In Summary
Turkana Central Deputy County Commissioner Thomas Siele has announced that residents must register for the Social Health Authority (SHA) to receive relief food, despite the program being voluntary. Siele emphasised the importance of SHA in ensuring access to healthcare, saying the government does not want to provide food only for people to struggle with medical bills later. The Ministry of Health reports that 19.3 million people have registered for SHA, but uptake in counties like Turkana, West Pokot, and Samburu remains low, as reported by The Star.
Treasury Cabinet Secretary John Mbadi has warned to prepare for tougher economic times in the coming months. Mbadi said the county's financial situation has been made dire by the fact that many historical loans are falling due at a time when foreign aid is ending. He referenced the United States' recent decision to stop all foreign assistance through USAID. As reported by Citizen TV, Mbadi said Kenya should expect a similar move from the European Union (EU). The CS noted that the government will turn inward, suggesting a possible increase in domestic taxes as the country struggles with high debt levels, including Ksh10 trillion in external and domestic debt. Two-thirds of the annual revenue now goes towards debt servicing. Despite these challenges, the Treasury CS assured that the Judiciary and other institutions in the justice sector would receive positive attention from the government to combat corruption. Mbadi also confirmed that Kenya had agreed to bypass the ninth review of its IMF lending programme, but denied the country had failed to meet the required targets.
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In a report by Money254 , the suspension of CRB listings in 2020 has led to a surge in over-indebtedness among Kenyans, with borrowers accessing multiple digital loans without lenders having visibility into their credit history. According to Digital Financial Services Association of Kenya (DFSAK) Chair Kevin Mutiso, one borrower earning Ksh55,000 per month took loans amounting to Ksh1,071,000 from 52 different digital platforms. The number of negatively listed borrowers has fluctuated over the years, with men more likely to default than women. With Kenyans borrowing Ksh500 million daily from digital lenders, DFSAK has introduced a framework to consolidate loans and is calling for government regulations to centralise credit reporting.
In a report by Reuters, Kenya Airways has reported a pretax profit of Ksh5.53 billion in 2024, marking its first profit since 2013, driven by foreign-exchange gains as the local currency strengthened by over 20% against the dollar. The airline’s operating profit also grew to Ksh16.62 billion from Ksh10.53 billion in 2023, supported by increased revenue and reduced costs. Kenya Airways had been struggling with heavy debt since its expansion in 2018, worsened by the pandemic and a weak shilling, but recent government support, including a Ksh19.4 billion ($150 million) loan repayment, has helped stabilise operations. The airline’s board chairman, Michael Joseph, expressed optimism that ongoing improvements at JKIA and fleet expansion will further strengthen its performance.
The Energy and Petroleum Regulatory Authority (Epra) has announced further increases in oil marketers’ and transporters’ margins in July 2025 and July 2026, following the first round implemented this month. In the current pricing cycle, Epra raised margins for petrol from Ksh12.39 to Ksh15.24 per litre, diesel from Ksh12.36 to Ksh15.16, and kerosene from Ksh12.36 to Ksh15.09, while also increasing fuel transportation and distribution charges. The Business Daily reports that although fuel prices remained unchanged due to increased subsidies, taxpayers will bear the cost of compensating oil marketers. The remaining margin increases will be phased into fuel prices over the next two years to ease the transition for the industry.
Kenyan commercial banks reduced lending to parastatals by Ksh30.9 billion in 2024, the biggest cut in over a decade, as high default rates and a Treasury freeze on approvals hit borrowing. The decline, as reported by The Business Daily, pushed outstanding credit to State-owned enterprises (SOEs) to Ksh65.4 billion, a level last seen in 2015, with many struggling to service debt. More than half of SOEs with loans failed to make repayments by June 2024, forcing the Treasury to bail out entities like Kenya Airways with Ksh17.4 billion. The Central Bank of Kenya had earlier warned against lending to SOEs, citing misuse of funds for recurrent expenses rather than development projects. With borrowing costs rising to 24% and banks tightening credit standards, total private sector loans also dropped by 1.37% to Ksh3.86 trillion by December 2024, the first such decline since 2002.
The Central Bank of Kenya (CBK) has warned commercial banks against maintaining high lending rates despite recent reductions in the Central Bank Rate (CBR), currently at 10.75%, stating that those failing to comply will face heavy penalties. According to The Eastleigh Voice, CBK Governor Kamau Thugge told the National Assembly Finance Committee that the regulator has begun onsite inspections to ensure banks lower their rates in line with cheaper borrowing costs. He noted that some banks prefer lending to the government over businesses due to high non-performing loans and that the increased domestic borrowing from Ksh400 billion to Ksh584 billion has contributed to rising rates. MPs urged CBK to enforce interest rate cuts, with some calling for legislative intervention, but Thugge warned that reintroducing rate caps could lead to credit rationing. The CBK is finalising a new risk-based loan pricing model to improve lending transparency and align with global standards.
In a report by The Business Daily, L'Oréal East Africa has won a tax dispute against the Kenya Revenue Authority (KRA) after the Tax Appeals Tribunal ruled that 12 of its face wash products, including Cerave SA Smoothing Cleanser and Cerave Acne Control Cleanser, should be classified as washers like soap, exempting them from excise duty. KRA had initially demanded Ksh7.8 million in excise duty, arguing the products fell under beauty items, which attract a 15% excise duty and, in some cases, 16% VAT. However, the tribunal ruled that the products’ surfactants classify them as cleansers rather than beauty products. The case stemmed from a Post Clearance Audit (PCA) covering five years to September 2023, where KRA initially demanded Ksh409.4 million before reducing it to Ksh11.2 million. L'Oréal paid Ksh3.3 million for royalties but successfully challenged the Ksh7.8 million tax on misclassified products.
The price of maize has surged by 45% since January, reaching Ksh4,800 per bag, with projections indicating it could hit Ksh5,500 by April. The Poultry Breeders Association of Kenya (PBAK) and the Association of Kenya Feed Manufacturers (AKAFEMA) have warned that rising maize prices are making unga increasingly unaffordable while also straining poultry farmers due to higher feed costs. Supermarket prices for a 2kg packet of maize flour have risen from Ksh100-Ksh120 in early January to between Ksh145-Ksh160. The two associations have urged the government to waive import duties on maize to stabilise prices and prevent further economic strain, as reported by The Star.
Parliament has summoned the Capital Markets Authority (CMA) to explain the National Social Security Fund’s (NSSF) involvement in questionable bond transactions that could lead to a Ksh2 billion loss. The Central Bank of Kenya (CBK) flagged the transactions between May and July 2024, revealing that NSSF purchased bonds at inflated prices and, in some cases, sold and repurchased the same bonds at a loss. CBK alerted CMA on August 19, 2023, but received a response only on March 5, 2025, seeking more information. Auditor-General Nancy Gathungu’s report also raised concerns over NSSF investing in struggling firms and non-existent housing projects, leading MPs to demand action from financial regulators, as reported by The Business Daily.
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