NTSA Introduces Sweeping Reforms for Matatus & Taxis

In Summary

• Infrastructure bonds remain a tax-free, high-yield investment option, accounting for a significant portion of Kenya’s domestic borrowing.
• Safaricom’s undersea cable project seeks to bolster its data business and reduce dependency on third-party networks.
• The IEBC selection panel has been sworn in, with CJ Koome calling for a merit-based, transparent recruitment process to uphold Kenya’s democratic integrity.
• KPA’s proposed tariff review may raise import costs, sparking concerns of higher consumer prices amid Kenya’s challenging economic climate.
• NTSA’s proposed regulations seek to improve safety in the commercial transport sector by mandating stricter standards for insurance, equipment, and vehicle features.
• Kenya is using a Ksh8 billion debt-for-climate swap with Germany to fund a geothermal project, boosting clean energy and reducing electricity costs.

Holders of Kenya’s infrastructure bonds (IFBs) are benefiting from a tax exemption worth Ksh25.8 billion annually, as these securities are not subject to the 10-15% withholding tax levied on ordinary bonds, as reported by The Business Daily. Data from the Nairobi Securities Exchange (NSE) reveals there are 24 IFBs worth Ksh1.803 trillion, making up 37% of all bonds in the market. Despite Treasury’s failed bid to impose taxes on new IFBs in 2024, the bonds remain attractive to investors due to high yields, with rates reaching up to 18.46%.

The nine members of the IEBC selection panel, appointed by President William Ruto, were sworn in on Monday at the Supreme Court Building. The Star reports that Chief Justice Martha Koome urged them to ensure integrity, transparency, and speed in the recruitment process. She emphasised that the future of Kenya’s democracy relies on credible electoral systems, urging the panel to select commissioners based solely on merit. Koome highlighted the prolonged two-year vacancy at the IEBC as a major democratic disruption and stressed the importance of keeping political influence out of the process. She reminded the panel of their role in shaping Kenya’s democratic future, including the 2027 elections. 

In a report by The Business Daily, Safaricom has applied for regulatory approval to build its first undersea fibre optic cable, aiming to enhance high-speed internet access, increase bandwidth, and reduce reliance on third-party providers like Telkom Kenya and SEACOM. The project, which will involve a consortium, is part of Safaricom’s strategy to secure its data market leadership amid growing competition from players like Starlink. Undersea cables, known for their high-speed and reliability, are critical for Safaricom's expansion into data services as it offsets slower growth in voice revenue.

Consumers and businesses could face higher prices as the Kenya Ports Authority (KPA) considers increasing service fees for operations like ship docking, cargo handling, and storage. KPA announced plans to review its 2012 tariff structure to improve service delivery and address rising operational costs. Stakeholder consultations are scheduled for February 5th in Mombasa and February 11th in Nairobi. Traders warn that increased port fees could raise import costs, potentially driving up prices for goods and exacerbating inflation. KPA Managing Director Captain William Ruto emphasised that consultations aim to balance service improvement with minimising the impact on consumers and businesses, as purported by The Standard.

Kenya is constructing the Bogoria-Silale geothermal project to settle a Ksh8 billion debt owed to Germany through the country’s first debt-for-climate swap. As reported by The Business Daily, the agreement ensures the debt will be forgiven once the project, aimed at generating 300MW of renewable energy, is fully delivered. This initiative will expand clean energy supply to the national grid, improve rural power access, and reduce electricity costs. The model enables Kenya to redirect debt obligations into climate action, helping stabilise the economy while addressing renewable energy goals. The project is expected to be completed by June this year.

Capital Business reports that the National Transport Safety Authority (NTSA) has released draft regulations for commercial vehicles, requiring them to meet stricter safety standards. Under the 2025 proposals awaiting approval by the National Assembly, all commercial vehicles must have third-party insurance, valid inspection certificates, speed limiters, and telematic systems that adhere to Kenyan Standards. Vehicles are also required to install retro-reflective contour markings, underride protection devices, and carry fire extinguishers and first aid kits for emergencies. The new rules aim to enhance safety and compliance within Kenya's commercial transport sector.