What you need to know about new instant traffic fines system

The government has changed the way it punishes motorists for a raft of minor road offences, in what will now see graduated fines imposed, with mandatory court appearances scrapped.

The changes took effect at the start of June, allowing motorists accused of certain violations to pay prescribed penalties, marking one of the biggest shifts in traffic enforcement in recent years.

The government says the system is intended to improve road safety through enhanced compliance with traffic laws, reduce case backlogs in traffic courts, and introduce greater transparency through digital enforcement and automated evidence collection.

What exactly has changed?

Under the new framework, motorists who commit certain minor traffic offences will no longer be automatically arrested or taken to court.

Instead, they will receive a traffic offence notification requiring them either to pay a prescribed fine within a given period or to challenge the accusation before a magistrate.

The changes effectively introduce an administrative settlement mechanism for minor offences, while preserving motorists’ right to seek a judicial determination if they dispute the accusation.

How will motorists know they have been fined?

The notification can be delivered personally by a police officer, placed on the vehicle, or sent electronically via SMS, email, or approved digital traffic enforcement platforms.

Each notification must contain the nature of the offence, the date, time, and place where it occurred, the amount payable, and the deadline for responding.

The government is therefore urging motorists to update their contact details in the NTSA system to avoid missing important notifications.

Will traffic cameras now be issuing fines?

Yes. The government has expressly provided for offences to be detected electronically through traffic cameras and other digital monitoring systems.

Once sufficient evidence has been collected, a notice may be issued to either the driver or the registered owner of the vehicle without the need for a physical traffic stop.

The move underscores a growing reliance on technology in traffic enforcement as Kenya expands the use of intelligent transport systems on major roads.

What options does a motorist have after receiving a notice?

A notification does not amount to an automatic conviction.

A motorist may choose to admit responsibility and pay the prescribed fine within the stipulated period, or dispute the allegation and have the matter determined by a court if they believe the accusation is incorrect.

The government has guaranteed motorists the right to access evidence supporting the alleged offence, including photographs and video recordings captured by enforcement systems.

What happens if someone ignores the notice?

Failure to respond to a notification, pay the prescribed fine, or appear in court when required may result in more severe penalties.

A court may impose higher sanctions than the original prescribed penalty, depending on the circumstances of the case.

Authorities have warned motorists against treating the notifications as optional reminders that can simply be ignored.

What are demerit points and why do they matter?

The framework revives the use of demerit points on drivers’ licences for certain offences.

A motorist who repeatedly commits traffic offences may accumulate demerit points, which could eventually lead to suspension or cancellation of their driving licence.

The demerit system is designed to identify habitual offenders and discourage dangerous behaviour on Kenyan roads.

Which offences attract fines and how much will motorists pay?

The penalties vary depending on the offence committed.

Failure to carry a driving licence or failure to renew it, for instance, attracts a fine of Sh1,000.

Disobeying traffic signs, driving without the correct licence endorsement, and carrying excess passengers each attract a Sh3,000 penalty.

Driving on a pavement, failing to stop when directed by a police officer, and driving a public service vehicle while unqualified each attract a Sh5,000 fine.

More serious offences, including driving without a valid inspection certificate, operating a vehicle with improperly displayed number plates, and causing obstruction on a road, attract penalties of Sh10,000.

Speeding penalties are graduated depending on the extent of the violation, starting from Sh500 for exceeding the limit by six to ten kilometres per hour, rising to Sh3,000 for eleven to fifteen kilometres per hour, and reaching Sh10,000 for sixteen to twenty kilometres per hour.

Why is the government introducing these changes now?

The reforms come against a backdrop of rising road crashes and persistent complaints about inefficiencies in the handling of traffic cases.

Thousands of minor traffic offences end up in court every year, contributing to congestion in the justice system and delaying resolution of cases.

By allowing certain offences to be settled administratively and introducing electronic enforcement, the State hopes to improve compliance and free up court resources for more serious offences.

How data protection aids Kenya’s digital transformation agenda

The next time a mobile lender asks to access your call logs or a hospital receptionist photocopies your ID card “for the records”, you need to ask yourself several questions. Who said they could have that information? What are they doing with it? Can you get it back?

Kenya has an answer to these questions, and it is in a law called the Data Protection Act of 2019. The Office of the Data Protection Commissioner (ODPC), which was created to enforce that law, has been busy building one of Africa’s most detailed sets of rules about how your personal information should be handled. It has published guidance notes covering sectors from health and education to elections, the media, and the public sector.

What is the big idea behind these guidance notes? What philosophy runs through all of this? The simple answer is that your personal data belongs to you, and anyone who uses it must be able to justify doing so.

The Data Protection Act was not conceived in a vacuum. It exists to give life to Article 31 of the Constitution, which guarantees every person the right to privacy, including the right not to have information about their private life unnecessarily revealed.

That constitutional anchor matters because it means data protection is not just about ticking a box on a piece of paper. It is about a basic right that belongs to every Kenyan.

The ODPC’s guidance notes return to this point. Whether they are addressing a rural health clinic, a digital lender, or a TV journalist, the starting position is always the same: the person whose data you are holding has rights, and your job is to respect them. The Act sets out eight principles for handling personal data. They may sound technical, but they are really just common sense dressed in legal language. Collect data for a specific reason. Only collect what you need. Don’t keep it longer than necessary. Keep it accurate, secure and be honest about what you are doing with it. Be able to prove you are doing it right.

These principles do not stand alone but reinforce each other. If you are only collecting data for a specific purpose, you end up collecting less of it. If you collect less, you have an easier time keeping it secure and disposing of it when you are done. The whole system is designed to keep the person (the data subject) in control of their own information.

A common objection to data protection rules goes something like this: “All this regulation will slow down business, discourage innovation, make it harder to deliver services.” The ODPC’s guidance notes reject this argument firmly.

The public sector guidance note puts it plainly: as Kenya pursues its digital transformation agenda, protecting citizens’ data is not a barrier to that ambition but its facilitator. An e-government platform that people do not trust will not be used.

A digital lending app that harvests your contacts without permission will eventually face a legal or reputational backlash or both.

The ODPC argues that privacy and progress are not enemies, but partners. Businesses and institutions that handle data responsibly build the kind of trust that sustains long-term relationships with their customers and citizens. Those who cut corners may gain a short-term advantage, but they are building on a shaky foundation.

But rules don’t matter unless they are enforced. The ODPC is doing its job. As of January 2026, the agency had seen a significant increase in its workload and enforcement actions, receiving more than 9,000 data privacy complaints and issuing more than 300 formal determinations.

Some 184 compensation orders had been issued to individuals whose data rights were violated. Twenty penalty notices and 134 enforcement notices had been served to non-compliant data controllers and processors. And more than 80 cases were successfully resolved through the alternative dispute resolution mechanism.

These enforcement actions show that these rules have teeth. We are sending the message that in Kenya, your personal data is not a free resource for whoever happens to collect it. It is an extension of your constitutional right to privacy. Treat it accordingly.

Kenyan doctors thriving in the UK

By the time Dr Liz Njeri boarded a flight to England in 2008, she was ready to abandon medicine altogether.

‘I was ready to leave medicine [despite the nine years of training] and do something else,’ she says. ‘It was just the frustration of the system, the lack of resources that got me to that point.’

Her husband’s posting to England for postgraduate study became the turning point: what might have been the end of Liz Njeri’s medical journey in Kenya instead became the beginning of a new chapter in Britain.

They chose Oxford Brookes University, which offered a partial scholarship for students relocating from developing countries.

Her path to the UK was slow. A missing paper derailed her initial visa bid, forcing an appeal that delayed her arrival until October 2008, two months after classes had begun.

She chose to start afresh in February 2009. Course materials arrived months ahead of formal registration, and Liz worked through them on her own, covering each module twice before sitting an exam. The costs were high.

The financial burden was steep. Liz found work at a sleep centre within Oxford University Trust, connecting patients to overnight monitors.

‘As a student, your visa allows you to work 20 hours a week,’ she says. ‘Over the summer, which is about two and a half months, you can work full-time. That is how most students survive.’

Night shifts paid around Sh5,000 per hour. Daytime work at a local clinic drawing blood brought in between Sh2,000 and Sh4,000. She raised enough to cover fees and save toward her medical registration exams.

A crisis and an opportunity

In 2009, the H1N1 swine flu pandemic hit. Her university connected her to a public health role through the emergency response. When the crisis passed, she was offered a continuing part-time position in public health, and she took it.

‘That public health role was a major milestone and shaped my decision to return to clinical practice in 2012,’ she says.

She finished her Master’s degree in public health in 2011. In 2012, she took her General Medical Council licensing exams and stepped into the National Health Service (NHS) as a fully registered doctor.

Career shock

Those first months inside the NHS were a shock of a different kind. Equipment she had only read about in textbooks now sat in front of her, waiting for a decision.

‘ECGs, CT scans, MRI scans, they will just be put in front of you to interpret,’ she says. ‘A nurse will come with a result and say, I need a decision now. They are waiting on the spot.’

Arterial blood gases were another one. A nurse would walk up, hand over the result, and stand there. A patient was waiting.

For a doctor fresh from a Kenyan district hospital where investigations were limited, this was a steep and fast climb.

‘I felt like I was thrown into the deep end and I had to swim fast,’ she says. ‘But the nurses are incredibly helpful, especially those who have come from abroad. They recognise that you will need some hand-holding and they are very quick at pointing you in the right direction.’

Something else was different, too. In England, doctors do not walk into a room carrying their title.

‘Most doctors will introduce themselves by first name when seeing a patient,’ she says. ‘I will not introduce myself as Dr Njeri. They use a first-name basis, and that is just the culture. They value my work rather than my title. That is lovely.’

She adapted faster than she expected. She had spent months inside the hospital setting before qualifying, watching ward rounds, listening to how doctors spoke with patients, learning that a nurse with 30 years of experience often knew more than a newly arrived junior doctor, and that asking was not weakness but good sense. All of it had been preparation without knowing it.

NHS work and Nairobi clinic

Today, she works only a day and a half per week for the NHS. The rest of her time goes to private practice, education, and a clinic she opened in Nairobi that just turned one-year-old.

The clinic, Slimure, sits on the second floor of Fortis Suite in Nairobi, handling women’s health, menopause, and weight loss. Most consultations she runs remotely from Hertfordshire, with a team on the ground in Nairobi for patients needing in-person care.

Starting the clinic cost her roughly Sh1.8 million.

The idea came from her own experience and her kitchen table conversations.

‘I have had patients who told me they had been looking for somebody to do menopause care for three or four years,’ she says.

‘It just breaks my heart that a woman will be suffering for that long because they have not found the right person. That is why I came up with the clinic.’

Outside her profession, she reads motivational books and listens to podcasts. She exercises at least four times a week: gym sessions, walks outside when the UK summer finally shows up, and swims when she gets the chance. She has children to keep up with, bikes to ride, and football to play.

The work-life balance is still something she is building, but she is building it on purpose.

Her long-term plan is to return to Kenya when her children go to university. She has been away for 18 years. The Nairobi clinic is the foundation she is laying to come home.

Gathoni’s psychiatrist chair road

About 200 miles west of Hertfordshire, across the English border into Wales, another Kenyan doctor is doing a different kind of work in the corners of Britain.

Dr Gathoni Kamau is also 44. The psychiatrist chairs the Specialty and Specialist Doctors committee at the Royal College of Psychiatry in Wales.

Her road to that chair was longer and stranger than most.

Dr Gathoni grew up in Eldoret and attended St. Andrew’s School, Turi from 1990. In 1998, she went to England for her A-levels at Monkton Combe School in Bath, finishing in 2000.

Two Kenyan doctors recount their journey of building medical careers in the UK while maintaining ties to home.

Pool

From there, she enrolled at Coventry University for a Bachelor of Laws, almost following in the footsteps of her father, a lawyer and advocate, who still practises in Nairobi. She left after her second year when family and personal circumstances pulled her back to Kenya.

Between 2002 and 2009, she worked in marketing, sales, and IT, far from anything that looked like medicine. But in 2000, right after finishing her A-levels, she was diagnosed with type 1 diabetes.

‘Having type 1 diabetes, you have to be your own doctor,’ she says. ‘I started having a curiosity about the human body, why things happen. It changed the trajectory of my life.’

In 2009, she enrolled at Wenzhou Medical University in China.

‘I went straight from Kenya to China and started medical school,’ she says. ‘Five years of practical training and one internship year. When I was graduating, my mother, who is a nurse here in the UK and is now retired, had been living here since 2004. So I flew straight from China and came to England.’

No cheap entry

To practise medicine in the UK as a foreign-trained doctor, she had to sit the Professional and Linguistic Assessments Board (PLAB)exams. The test has two parts. The first is a written clinical paper. The second places candidates in rooms with actors playing patients, and the score depends not only on clinical decisions but on how the patient feels during the interaction.

‘Coaching for those practical stations alone costs about Sh85,000; add flights from Kenya, food, accommodation across the preparation period, and a visitor visa. The money was flowing out before a single question had been answered,’ says Dr Gathoni.

‘The visa itself is not the issue,’ she says. ‘It is the other costs, the exams, the travel… That costs a lot of money.’ She passed her exams.

But getting the licence to practice was only part of it. She had to apply to the General Medical Council (GMC), the body that licenses doctors in the UK, get registered, and then find a job. That took four months. She also had to fly back to Kenya to process her work visa before she could legally return and start working.

When she finally did, she joined eight other foreign doctors at the same hospital trust, all new, and all navigating the same unfamiliar ground. The hospital had received specific funding to recruit from overseas because local hiring had left serious gaps in the workforce.

They were given subsidised accommodation within walking distance of the hospital. ‘The difficult part was learning the system, the cultural differences, how you speak to patients, and what is expected of you.’

What it takes

For anyone thinking of making the same journey, she is clear about what the path looks like. You need to sit and pass the PLAB exams. You need to register with the GMC. You need a job offer from a licensed NHS employer who will sponsor your work visa. The job must meet a minimum salary threshold.

You must pass an English language test. And you will be screened for tuberculosis before the visa is granted. The requirements are standard and clear, she says, but meeting them costs money at every single step before you earn a penny.

Now her working week runs from Tuesday to Friday, 9am to 5pm, with a 30-minute break after every six hours. Those days take her toward care homes, and out on home visits with elderly patients living with psychiatric illness.

Weekends do not bring rest. She is on call Saturdays and Sundays, shifts running up to 12 hours. As a non-residential on-call doctor, she can handle some of that from home, but the phone stays live, and the responsibility does not go anywhere.

‘You are working a 12-hour shift, and you do not see light until your day off,’ she says. ‘That can really affect your mental health. You have to find something that brings you back to yourself.’

To decompress, she goes to the gym. She holds a Master’s in Sports and Exercise Medicine and a Diploma in Football Medicine from FIFA. She competes locally in powerlifting, deadlifts, bench press, and squats.

Living under the yoke

The thing that follows her everywhere else, even in her strongest years, is the visa. ‘I call it living under the yoke of the visa,’ she says. ‘You are scared of doing anything wrong. If you do not get your visa renewed, you are finished. There are people here with families. Permanent residency is about Sh500,000 per person. You are constantly saving to renew your visas.’

That sits alongside the daily cost of living in Wales, money going home to family in Kenya, and immigration rules that shift with every change of government. Wales is cheaper than England, which helps stretch things further.

Some of her elderly patients speak Welsh as their first language, so she has learned enough to keep them comfortable during consultations.

CBK raises extra Sh29bn from June bonds amid funding pressure

The Central Bank of Kenya (CBK) has raised an additional Sh29.2 billion from the tap sale of June bonds as it races to close out domestic borrowing programme for the 2025/26 fiscal year amid higher resource requirements.

The government’s fiscal agent, which has already conducted two bond auctions this month, has again offered the 20- and 25-year papers to investors from Tuesday to Thursday or upon attainment of the Sh20 billion target.

Investors showed a strong interest in the tap sale, placing bids of Sh31 billion that saw the sale closed on the first day as the CBK accepted Sh29.2 billion.

Investors in the two papers will pay a discount of Sh99.2733 and Sh96.1351 respectively for the two papers which have coupons or fixed interest rates of 13.2 percent and 13.924 percent.

The price of the two papers has fallen below the par value of Sh100 as interest rates on the primary market edge higher, indicating that investors are unwilling to pay a premium for re-opened papers on the expectation that new issuances would offer relatively higher returns.

Bond prices and yields (the interest rates) have an inverse relationship where the cost of purchasing a bond edge higher when yields are headed lower.

At their earlier re-opening this month, the two papers surprised by registering a performance rate of 129.38 percent with investor bids reaching Sh77.6 billion against a target of Sh60 billion.

Investor interest was concentrated on the longer dated 25-year paper, which has 20 years to maturity, with bids totaling to Sh54.9 billion against Sh22.6 billion for the shorter dated bond with 11.8 years to maturity.

CBK accepted just Sh42.5 billion from the auction as it rejected aggressive investor bids, leaving Sh35 billion on the table which could now be mopped up in this week’s cash call-the tap sale.

Analysts had pre-empted multiple bond sales this month as the Treasury races to conclude the domestic borrowing program for the fiscal year amid increased spending needs mirrored by the first and second supplementary budget estimates.

‘We did expect a second issue in June given the huge budget financing gap with one month remaining to close the FY2025/26 financial year,’ analysts at Sterling Capital, a local investment bank said in a previous fixed income note.

‘The huge budget financing pressure follows the downward revision of tax revenues and upward revision of both domestic and external borrowing targets in the March 2025/26 supplementary budget.’

Actual receipts from gross domestic borrowing through the end of May 2026 stood at Sh1.179 trillion, leaving a deficit of about Sh360 billion to reach the Sh1.539 trillion revised estimates for the fiscal year as per National Treasury data. The target comprises Sh994.8 billion in net domestic borrowing and Sh544.2 billion in internal debt redemptions or rollovers.

CBK is expected to remain under pressure as the domestic borrowing target remains elevated over the medium term. This is as the National Treasury backs the local credit markets to plug in the largest portion of the budget deficit.

Net domestic borrowing for the financial year starting July 1 is estimated at 995.7 billion before falling to Sh545.9 billion in 2027/28 fiscal year.

The next domestic borrowing programme also starts against rising interest rates as investors seek cushioning from higher inflation.

The pressure has been underlined by a rise in Treasury bill rates with the return on the longest dated 364-day Treasury bill set to top nine percent in the near-term.

CBK however held its benchmark rate unchanged earlier this month at 8.75 percent, noting that the higher inflation rate is likely transitory as negotiations on the US-Israel war on Iran inch closer to a deal.

The apex bank has deemed the rise in the short-term interest rates as a market correction.

Portions of iconic Sh4.2bn Le Mac Tower go under hammer

A significant portion of the Sh4.2 billion Le Mac Tower building, one of Nairobi’s most recognisable skyscrapers famed for its glass skywalks and rooftop amenities, is set to go under the hammer after its developer was placed under administration over unpaid debts.

Auctioneers Garam Investments announced that they will auction 40 two-bedroom apartments spread across different levels of the 24-storey mixed-use tower, as well as five commercial units owned by Mark Prime Properties Limited, which is currently under administration.

‘All that parcel of land known as Land Reference Number 1870/VII/271, Le Mac, Church Road, Westlands, Nairobi, all registered in the name of Mark Prime Properties Limited (under administration),’ reads the auction notice. The Business Daily unsuccessfully tried to reach the auctioneer for further details on the planned sale.

The development sits on 1.32 acres along Church Road in Westlands, with Sanlam House and Safaricom headquarters among its prominent neighbours.

The move marks a dramatic turn for a project that once symbolised Nairobi’s race-to-the-sky real estate boom.

Le Mac emerged during a period when developers competed to build ever taller and more extravagant mixed-use developments in affluent neighbourhoods such as Westlands, Upper Hill and Kilimani.

The building comprises six floors of office space and 14 floors of residential apartments. The 23rd floor hosts a spa and business centre, while the rooftop features a swimming pool, gymnasium and children’s play area.

Its most striking feature remains the transparent glass walkway suspended about 126 metres above the ground. The 60-millimetre-thick glass floor allows visitors to look directly down at traffic and pedestrians below, offering panoramic views of Nairobi’s skyline and making the tower one of the city’s most distinctive buildings.

The developer, led by businessman Ravi Vasta, marketed the project as a luxury destination for wealthy Kenyans, expatriates and investors seeking trophy homes with hotel-style amenities.

The administration follows the appointment of Ponangipalli Venkata Ramana Rao (PVP) as administrator of Mark Prime Properties Limited over a loan whose value has not been publicly disclosed.

Court records show that the company has been involved in a series of legal disputes over the years as the ambitious project encountered financial and operational challenges.

In 2021, Mark Prime Properties Limited, the project’s promoter, sued Coulson Harney LLP Advocates in a dispute over Sh136.9 million in proceeds collected from purchasers of units at Le Mac.

The developer argued that the law firm should surrender funds received from buyers following the termination of their professional relationship. The advocates disputed the amount claimed, saying they had received Sh93.5 million and had already accounted for the funds.

The dispute highlighted tensions surrounding the sale and transfer of units within the development at a time when the company was seeking to complete registrations for buyers.

Mark Prime Properties was also embroiled in a dispute with Globe Developers Limited over commercial arrangements connected to the development. Court filings show the parties disagreed over contractual obligations and payments linked to the project, reflecting the increasingly complex financial pressures surrounding large-scale mixed-use developments.

Recent High Court proceedings have further exposed the financial distress facing the company, culminating in the appointment of an administrator and the planned disposal of assets to recover debts.

Mbadi steers clear of unapproved spending in second mini-budget

The National Treasury has avoided cash disbursements not approved by the National Assembly in its second mini-budget for the 2026/27 fiscal year, bucking a trend witnessed over the years. This indicates efforts to regain financial discipline following pressure by oversight agencies.

The Treasury had come under sharp scrutiny from oversight bodies like the Office of the Auditor-General for persistent disbursements of unapproved expenditures to government ministries, departments and agencies(MDAs).

While the Treasury is allowed to make the pre-approved disbursements under Article 223 of the Constitution, the exchequer has been accused of abusing the provision, including making unjustified appropriations.

The National Assembly’s Budget and Appropriations Committee (BAC) lauded the omission of unapproved spending in the second supplementary budget estimates and termed it a step in the right direction.

‘The Committee noted that the National Treasury had not issued or disbursed any funds under Article 223 of the Constitution,’ the BAC said in its report considering the second mini budget.

‘This demonstrates a commitment to fiscal discipline in budget implementation, adherence to the approved budget framework and strengthens parliamentary oversight of public expenditure.’

Article 223 of the Constitution allows the national government to spend money that is not appropriated if the amount allocated prior is deemed insufficient or where a need has arisen for expenditure or if money has been withdrawn from the Contingencies Fund.

The government, however, must not spend more than 10 percent of the sum appropriated by Parliament for that financial year unless in special circumstances.

The approval of the National Assembly on any monies spent under the provision is still expected and ought to be sought within two months after the first withdrawal of the money. Disbursements from the clause have come under sharp scrutiny as MDAs are deemed to use the provision to bypass scrutiny of suspect expenditures.

A recent audit report by Auditor-General Nancy Gathungu showed that MDAs spent Sh147.39 billion in the financial year 2022/23 without authorisation by Parliament.

Ms Gathungu deemed the use of the provision as a loophole prone to abuse by government entities looking to withdraw money from State coffers without public participation.

She warned that the lack of guidelines to inform emergency spending had enabled the constitutional provision to be misused. ‘Due to a lack of guidelines, MDAs have been requesting additional funding for items that could have been factored during the normal budget process. This is attributed to poor budget planning by MDAs,’ said Ms Gathungu.

Withdrawals under the provisions hit a record Sh147.39 billion in the 2022/23 cycle from just Sh1.1 billion in the financial year 2014/15.

Ms Gathungu noted that despite the Contingencies Fund being allowed to hold as much as Sh10 billion to cater for emergency spending, the government has deliberately avoided using the facility due to the stringent conditions attached to it.

‘Requests have remained low over the years, ranging from zero requests to a maximum of Sh3.1 billion per financial year,’ added Ms Gathungu.

Some disbursements under Article 223 have been controversial, including spending on fuel and maize flour subsidies in the closing days of the Uhuru Kenyatta presidency.

The most controversial utilisation of the unapproved funds included the Sh6.09 billion buyback of Telkom Kenya from private equity firm Helios Investment Partners, which resulted in a Parliamentary inquest.

Under the first 2025/26 supplementary estimates, the Treasury was put to task over Sh60 million spent toward the Siaya International Trade and Investment Conference, which was cancelled following the death of former Prime Minister Raila Odinga.

‘The Committee observed that the National Treasury has approved additional expenditures under Article 223 of the Constitution to respond to emerging needs. However, some expenditures were not justified, particularly Sh60 million spent towards the Siaya International Trade and Investment Conference, which did not take place,’ the BAC said in an earlier report on its consideration of the first supplementary budget estimates.

Mbadi steers clear of unapproved spending in second mini-budget

The National Treasury has avoided cash disbursements not approved by the National Assembly in its second mini-budget for the 2026/27 fiscal year, bucking a trend witnessed over the years. This indicates efforts to regain financial discipline following pressure by oversight agencies.

The Treasury had come under sharp scrutiny from oversight bodies like the Office of the Auditor-General for persistent disbursements of unapproved expenditures to government ministries, departments and agencies(MDAs).

While the Treasury is allowed to make the pre-approved disbursements under Article 223 of the Constitution, the exchequer has been accused of abusing the provision, including making unjustified appropriations.

The National Assembly’s Budget and Appropriations Committee (BAC) lauded the omission of unapproved spending in the second supplementary budget estimates and termed it a step in the right direction.

‘The Committee noted that the National Treasury had not issued or disbursed any funds under Article 223 of the Constitution,’ the BAC said in its report considering the second mini budget.

‘This demonstrates a commitment to fiscal discipline in budget implementation, adherence to the approved budget framework and strengthens parliamentary oversight of public expenditure.’

Article 223 of the Constitution allows the national government to spend money that is not appropriated if the amount allocated prior is deemed insufficient or where a need has arisen for expenditure or if money has been withdrawn from the Contingencies Fund.

The government, however, must not spend more than 10 percent of the sum appropriated by Parliament for that financial year unless in special circumstances.

The approval of the National Assembly on any monies spent under the provision is still expected and ought to be sought within two months after the first withdrawal of the money. Disbursements from the clause have come under sharp scrutiny as MDAs are deemed to use the provision to bypass scrutiny of suspect expenditures.

A recent audit report by Auditor-General Nancy Gathungu showed that MDAs spent Sh147.39 billion in the financial year 2022/23 without authorisation by Parliament.

Ms Gathungu deemed the use of the provision as a loophole prone to abuse by government entities looking to withdraw money from State coffers without public participation.

She warned that the lack of guidelines to inform emergency spending had enabled the constitutional provision to be misused. ‘Due to a lack of guidelines, MDAs have been requesting additional funding for items that could have been factored during the normal budget process. This is attributed to poor budget planning by MDAs,’ said Ms Gathungu.

Withdrawals under the provisions hit a record Sh147.39 billion in the 2022/23 cycle from just Sh1.1 billion in the financial year 2014/15.

Ms Gathungu noted that despite the Contingencies Fund being allowed to hold as much as Sh10 billion to cater for emergency spending, the government has deliberately avoided using the facility due to the stringent conditions attached to it.

‘Requests have remained low over the years, ranging from zero requests to a maximum of Sh3.1 billion per financial year,’ added Ms Gathungu.

Some disbursements under Article 223 have been controversial, including spending on fuel and maize flour subsidies in the closing days of the Uhuru Kenyatta presidency.

The most controversial utilisation of the unapproved funds included the Sh6.09 billion buyback of Telkom Kenya from private equity firm Helios Investment Partners, which resulted in a Parliamentary inquest.

Under the first 2025/26 supplementary estimates, the Treasury was put to task over Sh60 million spent toward the Siaya International Trade and Investment Conference, which was cancelled following the death of former Prime Minister Raila Odinga.

‘The Committee observed that the National Treasury has approved additional expenditures under Article 223 of the Constitution to respond to emerging needs. However, some expenditures were not justified, particularly Sh60 million spent towards the Siaya International Trade and Investment Conference, which did not take place,’ the BAC said in an earlier report on its consideration of the first supplementary budget estimates.

Why Mbadi deferred Sh10bn banks’ core capital rule

Claims of a potential slowdown in bank lending to households and businesses this year saw the National Treasury extend the Sh10 billion core-capital requirement, setting a one-off hard deadline of December 2032.

Cabinet Secretary to the National Treasury John Mbadi held engagements with banks ahead of the 2026/27 budget speech and agreed to the request for the removal of annual milestones on meeting the broader Sh10 billion core capital requirement.

Banks were initially expected to have at least Sh3 billion in core capital by the end of December last year and raise this limit further to Sh5 billion this year before meeting 2027 and 2028 annual milestones of Sh6 billion and Sh8 billion, respectively, and finally reach Sh10 billion in December 2029.

The lenders, however, informed Mr Mbadi that banks short of the capital targets were likely to hold back on lending to households and businesses as they sought to preserve funds to meet the higher regulatory requirements.

‘Allowing a longer timeline facilitates banks to serve customers better and uninterrupted, deploying more capital into lending to the private sector,’ said Raimond Molenje, the chief executive officer of the Kenya Bankers Association (KBA).

‘Our goal as KBA is to have growth in private sector lending in double digits at over 14 percent, and this policy accommodation will go a long way in realising this double-digit growth.’

Banks claimed that, without the alteration by Mr Mbadi, private sector lending would have slowed down this year as smaller banks pushed to meet the Sh5 billion minimum core capital requirement.

Private sector lending has been on the recovery path over the past 12 months, supported by an easing of the Central Bank of Kenya (CBK) monetary policy, which has supported increased credit flows to key sectors of the economy.

Monthly credit growth to the private sector reached a high of 9.3 percent in May 2026, rebounding from a growth rate of 4.5 percent at the same time last year and bordering on touching double-digits for the first time since the opening quarter of 2024.

The recovery has been anchored on a steady decline in average commercial bank lending rates, which fell to 14.5 percent in May from 14.7 percent in February 2026.

‘Short-term interest rates and commercial banks’ lending rates have declined in line with the recent reductions in the Central Bank Rate (CBR),’ CBK said last week.

The ease in commercial bank lending rates and the recovery of private sector credit has also coincided with the adoption of the revised risk-based credit pricing model, which seeks to have the loan rates quickly mirror changes to CBK’s monetary policy.

CBK noted that the cost of borrowing has continued to come down while credit growth has improved despite holding its benchmark rate unchanged in two consecutive policy meetings.

‘We have seen commercial bank lending rates decline from 17.2 percent to 14.5 percent at present. The intention of lowering the CBR was to stimulate credit to the private sector, and indeed, we have also seen that lending by banks to the private sector has grown from a contraction of 2.9 percent in January of 2025 to 9.3 percent in May 2026,’ said CBK Governor Kamau Thugge.

The extension of the capital raising deadline will come as a reprieve to at least four lenders who were yet to meet the December 2025 minimum core capital requirement of Sh3 billion, risking the revocation of their banking licenses and reclassification as microfinance banks.

The four banks included Credit Bank, Consolidated Bank of Kenya, Development Bank of Kenya (DBK) and Access Bank Kenya.

Credit Bank had been racing to meet the higher capital requirement through a rights issue seeking Sh4.5 billion, while the State-owned DBK and Consolidated Bank had been seeking support from their primary shareholder-the National Treasury.

Access Bank Kenya had been counting on its merger with the National Bank of Kenya (NBK), its most recent acquisition, to achieve compliance with the regulatory requirement.

Banks say they now have adequate time to engage with potential investors without compromising on the industry’s role in the economy.

‘This will allow banks ample time to engage with potential investors and strategic partners while preserving the value of banks,’ Mr Molenje added.

Kenya’s higher capital threshold mirrors similar moves in neighboring Uganda and Tanzania, but the East African Community peers have given their lenders a shorter window to meet the enhanced capital requirements.

The Bank of Uganda, for instance, announced a six-fold increase in the minimum absolute paid-up capital requirement for tier I credit institutions licenses in November 2022 to UGX150 billion (Sh5.23 billion), to be reached by mid-2024.

The adjustment to Kenyan banks’ core capital increase by the National Treasury comes a year after its first pronouncement at the 2025 budget statement. The change will require further amendments to the Central Bank of Kenya Act. In announcing the changes, the Treasury said the longer compliance period would instill investor confidence and maintain shareholder value.

‘While the government firmly upholds the strategic necessity of raising the minimum core capital, it is prudent that this transition has been managed in a manner that is least disruptive to credit access and financial services delivery, particularly to the Micro, Small and Medium Enterprise segment and other niche markets currently served by the banking industry,’ said Mr Mbadi last Thursday.

‘This will provide the flexibility necessary for institutions to pursue measured, commercially sound, and market-sensitive capital-raising strategies in a manner that preserves shareholder value and sustains investor confidence.’

Court upholds KeNHA rule on engineering technologists

A court has upheld Kenya National Highways Authority’s (KeNHA) requirement that applicants for road engineer jobs be registered with the Engineers Board of Kenya, dealing a setback to engineering technologists seeking access to the positions.

The Employment and Labour Relations Court dismissed a petition filed by the Institution of Engineering Technology of Kenya (IET-K), ending a legal challenge that had frozen the recruitment of 27 Engineer (Roads) positions advertised by KeNHA in December last year.

The ruling comes amid a growing dispute over professional boundaries in the engineering sector, where engineering technologists have increasingly challenged hiring criteria they say exclude qualified graduates from public service jobs.

The court found that engineers and engineering technologists are distinct professions established under separate laws, training frameworks and regulatory systems.

“The two professions are distinct and intended to be so,” the judge said.

“While engineers are defined as creators, designers and developers, engineering technologists are defined as implementors of technology education,” he added.

The contested vacancies were advertised on December 2, 2025, and later re-advertised on December 9. The positions required applicants to hold engineering degrees and be registered by the Engineers Board of Kenya as graduate engineers.

IET-K argued that the requirement unlawfully locked out its members, who are registered by the Kenya Engineering Technologists Registration Board, despite being qualified to perform many of the duties listed in the job description.

The organisation asked the court to quash the recruitment exercise and compel KeNHA to issue a fresh advertisement for the positions.

KeNHA rejected the claims and said it was implementing career progression guidelines approved by the Public Service Commission.

The authority told the court that engineers and engineering technologists follow different academic pathways, perform different functions, and occupy separate career streams within the organisation.

KeNHA explained that road engineers are tasked with functions such as design, feasibility studies, quality assurance, and professional decision-making.

On the other hand, engineering technologists perform more applied, technical, and support roles. It attributed this distinction to fundamental differences in academic training and professional competence.

According to court filings, Engineer (Roads) positions form part of the engineering cadre, while engineering technologists have their own progression structure and entry-level positions.

The Engineers Board of Kenya supported KeNHA’s position and argued that only persons registered under the Engineers Act can practise as engineers or offer professional engineering services.

In dismissing the petition, the court said IET-K had failed to prove that engineering technologists and engineers were similarly situated for purposes of recruitment.

The court found that the petitioner had provided no evidence showing that engineering technology qualifications were equivalent to civil engineering or civil and structural engineering degrees required for the positions.

“The respondent’s advertisement was lawful, just, reasonable and consistent with its human resource instruments and the law,” the court said.

The ruling lifted orders that had stalled the recruitment process since December.

The engineering technologists have other similar petitions challenging requirements tying engineering jobs to registration by the Engineers Board of Kenya.

Organisations must prioritise IFRS 18 readiness to keep disruptions at bay

IFRS 18, Presentation and Disclosure in Financial Statements, is the new IFRS accounting standard effective from January 1, 2027. The new standard was developed in response to investor feedback to improve comparability of financial performance between entities and enhance transparency in financial reporting.

IFRS 18 will impact all organisations that prepare financial statements using the IFRS Accounting Standards. Some of the changes include the defined categories and subtotals in the profit or loss statement.

The impact of this change will vary for each entity.

For example, organisations would need to amend their reporting packs, chart of accounts, and ledgers in preparation for IFRS 18-aligned reporting. Organisations that have automated or digitised reporting processes would need to implement these changes across their systems and tools. Organisations also face numerous policy choices regarding the classification of items in profit or loss statements.

IFRS 18 introduces other changes, including enhanced principles for aggregation and disaggregation in the primary financial statements and related notes. It would impact how organisations label and classify items on the face of their primary financial statements.

Additional requirements under IFRS 18 include disclosures related to Management-defined Performance Measures (MPMs). MPMs are subtotals of income and expenses that communicate management’s view of the organisation’s financial performance to users of the financial statements and to users outside the financial statements.

Organisations need to commence identifying their MPMs and incorporating them into the financial statements.

For example, organisations with a December 31 year-end have very limited time before IFRS 18 becomes effective, including time to prepare their first interim financial statements in 2027 under IFRS 18.

Organisations should invest in building teams’ capacity, conduct a gap and impact assessment, engage stakeholders on the changes, seek internal alignment on policy choices, implement the agreed changes, including systems, reporting packs, and the chart of accounts, and update their accounting policy disclosures.

While IFRS 18 would not affect the recognition and measurement of items in the financial statements, the matters requiring attention and deliberate preparation are no less for this standard than for one with recognition and measurement changes.

Organisations should prioritise their IFRS 18 preparedness to avoid disruptions to their business and financial reporting processes.