in this space. My perfect weekend involves having one of those around.

And, of course, the meaningful conversations with family, friends I’ve made over time, and very specific colleagues as well. I also like to read because I reflect a lot on what has happened. And moving about outdoors with my sons.

It’s a weekend where I get to experience all that. A bit of the wallflower part of me gets to be watered, and then the fireball part of me as well.

Do you have an insecurity that you can share with us?

[Chuckles] I don’t know how to convince myself of this, but I tend to believe that I could have been taller. Most of the time, when I’m meeting people for the first time, they expect somebody way taller than me.

Are you the shortest in your family?

My elder brother is taller than me. The one who follows me is also taller than me. Our youngest was really tall.

What advice do you feel compelled to share?

You don’tget to choose your family. Your friends could end up being circumstantial. But the one person that you deliberately choose – between a stimulus and a reaction, there’s a space to think through, and you’ve exhausted that space, and you’ve decided, this is the person – when you’ve made that choice, this person is part and parcel of your life.

What do you mean?

Meaning is in the intentionality of relationships. I don’t want to narrow it down just to marriage, but intentionality. You have identified someone, and you’re building, you’re together. That intentionality stems from the fact that you have made a choice.

So, every single day, that intentionality must always be there. It must be seen. It must be felt. It must be witnessed.

Did you choose well, based on your advice?

[Chuckles] So, it is because of the beauty that I see with that daily. The two-way intentionality in all this. And that leads me to the conclusion that we got each other. We got the right person for the right person.

Kenya’s digital economy has already demonstrated what’s possible when connectivity, innovation, and policy ambition move in the same direction. Mobile services, fintech platforms, and digital public infrastructure have positioned the country as a regional leader.

Now, as organisations move deeper into cloud platforms, analytics, and artificial intelligence, the question shaping decisions across both public and private sectors is: where should the infrastructure supporting these services sit?

We are seeing more organisations in Kenya and across East Africa asking practical questions about where their data lives, how quickly it can be accessed, and how confidently it can be protected. That shift tells us something important. Infrastructure is becoming part of how institutions think about risk, performance, and long-term competitiveness.

This discussion is also happening against the structural reality that Africa hosts only about 0.6 percent of global data centre capacity, even as demand for cloud and AI services grows. For Kenya, which has positioned itself as a regional digital leader, strengthening local infrastructure is key for several reasons.

One of the most immediate is regulatory alignment. Kenya’s Data Protection Act has changed how organisations think about accountability for personal information.

It doesn’t prevent cross-border hosting, but it does make organisations more aware of the responsibility they carry when data moves outside national jurisdiction. Keeping critical workloads closer to home simplifies compliance and strengthens trust with customers and regulators.

Performance is another driver that’s becoming harder to ignore. As services move online, users expect systems to respond instantly. Businesses want their platforms to support real-time decisions. Developers need infrastructure that can keep pace with modern applications.

Hosting infrastructure locally improves service quality in ways that are immediately visible, particularly as AI and real-time analytics become embedded in everyday operations. Proximity to compute environments matters even more when workloads involve speech processing, video analytics, or predictive modelling.

Cyber security is also shaping the conversation.

When organisations depend heavily on infrastructure located far beyond their operational environments, they extend their exposure across multiple networks and jurisdictions. This isn’t to say that global platforms are less secure, but local infrastructure makes matters less complex, giving institutions more control over how services are delivered and how risks are managed within national regulatory frameworks.

There’s also a broader strategic point that’s sometimes overlooked. Data has moved beyond being an operational resource to being a part of how countries build innovation capacity.

When infrastructure sits closer to the markets it serves, it becomes easier for startups to experiment, for universities to access advanced computing environments, and for enterprises to scale new services with confidence. This changes what’s possible across the ecosystem, creating exciting new possibilities for local innovation and economic growth.

AI makes this especially clear. Kenya has strong momentum as a digital innovation hub, but scaling AI needs specialised infrastructure with reliable power, cooling capacity, and secure connectivity. Bringing that capability closer to the market prepares organisations to move from pilot initiatives into production environments with greater certainty and lower barriers to entry.

And we’re not just talking about large enterprises. SMEs form the backbone of Kenya’s economy, and they’re often the fastest adopters of new digital tools when access improves.

Local cloud and AI capabilities allow these smaller businesses to gradually expand into advanced services rather than making large upfront investments. That changes how innovation spreads across the economy.

Kenya’s military spending touched a record high of $1.47 billion (Sh190.25 billion) last year, as the country continued its defence modernisation programme amid heightened security threats in the region.

This was an increase of 17 percent from the Sh162.64 billion the country spent on its military in the 12 months to December 2024, according to data from the Sweden-based Stockholm International Peace Research Institute (SIPRI), an independent global security think tank.

The region’s biggest economy remained ahead of its East African neighbours in military spending and was the third largest spender in Sub-Saharan Africa (SSA) behind South Africa and Nigeria, according to the SIPRI report.

The pace of increase in military spending last year was slower than the revised growth rate of 19.2 percent recorded in 2024.

However, Kenya’s military expenditure accounted for 4.63 percent of total government spending in 2025, the highest share since 2018.

Kenya remained East Africa’s biggest military spender in 2025, outspending Uganda and Tanzania by a wide margin. According to SIPRI data, Uganda’s military expenditure stood at approximately Sh167.9 billion, while Tanzania spent about Sh133.4 billion during the year.

Ethiopia, whose military had in recent years been engaged in a brutal conflict against Tigrayan forces in the country’s northern region, recorded a decline in defence spending of 24.6 percent to Sh68.4 billion, reflecting the easing of hostilities following the 2022 peace agreement.

Kenya’s military burden-the share of global gross domestic product (GDP) devoted to military expenditure-rose slightly from 1.04 percent in 2024 to 1.07 percent in 2025.

Nairobi’s expenditure as a fraction of its GDP was not only below the global average of 2.4 percent, it was also lower compared to its regional peers, including Uganda, Tanzania, Rwanda, Somalia, and South Sudan.

SIPRI did not reveal where Kenya bought most of its arms. Historically, the US has been considered to have the most extensive and influential military-industrial complex, encompassing a vast network of defence contractors, military bases, research military bases, research facilities, and government agencies.

In 2024, Kenya’s main suppliers were Trkiye and the US, one of the authors of the SIPRI Military Expenditure and Arms Production Programme told the Business Daily in an earlier interview.

Since 2016, Kenya’s military spending has increased by 57.5 percent from $933.1 million (Sh120.8 billion), as the country embarked on its military modernisation programme amid rising regional and global security threats, including persistent attacks by Al-Shabaab and emerging risks tied to Iran-backed Houthi militants in Yemen, whose reported links with Somali-based networks have heightened concerns over cross-border insecurity.

A budget report recently published by the National Treasury indicated that Kenya had secured a Sh6.1 billion Israeli-backed loan to acquire a high-tech missile defence system, strengthening its ability to counter aerial threats amid rising regional insecurity and concerns that the Israel-US war against Iran could spill over into the Horn of Africa.

The funding for the financial year starting July 2026 marks a 79.4 percent increase from the Sh3.4 billion the Ministry of Defence is expected to receive from Tel Aviv in the current financial year ending June, according to a Treasury budget report.

In the budget documents, the Ministry of Defence says rapid advances in military technology are making its equipment obsolete faster and raising the cost of upgrades. It also cites challenges such as limited funding leading to pending bills, porous borders, staff shortages, rising disasters, land disputes, and the high cost of land acquisition and compensation.

Two years ago, the Treasury revealed that Kenya was seeking a Sh1 billion loan from Israel to buy a system dubbed the Spyder Defence System.

The Spyder – short for Surface-to-air PYthon and DERby – is a low-level surface-to-air missile system designed to counter attacks from aircraft, helicopters, unmanned aerial vehicles (drones) and precision-guided munitions.

A study by the United Nations Institute for Disarmament Research found that most non-state armed groups in Africa, including terrorists, have developed an interest in uncrewed aerial systems such as drones, making it urgent for countries such as Kenya to upgrade defence systems.

Al-Shabaab is one of the groups that, although it has yet to use these systems for military attacks, is close to attaining such capabilities, according to the report.

World military expenditure rose by 2.9 percent in real terms to reach $2887 billion in 2025, with the US, China, Russia, Germany and India, combined accounting for 58 percent of world military spending. Military expenditure in sub-Saharan Africa totalled $23.3 billion (Sh3 trillion) in 2025, up by 7.4 percent compared with 2024 and 21 percent more than in 2016.

‘The year-on-year increase was largely driven by higher spending in Nigeria, the second largest spender in the subregion,” reads the report.

“The largest percentage increase in military spending by any country in 2025 was seen in the DRC (+105 percent), where there has been protracted conflict between the government and non-state armed groups.’

The world’s newest nation, South Sudan, recorded the second largest percentage increase (78 percent) amid internal violence and spillover from the Sudanese civil war, reckoned the report.

Employers risk having their bank accounts frozen, assets seized, and tax PINs deactivated for failing to remit pension contributions under a law change aimed at enforcing the remittances and easing old-age poverty.

The Kenya Revenue Authority (Amendment) Bill, 2026, will allow the tax authority to collect unremitted pension from employers in a fresh attempt to reduce the mounting stock of retirement benefits deducted from workers’ payslips and not remitted to schemes for investment.

The unremitted pension stood at Sh66.41 billion at the end of December 2025 from Sh47.1 billion in June 2024.

The change in law will allow the KRA to enforce the collection of unremitted pension deductions, akin to the tough measures meted out on firms and individuals who fail to pay tax.

Section 42 of the Tax Procedures Act empowers the KRA to deactivate PINs, issue travel bans, collect cash due from the taxpayer’s banker and prosecute executives for defaults and evasion.

The pension regulator–the Retirement Benefits Authority (RBA)-has been lobbying to have KRA pursue pension defaulters through the law change, allowing the taxman to hand out stringent penalties for employers who deduct and fail to transfer pension contributions to the schemes.

RBA disclosed its wish in policy briefs.

‘…empower the authority to enforce direct recovery of unremitted contributions from defaulting sponsors, including by way of garnishee orders,’ the RBA said in the policy note.

‘This will anchor the collection of the unremitted contributions as part of the functions of KRA under the Kenya Revenue Authority Act.’

Garnishee orders a third party, like KRA, to seize money from a bank belonging to firms in default and remit it directly to a pension scheme.

KRA has agency notices, a directive issued by the taxman under Section 42 of the Tax Procedures Act, compelling a third party, such as a bank or employer, to recover unpaid taxes from a defaulter’s account and remit them to KRA.

It will rely on the clause to punish firms that default on pension contributions.

KRA lists various enforcement measures, including the recovery of debts, issuance of agency notices, preservation of funds and assets caveats.

Unremitted pension deductions eased to Sh66.41 billion over six months to December 2025, falling from Sh72.5 billion in June, with public institutions accounting for the bulk of unpaid retirement contributions.

The parastatals accounted for 93 percent of the unremitted deductions, with private employers making up just seven percent of arrears, underscoring persistent compliance failures among State-owned institutions.

County governments, public universities and other government agencies remained the largest defaulters, continuing a trend that has repeatedly exposed weakness in public payroll and expenditure controls.

Most defaults have been concentrated in entities that rely heavily on exchequer funding, where delayed Treasury disbursements disrupt statutory payments.

County governments have been the most exposed, grappling with delayed transfers, rising wage bills and competing recurrent obligations.

The unpaid deductions represent money already withheld from workers’ salaries but not remitted to pension schemes, which delays investments and erodes retirement savings.

At present, late remittance of pension contributions attracts penalties of Sh20,000 or five percent of the outstanding amount per month, whichever is higher.

The RBA has previously proposed to impose personal liability on chief executive officers of firms that fail to remit pension contributions, while seeking to increase penalties and interest for defaulters.

The surge in non-remittance of pension contributions suggests that current sanctions have failed to deter the vice.

‘It is purely indiscipline because if you look at it from a government point of view, all government agencies have budgets that they prepare on an annual basis,’ said RBA chief executive officer Charles Machira in a previous interview.

‘Those budgets are remitted to the National Treasury for approval or through their line ministry.’

Kenya also suffers from low pension coverage, with more than 70 percent of Kenyans retiring without a pension, save for the less-than-sufficient payout from the NSSF.

The NSSF’s monthly contributions stood at Sh400, including the Sh200 matched by the employers, for years and the fund on average paid out less than Sh250,000 when a member retires.

The have since been increased to a maximum of Sh12, 960, including Sh6, 480 from employers.

Kenyans, on average, are living longer and the rank of the elderly poor is rising as the traditional social fabric yields to the forces of rapid urbanisation and changing social and family trends.

In the past, social security was not a bother to many Kenyans because there was a large extended family to fall back on in the rural areas, but as the social fabric changes and more people opt to retire in urban centres, the trend is increasingly becoming a headache to policymakers.

This is what prompted the State to start a monthly stipend of Sh2,000 for those above 70 years to cushion them from old-age poverty.

Hot flushes, weight gain and vaginal dryness are among the most common signs of menopause. But the changes do not stop there. The skin also undergoes noticeable changes, including wrinkling, thinning, dryness, acne flare-ups, and hyperpigmentation.

Oestrogen plays a major role in maintaining healthy and youthful skin, says Dr Gacheri Kathiri, a dermatologist based at Meru Teaching and Referral Hospital.

“During menopause, falling oestrogen levels contribute to reduced collagen and elasticity. The skin becomes thinner and drier, making signs of ageing more visible, such as wrinkles and changes in texture,” she says.

Some skincare companies have introduced face creams and serums marketed as ‘oestrogen-infused’, sold without prescription and promoted as solutions for reversing or preventing ageing.

However, skin ageing is not caused by hormones alone. “Genetics, ultraviolet (UV) exposure, smoking, nutrition, stress, pollution and chronic illness also contribute significantly,” she says.

However, Dr Kathiri cautions that no cream can completely reverse skin ageing. “Ageing is a biological process involving structural changes in collagen, elastin, fat, muscle, and bone.”

“What topical creams can realistically do is improve hydration, pigmentation, texture, and fine lines by stimulating some collagen production.”

The evidence-backed creams

She says that the most evidence-based topical anti-ageing ingredients remain sunscreen, retinoids, vitamin C, niacinamide and moisturisers containing ceramides.

Dr Kathiri also notes that many cosmetic ‘oestrogen-infused’ products marketed online may contain very low amounts of plant-derived compounds or unclear ingredients with minimal proven benefit, especially because the industry is highly unregulated.

‘These creams cannot improve deep wrinkles, sagging skin or loss of facial volume,’ she explains.

Advanced photoageing, like sagging, largely results from deeper structural changes beneath the skin, including fat and ligament changes, which creams cannot fully correct.

“Individuals should be cautious of exaggerated marketing claims promising ‘many years younger’ results.”She says the best approach for very advanced ageing signs is invasive procedures, from simple procedures like microneedling to fully surgical interventions.

“Prescription hormonal creams (by certified doctors or clinicians) contain regulated forms of oestrogen such as oestradiol and are prescribed for medical indications. They undergo stricter quality control and medical supervision,” she emphasises.

Cosmetic ‘phytoestrogen’ products could contain plant-derived compounds. However, she says there’s weaker scientific evidence and inconsistent outcomes on their effects on skin. “They are often safer than true hormonal products, but regulation in cosmetics may vary, with some products having unsupported claims.”

Signs of adverse reaction

She advises women to be careful with unregulated imported skincare products sold online or in informal beauty markets.

Some warning signs of reaction to hormone-infused skincare may include redness, burning, itching, swelling, rash or acne flare-ups. In some cases, users may also experience hyperpigmentation, breast tenderness or unexpected vaginal bleeding.

“Long-term concerns depend on the level of systemic absorption and may include hormonal imbalance, stimulation of hormone-sensitive tissues, possible increased risk in people predisposed to breast or endometrial cancers, worsening of melasma, and interference with fertility,” says Dr Gacheri.

“Topical oestrogen is mainly used medically for conditions such as vulvovaginal atrophy and genitourinary syndrome of menopause. In such cases, it is prescribed as vaginal creams, tablets or rings, and systemic absorption is usually very low to negligible.”

Facial hormonal creams, however, are not routinely recommended as first-line anti-ageing treatments in standard dermatology practice. If used, they should be under medical supervision.

Products you should avoid

Additionally, she cautions that these products should generally be avoided or used only under specialist guidance in people with breast cancer or such history, endometrial cancer, oestrogen-sensitive tumours, unexplained vaginal bleeding, liver disease, history of blood clots or stroke, or pregnancy.

Also, certain migraine disorders with vascular risk occur in children, adolescents and most younger adults.

Despite the growing number of skincare products in the market, Dr Gacheri stresses that sunscreen remains the most effective and scientifically supported anti-ageing product.

“While melanin offers some natural protection against skin cancer, sunscreen is still essential for reducing visible signs of ageing such as wrinkles, uneven skin tone, loss of elasticity and hyperpigmentation. It is also important for people with photosensitive conditions such as lupus, melasma, photodermatitis and albinism,” she says.

She recommends a broad-spectrum sunscreen with SPF 30 or higher, applied every day, even on cloudy days. “For proper application, the face and neck require about two finger-lengths of sunscreen. It should be applied 15 to 20 minutes before sun exposure and reapplied at least every three hours when outdoors for long periods.”

The REITs Association of Kenya (RAK) has noted recent submissions by the Institute of Public Finance (IPF) and commentary attributed to the Kenya Human Rights Commission (KHRC) to the National Assembly Departmental Committee on Finance and National Planning, to the effect that the exemption of Real Estate Investment Trusts (REITs) from capital gains tax (CGT) under the Finance Bill 2026 ‘favours wealthy individuals’ and ‘presents a tax loophole for the wealthy’.

The association respects the important watchdog role that the IPF, the KHRC, and other civil society institutions play in scrutinising fiscal policy and shares their commitment to a progressive tax system that protects low-income earners.

However, the association wishes to correct a fundamental mischaracterisation of how REITs are taxed.

The proposed measures do not waive tax owed to the Exchequer. They defer it-and, on a full-cycle basis, they cause the government to collect more tax, not less.

Deferral, not forgiveness

The Finance Bill 2026 proposes (through the new paragraph 76 of the First Schedule to the Income Tax Act) to exempt from CGT – and from stamp duty – the transfer of property into a registered REIT.

This is a roll-over mechanism, not a permanent waiver. When a property owner contributes a building or land to a REIT in exchange for REIT units, no cash changes hands. The owner has not ‘cashed out’; they have merely converted a direct, illiquid holding into units of equivalent value.

Taxing that paper conversion would impose a cash tax demand on a transaction that has generated no cash, a recognised distortion that discourages the very seeding of REITs, the policy is designed to encourage.

Crucially, the gain is not extinguished. The asset’s tax cost base rolls over, and the CGT crystallises later-when the REIT eventually disposes of the underlying property, or when the investor sells their units at a genuine point of cash realisation.

The Treasury collects the same gain; it simply collects it at the point where real money is realised, rather than on a dry, non-cash transfer.

This is precisely why rollover treatment for contributions to REITs is the international standard, adopted in the United States, the United Kingdom, Singapore, and our regional peer, South Africa.

The REIT is a conduit, not a shelter.

The existing income-tax exemption for REITs under Section 20(1) of the Income Tax Act is similarly misunderstood.

A REIT is a flow-through vehicle. It is exempt at the trust level on the strict condition that it distributes at least 80 percent of its distributable income to unitholders. The exemption exists solely to prevent the same rental income from being taxed twice – once in the trust and again in the investor’s hands.

The tax is, therefore, not avoided; it is collected at the investor level, through withholding tax on distributions, which operates as a final tax. Far from being a giveaway, the regime compels income out of the structure and into the hands of taxable investors. This is the universally accepted REIT bargain-not a Kenyan loophole.

Properly understood, the REIT incentive is revenue-positive. It exchanges a deferred slice of one tax for a broadened, recurring stream across many. The pressure the IPF fears will fall on value-added tax (VAT) and pay-as-you-earn (PAYE) is, in fact, relieved by the additional VAT and PAYE that REIT-driven development creates.

The nascent REITs market should be nurtured.

The Finance Bill 2026 measures are a long-overdue correction of the very tax frictions-double taxation and dry transfer charges-that have stunted the sector’s growth.

Removing them now would stillbirth a market that has only just begun to take root, and would push real-estate capital back into opaque, untaxed informal structures.

A committee of the National Assembly wants all proposed write-off or restructuring of on-lent loans to be approved by the House, a shift that looks set to spark off supremacy wars amid efforts to curb defaults by State agencies that tap credit through the National Treasury.

The Public Debt Privatisation Committee of the National Assembly directed that any proposed write-off or restructuring of the on-lent loans be tabled in Parliament for scrutiny before any decision is taken.

An on-lent loan is a credit facility tapped by a primary borrower such as a government, and passed to a secondary borrower to fund specific projects.

‘In order to address moral hazard in on-lent loans, the National Treasury should ensure that any proposed write-off, restructuring or forgiveness of on-lent loan obligations is submitted to the National Assembly for consideration and approval before implementation,’ the committee said in a report to the House.

The committee says that the decision to have MPs scrutinise any proposed write-off or restructuring is critical in holding the defaulting State agencies to account in a bid to avoid burdening taxpayers.

The push from MPs comes at a time when at least 29 State-owned entities have applied for write-offs of about Sh28.55 billion in loans after years of defaults. Currently, the Treasury only seeks approval from the Cabinet before writing off, restructuring or forgiving any on-lent loan.

Write-offs of on-lent loans transfer the financial burden of these credit facilities to taxpayers since the loans from Treasury to such entities are usually drawn from public coffers.

Some of the public entities seeking write-off of on-lent loans include National Water Conservation at Sh5.44 billion, Agro-Chemical and Food Co Ltd (Sh2.94 billion), Lake Basin Development Authority (Sh1.34 billion) and Catering Levy Trustees together with Utalii College (Sh733.27 million).

The requests for write-off, subject to Treasury’s approval, came in the period principal and interest arrears rose from Sh405.11 billion, pointing to rising default levels among State-owned enterprises.

The Treasury said that the agencies applied for the write-offs during the year ended June 2025. It remains unclear whether the Cabinet has already decided on these requests.

Besides approving or rejecting the write-offs, MPs have also directed the Treasury to furnish Parliament with a report on all defaulting entities, the amounts forgiven, reasons for the default and any recovery measures taken in the last ten years.

Write-offs of the loans are a convenient route for scores of State-owned entities that have fallen on tough times and are unable to pay the debt.

Kenya Airways remains one of the biggest beneficiaries of write-offs in the past few years, in a period when the national carrier was suffocating under losses.

Treasury wrote off Sh24.2 billion on-lent to Kenya Airways in 2019, handing the carrier a lifeline amid mounting losses that had threatened its ability to repay loans.

KQ also failed to pay Sh8.5 billion in interest on-lent loans that was due in the year ended June 2025. The airline had not paid the money six months later, forcing the Treasury to waive and defer it.