Parts of Mombasa Port to be Handed Over to the Private Sector in 30 Year Leases

In Summary:

• The government is expanding mortgage access to non-salaried workers under a scheme that guarantees up to 40% of defaulted loans, making it easier for informal sector workers to secure home financing.
• EPRA shut down nine fuel stations for selling adulterated fuel and diverting export-bound petroleum for local sale after conducting nationwide inspections.
• The Treasury is reviving plans to lease Kenya Ports Authority (KPA) assets, including Lamu Port and Mombasa berths, to private investors for up to 30 years.
  
• The State Department for Higher Education is under scrutiny after an audit flagged Ksh12.5 million in unaccounted fuel expenses, raising concerns over mismanagement.
  
• Mwananchi Credit is restructuring its operations due to rising non-performing loans, leading to the discontinuation of check-off loan disbursements.
  
• Private sector credit contracted by 1.4% in 2024 due to high lending rates and tight monetary policy, with banks becoming more cautious amid rising non-performing loans.
  
• Insurers have been offering excessive commissions to agents, violating regulatory limits set by the IRA, which has warned of penalties.
  
• The Treasury plans to cap interest rates on pending contractor payments, which have reached Ksh150 billion, to curb excessive interest accruals.
  
• Standard Gauge Railway (SGR) passenger numbers dropped by 10% in 2024 following fare hikes, though revenue increased by 39% to Ksh4.09 billion.
  
  

In a report by The Business Daily, the Treasury has revived plans to lease Kenya Ports Authority (KPA) assets, including the Lamu Port Container Terminal and multiple berths at the Mombasa Port, to private investors. This follows a previous attempt in 2022, when Dubai-based DP World was invited to manage port operations. The government is now seeking a transaction advisor to oversee the leasing process, which could see private operators run the facilities for 30 years. The move comes as the Lamu Port, which was opened in 2021, struggles to attract business, handling only 1,779 twenty-foot equivalent units (TEUs) in 2022 against its annual capacity of 1.2 million TEUs. Tanzania has already leased part of its Dar es Salaam Port to DP World, adding pressure on Mombasa to improve efficiency.

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Non-salaried workers in Kenya will soon access subsidised mortgages of up to Ksh6 million under a State-backed scheme that guarantees up to 40% of defaulted loans. The Kenya Mortgage Guarantee Trust (KMGT), formed by the Kenya Mortgage Refinance Company (KMRC), will share the risk with lenders to encourage banks and savings and credit cooperative societies (SACCOOs) to offer home loans to informal sector workers. According to The Business Daily, KMRC, which provides long-term funding at a fixed 5% interest rate, previously required proof of regular income, locking out many informal workers. The scheme aims to expand homeownership in a market where high mortgage costs have limited access, with Kenya recording only 30,015 home loans worth Ksh281.5 billion by December 2023, according to the Central Bank of Kenya.

The Energy and Petroleum Regulatory Authority (EPRA) has shut down nine filling stations across Kenya in its ongoing crackdown on the sale of adulterated fuel and export-bound petroleum products being sold locally. Between January and March 2025, EPRA conducted 5,978 tests at 1,360 petroleum sites, with 13 stations flagged for non-compliance. Nine of these stations, including some in Kisumu, Trans Nzoia, and Kajiado, were found selling adulterated or export-bound fuel and remain closed. Two repeat offenders were also identified, and several stations have been allowed to reopen after meeting compliance standards and paying fines as reported by the People Daily. 

The State Department for Higher Education is under scrutiny after an audit revealed that Ksh12.5 million in fuel expenses could not be accounted for. According to The People Daily, the Auditor General flagged missing fuel registers and incomplete records, making it difficult to track fuel consumption. 

In a report by The Star, Mwananchi Credit has announced restructuring its operations due to rising non-performing loans (NPLs), resulting in the scrapping of its check-off loan disbursements. The company clarified that staff in the check-off loan department are not being fired but are being asked to reapply for positions, with interviews starting soon. 

In a report by The People Daily, Kenya’s private sector credit contracted by 1.4% in the 12 months to December 2024, a sharp reversal from the previous year's 13.9% growth, as tighter monetary policy, higher lending rates, and a stronger shilling led to reduced borrowing capacity. The total credit extended to businesses stood at Ksh3.9 trillion, with the banking sector holding 81.2% of total lending. The decline was accompanied by an 8.3% rise in non-performing loans (NPLs), forcing banks to adopt a more cautious approach to lending. Key sectors such as mining, finance, and manufacturing saw significant credit reductions, while sectors like agriculture and trade saw modest growth. The tightening of monetary policy by the Central Bank of Kenya (CBK) to combat inflation and stabilize the shilling contributed to the credit squeeze. Despite CBK's later rate cuts, lending rates remained high, further limiting credit access. 

Insurers have breached commission limits set by the Insurance Regulatory Authority (IRA) in a scramble for market share. Some insurers have been offering excessive commissions to agents and brokers, risking their long-term financial sustainability. According to a report by The Business Daily, the IRA has issued a warning, threatening penalties for companies paying commissions above the legally prescribed limits. The commissions, paid to brokers for each policy sold or renewed, can undermine insurers' profitability by inflating operating expenses. In 2023, commissions paid under direct insurance business rose by 23%, outpacing the growth of gross premium income. 

The National Treasury has announced plans to cap interest rates for contractors to address the mounting debts owed by the government, which have ballooned due to delayed payments and accrued interest. Pending bills in the sector have reached Ksh150 billion, with interest fees making up a significant portion. The government is negotiating to cap interest claims, with an agreement settling at around 35%. The Ministry of Roads and Transport holds the highest outstanding payments, amounting to Ksh180.9 billion as reported by the People Daily. 

Passenger traffic on Kenya's Standard Gauge Railway (SGR) saw its first drop since the pandemic, with a 10% decrease in passengers to 2.44 million in 2024. This decline followed a fare hike, which saw ticket prices rise by up to Ksh1,500. However, the fare increase boosted revenues by 39%, reaching Ksh4.09 billion. According to the Business Daily, the SGR continues to struggle with its financial sustainability, particularly due to declining cargo revenues, which fell by 4% to Ksh13.97 billion. Competition intensified after the government revoked a policy mandating the use of SGR for all Mombasa port cargo. 

An Auditor General report has revealed issues with the pricing of energy-saving jikos purchased by the State Department for Arid and Semi-Arid Lands. According to The People Daily, the cost of each jiko was inflated by as much as 280%, increasing from a proposed price of Ksh5,000 to Ksh19,000, leading to a total expenditure of Ksh34 million for 400 units. If purchased at the original price, the cost would have been Ksh2 million. 

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