Kenya Insights

Category: Business

  • DStv, GOtv Shed 1.2m Kenyan Subscribers in 12 Months as Pay-TV Market Collapses

    DStv, GOtv Shed 1.2m Kenyan Subscribers in 12 Months as Pay-TV Market Collapses

    MultiChoice is facing an exodus of Kenyan households from its pay-TV services, with its flagship platforms DStv and GOtv shedding a combined 1.2 million subscribers in just 12 months, according to fresh data from the Communications Authority of Kenya (CA).

    DStv subscriptions stood at just 188,824 by June 2025, a sharp fall from 1.2 million the previous year. GOtv, which had dominated the low-cost digital terrestrial TV segment, tumbled to 314,520 from 2.8 million.

    Together, the two accounted for the bulk of a 77 percent contraction in the country’s broadcasting market—the steepest decline on record.

    The rout was particularly brutal in the digital terrestrial TV segment, where GOtv competes with StarTimes.

    Subscriptions in the category fell 89 percent year-on-year, with StarTimes itself plunging to 492,330 from 1.7 million. Direct-to-home satellite TV, dominated by DStv, also shrank 67 percent.

    Only Wananchi Group’s Zuku bucked the trend, growing its cable TV customer base by 20 percent to more than 64,000 subscribers.

    Analysts point to runaway pricing as a major trigger. MultiChoice has raised its tariffs five times in three years, pushing DStv Premium—the top bouquet to KES 11,700 ($91) a month, up from KES 7,500 ($58) in 2022.

    Many households now find the service unaffordable, especially against the backdrop of high living costs.

    “Take away the bars, restaurants, a few offices, and the neighbourhood football shacks, and there’s no one left,” said Paminus Osike, a former DStv customer who abandoned the service earlier this year.

    Streaming alternatives are intensifying the pressure. Netflix, whose plans start at just KES 200 ($1.55) for mobile users, has rapidly grown as a go-to option for general entertainment, despite lacking live sports.

    Showmax, also owned by MultiChoice charges KES 520 ($4) for its entertainment plan, but the shutdown of Showmax Pro in early 2024 alienated football fans who preferred watching matches on their TV screens rather than on mobile devices.

    Piracy adds another headache.

    Football matches and premium shows are widely streamed illegally through apps and websites, eroding demand for expensive pay-TV subscriptions.

    MultiChoice’s Premier League rights, which expire this year, have also drawn criticism from Kenyan fans who argue that constant renewals merely translate into higher bills with little additional value.

    Bars and hotels remain among the last bastions of DStv viewership, but even they are experimenting with cheaper or unauthorised solutions as margins narrow.

    The mass customer flight coincides with MultiChoice’s change of control.

    French broadcaster Groupe Canal+ recently closed its takeover of the Johannesburg-listed firm, securing 46 percent ownership with more acceptances expected. The merger gives the combined company over 40 million subscribers across nearly 70 countries.

    Kenya’s sharp decline, however, illustrates the daunting task ahead: convincing value-conscious consumers to stay loyal to premium satellite television in a market that is shifting decisively toward streaming, free-to-air programming, and piracy.

    Market Watch: What DStv, GOtv Collapse Means for Kenya’s Entertainment Market

    Kenya’s broadcasting sector is undergoing a seismic shift as pay-TV loses ground to cheaper and more flexible alternatives. The collapse of DStv and GOtv subscriptions is not merely a MultiChoice problem—it points to structural change in how Kenyans consume entertainment.

    The contraction of 77 percent in broadcasting subscriptions within a year highlights the vulnerability of business models built on premium sports rights and expensive bouquet packaging.

    Industry insiders note that MultiChoice’s repeated price hikes have accelerated churn at a time when disposable incomes are already under strain.

    Streaming platforms, both legal and illegal, are filling the vacuum.

    Netflix, Showmax, and a growing universe of pirated apps now cater to households that once depended on set-top boxes.

    With mobile data penetration climbing and smartphones becoming cheaper, the shift toward streaming looks irreversible.

    The pain is not evenly shared.

    Cable operator Zuku is emerging as a niche winner, growing 20 percent in the past year.

    Its fixed-broadband customers are increasingly bundling pay-TV into internet subscriptions, offering better value. Analysts say this convergence of internet and entertainment could define the next phase of Kenya’s media market.

    For advertisers, the collapse of pay-TV limits mass-audience reach but amplifies the value of free-to-air TV and digital platforms. Meanwhile, the looming expiry of MultiChoice’s Premier League rights could trigger a reset in sports broadcasting, with questions over whether local players or pirate operators will capture disillusioned football fans.

    The broader takeaway: Kenya’s entertainment market is moving toward affordability, accessibility, and flexibility. Pay-TV, once a symbol of middle-class aspiration, is fast becoming obsolete.

    By the Numbers: Kenya’s Pay-TV Meltdown

    The collapse of traditional TV subscriptions has left MultiChoice scrambling to hold on to its Kenyan customers.

    Kenya’s pay-TV market shrank sharply between 2024 and 2025, with DStv losing 84% of its subscribers and GOtv 89%. StarTimes dropped 71%, while Zuku was the only provider to record growth, up 20%.
    Kenya’s pay-TV market shrank sharply between 2024 and 2025, with DStv losing 84% of its subscribers and GOtv 89%. StarTimes dropped 71%, while Zuku was the only provider to record growth, up 20%.
  • KRA Makes Certificate of Origin Mandatory for All Kenya Imports from October 1 and What This Means

    KRA Makes Certificate of Origin Mandatory for All Kenya Imports from October 1 and What This Means

    The Kenya Revenue Authority has issued a final reminder to importers that all goods entering the country must be accompanied by a Certificate of Origin effective October 1, marking the end of a three-month transition period that began in July.

    The requirement, outlined under Section 44A of the Tax Procedures Act, CAP. 469B, will apply to all consignments imported into Kenya with only a few exceptional cases receiving provisional measures for compliance ease.

    The KRA confirmed this directive in a statement released on September 23, giving importers just seven days to ensure full compliance.

    What Changes for Importers

    The new regulation fundamentally alters Kenya’s import landscape by requiring documentary proof of goods’ country of origin before customs clearance.

    KRA said this new requirement is set to change how businesses import goods, aiming to boost transparency and tighten compliance with trade laws.

    For shipments lacking a Certificate of Origin, customs authorities will accept alternative documentation including Origin Declarations confirming goods’ source, Export Permits or Licenses from relevant authorities in exporting countries, Customs Export Declarations, or Pre-Export Verification of Conformity certificates issued by Kenya Bureau of Standards-authorized agents.

    Exemptions Provide Limited Relief

    Several categories of imports remain exempt from the Certificate of Origin requirement. Privileged persons and institutions listed in the Fifth Schedule of the East African Community Customs Management Act 2004 are excluded, as are used goods under the same schedule, including second-hand vehicles.

    Personal items such as baggage, personal effects, mailbags, postal parcels, and human remains being repatriated do not require certificates.

    Temporary imports under Section 117 of EACCMA and small medical packages with doctor’s prescriptions are also exempt.

    Individual parcels meeting weight and value limits under Regulation 119(3) of EACCMA shipped via registered couriers similarly avoid the requirement.

    Business Impact and Concerns

    From October 1, 2025, all non-compliant goods will be treated as illegal under the new law.

    This move will have widespread implications for businesses, especially small-scale importers, clearing agents, logistics firms, and international suppliers dealing with Kenyan clients.

    Failure to comply could lead to seizure or forfeiture of the goods, as spelt out in the amended Tax Procedures Act under the Finance Act, 2025.

    This enforcement mechanism represents a significant escalation in trade compliance requirements, potentially disrupting supply chains for businesses unprepared for the documentation demands.

    The timing presents particular challenges for small and medium enterprises that may lack the resources to navigate complex documentation requirements or may depend on suppliers unfamiliar with Kenya’s specific regulatory demands.

    Import-dependent sectors including retail, manufacturing, and construction face potential operational disruptions if their suppliers fail to provide proper documentation.

    Revenue Authority’s Assurance

    Despite the stringent requirements, KRA has committed to addressing implementation challenges on a case-by-case basis.

    The Authority assured importers that any difficulties encountered in meeting the Certificate of Origin requirement would be handled individually while maintaining adherence to existing legal provisions.

    This approach suggests recognition of the practical challenges businesses face in obtaining proper documentation, particularly from suppliers in countries with different trade documentation systems or less developed administrative structures.

    The Certificate of Origin mandate represents Kenya’s broader strategy to enhance trade transparency and combat illicit trade flows. By requiring verifiable proof of goods’ origin, authorities aim to close loopholes that have historically enabled trade malpractices including undervaluation, misdeclaration, and smuggling.

    The policy aligns with regional and international efforts to strengthen customs controls and ensure accurate trade statistics.

    However, its success will largely depend on the business community’s ability to adapt to the new requirements and the Authority’s capacity to implement the policy without unduly disrupting legitimate trade.

    For businesses, the October 1 deadline marks a critical compliance milestone that could determine their continued access to the Kenyan market.

    Those failing to secure proper documentation risk significant financial losses through goods seizure, while compliant importers may benefit from reduced unfair competition from non-compliant traders.

    The policy’s ultimate impact on Kenya’s trade flows, business costs, and economic competitiveness will become clearer in the months following implementation, as markets adjust to the new regulatory reality.

  • Kenya Turns To IMF For New Funding As Staff Jets To Nairobi

    Kenya Turns To IMF For New Funding As Staff Jets To Nairobi

    Kenyan authorities have approached the International Monetary Fund for fresh financial assistance, with a high-level mission team arriving in Nairobi this week to begin talks on a potential new programme.

    The IMF confirmed that a staff team, led by Haimanot Teferra, mission chief for Kenya, will visit Nairobi from September 25 to October 9 to initiate discussions with Kenyan authorities on a possible IMF-supported program.

    The mission comes six months after Kenya’s previous arrangement with the Washington-based lender collapsed amid political turmoil and failed conditionalities.

    The discussions mark a critical attempt by President William Ruto’s administration to restore relations with international creditors following the termination of the country’s Extended Credit Facility and Extended Fund Facility programmes in March.

    The Kenyan authorities and IMF staff reached an understanding that the ninth review under the current programmes would not proceed, with the IMF receiving a formal request for a new program from the Kenyan authorities.

    Treasury Cabinet Secretary John Mbadi and Central Bank Governor Kamau Thugge are expected to lead negotiations during the two-week mission.

    The talks will coincide with the fund’s annual Article IV consultations, which review member countries’ economic and financial policies.

    The collapse of Kenya’s previous IMF arrangement followed deadly anti-government protests last year triggered by controversial tax increases proposed in the Finance Bill 2024.

    The Finance Bill had proposed some of the most aggressive tax increments the country had ever seen, sparking protests that rocked Nairobi and several other counties, resulting in the deaths of at least 16 people and injuries of hundreds of others.

    The government was forced to abandon the unpopular legislation after protesters stormed parliament in June 2024, though some tax measures were later implemented through parliamentary amendments in December.

    Kenya’s exit from the IMF programme cost the country Sh110 billion in financing from the final tranche of the three-year arrangement.

    The previous deal, worth approximately $3.9 billion, was designed to provide medium-term financial assistance as Kenya grappled with balance of payments problems and structural economic weaknesses.

    However, the prospects for securing new IMF funding face significant constraints.

    Treasury Cabinet Secretary John Mbadi
    Treasury Cabinet Secretary John Mbadi

    Kenya has already accessed nearly all of its quota or share of IMF resources, with a maximum of Sh64.8 billion available based on cumulative access limits through March 2025.

    Treasury data reveals that Kenya has not projected any new IMF funding in its financial planning up to at least June 2030, reflecting official caution about the programme’s feasibility.

    Mbadi has previously emphasised that the IMF should not be viewed as a primary source of external financing, noting that the fund’s main role is balance of payments support rather than budget financing.

    “I want Kenyans to understand that the IMF’s primary responsibility is not to fund the budget of member countries and is instead for balance of payments support,” Mbadi said in an earlier interview.

    “Going forward, we are trying to minimise our focus on the IMF, but it doesn’t mean that we are stopping our engagements.”

    The mission to Nairobi underscores Kenya’s continued struggles with fiscal pressures and debt sustainability concerns. The East African nation faces mounting external debt obligations and revenue collection challenges that have strained government finances since the COVID-19 pandemic.

    Ms Teferra, the IMF mission chief, said: “The IMF remains committed to supporting Kenya in its efforts to maintain macroeconomic stability, safeguard debt sustainability, strengthen governance, and promote inclusive and sustainable growth for the benefit of the Kenyan people.”

    The talks represent a delicate balancing act for the Ruto administration, which must demonstrate fiscal discipline to international creditors while managing domestic political pressures from citizens already burdened by high living costs and unemployment.

    Kenya’s return to IMF negotiations signals the government’s recognition that international support remains crucial for economic stability, despite the political costs associated with fund-sponsored reforms.

    The outcome of the discussions will likely influence Kenya’s broader relationship with multilateral lenders and its ability to access external financing in the coming years.

  • PayPal Targets Kenyan Startups With $100 Million Digital Growth Fund for Africa and Middle East

    PayPal Targets Kenyan Startups With $100 Million Digital Growth Fund for Africa and Middle East

    Nairobi, Sept 24 – Global payments firm PayPal has announced a $100 million investment to accelerate digital commerce across the Middle East and Africa, a move expected to open up fresh opportunities for Kenyan fintechs and startups eyeing regional and global markets.

    The funds, to be deployed through PayPal Ventures, acquisitions, and technology rollouts, will support entrepreneurs and businesses seeking to scale, expand their reach, and tap into the growing digital economy.

    “The Middle East and Africa are home to some of the most dynamic and rapidly evolving businesses in the world,” said Alex Chriss, PayPal’s President and CEO. “By dedicating a $100 million investment to this region, we’re backing the technologies and partnerships that will help entrepreneurs expand beyond borders and unlock new growth opportunities.”

    Kenya is seen as a strategic market in PayPal’s Africa play, given its reputation as the cradle of mobile money through M-Pesa, and the country’s thriving startup scene that has attracted record venture capital inflows in recent years. PayPal already partners with Safaricom, allowing Kenyans to transfer funds between M-Pesa and PayPal accounts, a service widely used by freelancers, SMEs, and exporters.

    Otto Williams, PayPal’s Senior Vice President and Regional Head for the Middle East and Africa, said the investment would strengthen connections between local businesses and the global marketplace. “We’re focused on expanding our footprint in the region and ensuring millions of consumers and businesses can access more of the digital services they need to thrive,” he said.

    Industry watchers believe Kenyan startups in e-commerce, logistics, and fintech could benefit the most from PayPal’s funding push, especially as competition heats up with rival global players and deep-pocketed Gulf investors betting big on the continent’s digital future.

    The announcement builds on PayPal’s existing regional investments, including in Paymob (Egypt), Tabby (UAE), and Stitch (South Africa). With the new commitment, Kenyan innovators may soon find themselves in line for PayPal-backed growth capital and global expansion opportunities.

  • Money and Modern Investments in Kenya

    Money and Modern Investments in Kenya

    Walk through a Nairobi café or sit in traffic on a matatu and the conversations are often the same — school fees, rent, side hustles.

    These days, though, another topic sneaks in: online accounts with brokers. Young people especially talk about testing them out with small savings.

    For anyone curious to try in practice, it usually starts right here, where setting up an account is straightforward and doesn’t take much time.

    Blending Tradition and Change

    Kenya’s financial culture is built on strong roots. Land and livestock remain symbols of security for many families. A plot upcountry still carries weight as the ultimate investment. At the same time, smartphones and mobile money have reshaped daily habits. People use M-Pesa to pay bills, send remittances, and cover shopping in supermarkets. With that digital comfort, it feels natural for some to explore online brokers alongside chama contributions and small businesses.

    Everyday Choices With Real Impact

    Money decisions in Kenya often look small but build up over time. A boda rider sets aside a portion of daily earnings, a parent decides whether to pay fees early or delay, a student debates joining a chama versus saving alone. Even those tiny moves affect stability down the line.

    Common situations people juggle:

    • Leaving funds in mobile wallets or pulling them out in cash.
    • Using loan apps for emergencies or sticking to SACCOs.
    • Choosing between farming inputs and school payments.
    • Saving with friends in a chama or going solo.

    Each choice carries trade-offs, and the balance is rarely simple.

    The Question of Leverage

    One topic that sparks heated debate is leverage. It looks attractive on paper — small deposits controlling big trades. Phrases like 1:1000 leverage broker capture attention, but the risk is real. Gains can come fast, yet losses move even quicker. In WhatsApp groups and casual chats, people swap stories: a friend who doubled savings in a week, another who saw an account vanish in one bad evening. The lesson most repeat is simple: don’t stake money you can’t replace.

    Technology at the Center

    Kenya’s reputation as a mobile money hub makes adoption of new tools faster than in many countries. Paying rent by phone is second nature. Ordering goods through apps is routine. This comfort spills over into financial experiments. Even in rural towns, young people gather at cyber cafés to log in, check balances, or compare platforms. Connection might cut mid-transaction, but resourcefulness usually wins.

    Learning in Groups

    Formal training is limited, so information spreads informally. Friends swap notes in campus hostels, colleagues share advice during lunch breaks, and churches host sessions about responsible borrowing. The style is casual, sometimes messy, but it creates a shared space to learn.

    Not all the information is correct, of course. Success stories get exaggerated, losses quietly hidden. Still, group learning makes stepping into something new less intimidating.

    Balancing Hope and Reality

    The dream of turning small capital into meaningful profit keeps people interested. But Kenyans are also practical. Many keep day jobs and test digital platforms with modest amounts. That approach lowers stress when losses happen, while still leaving space to explore. It’s less about striking gold overnight and more about gradually understanding how tools work.

    Coping With Economic Shifts

    Inflation, politics, weather — each plays its role in household budgets. Families adapt in different ways. Farmers try new crops, city workers build side hustles, parents juggle savings to keep children in school. Some experiment with digital brokers as just another tool in the mix. The creativity lies in blending old methods with new opportunities.

    What Comes Next

    Kenya’s financial landscape will likely remain a blend. Chamas and SACCOs won’t disappear; they’re too deeply woven into community life. At the same time, digital services keep gaining ground, driven by younger generations who see phones as natural gateways to everything.

    The future isn’t about choosing one path over the other. It’s about balance — keeping the security of tradition while making space for new experiments. For now, the conversations in matatus, cafés, and family gatherings reflect that balance: a mix of ambition, caution, and resilience in the face of constant change.

  • Kenyan Fintech Bonto Shuts Down As Remittance Market Consolidation Claims Another Casualty

    Kenyan Fintech Bonto Shuts Down As Remittance Market Consolidation Claims Another Casualty

    Kenya’s Central Bank has revoked the licence of Bonto Kenya Money Transfer Limited, formalising the shutdown of the remittance fintech less than eight months after it began operations.

    The Nairobi-based startup, which specialised in foreign exchange and remittance services, ceased processing transactions on August 15 before requesting licence revocation from the Central Bank of Kenya (CBK).

    Governor Kamau Thugge confirmed the revocation took effect September 11, under money remittance regulations.

    Bonto’s collapse highlights the mounting pressures facing smaller players in Kenya’s increasingly competitive remittance market, where established banks, mobile money services and global fintech companies are squeezing out newer entrants through lower fees and broader service networks.

    Yoann Copreaux, Bonto’s founder and chief executive, attributed the shutdown to collapsing foreign exchange margins, minimal remittance fees, and escalating compliance costs that made profitable scaling “unrealistic.”

    “FX margins collapsed, breakeven scale became unrealistic,” Copreaux said in a LinkedIn post announcing the closure. “Existing [money remittance providers] can survive on legacy clients. We were trying to build in the desert.”

    The startup explored selling its licence to more than 50 fintech companies and received five offers, but none proved viable once regulatory approval timelines and mounting monthly losses were considered.

    Bonto’s demise reflects broader consolidation pressures in Kenya’s $5.77bn remittance market. While inflows hit record levels in 2024, the sector has become increasingly dominated by global players including Western Union, MoneyGram and WorldRemit, which leverage partnerships with local banks and mobile operators to offer faster, cheaper services.

    The regulatory framework governing money remittance providers requires a minimum core capital of $50,000 and strict compliance standards, creating high barriers for newer entrants.

    As of May 2025, only 29 licensed providers operated in the market, down from previous years.

    Kenya’s diaspora remittances remain crucial to the economy, reaching Ksh54bn in June 2025.

    However, the combination of narrowing profit margins, intensified competition from mobile money platforms like M-Pesa, and rising operational costs has created a challenging environment for smaller operators.

    The Central Bank’s decision to revoke Bonto’s licence underscores regulators’ focus on maintaining market stability while protecting consumers in an increasingly consolidated sector.

    Industry observers expect further consolidation as smaller players struggle to compete against better-capitalised incumbents.

    For Copreaux and his team, the closure marks the end of a two-year venture that struggled to gain traction in a market where timing and scale have proven decisive factors for survival.​​​​​​​​​​​​​​​​

  • KRA Seizes 21,600 Smuggled Phones Worth Sh16 Million Tax at Eldoret Airport in Major Crackdown

    KRA Seizes 21,600 Smuggled Phones Worth Sh16 Million Tax at Eldoret Airport in Major Crackdown

    The Kenya Revenue Authority has intercepted 21,600 undeclared high-end smartphones valued at Sh16.1 million in unpaid taxes at Eldoret International Airport, dealing a significant blow to a sophisticated smuggling operation that has been bleeding the exchequer of millions in revenue.

    The seizure, announced on Saturday, was part of a larger consignment that included 5,000 declared smartphones worth Sh6.4 million, alongside shoes, clothes, auto spare parts, household items and electronic accessories.

    The cargo arrived aboard a plane that touched down on September 18, following what KRA described as an intelligence-led operation.

    According to the tax authority, investigations revealed that the smuggled phones had been deliberately misdeclared or concealed under false categories in a bid to evade customs duties.

    The consignment was destined for Pemba Cargo Limited but had been declared by Portyard Limited through consolidated cargo arrangements.

    “The declarations of the goods were done either expressly or under consolidated cargo under each category,” KRA stated in its press release, indicating the sophisticated nature of the evasion scheme.

    The operation represents a violation of Section 203 of the East Africa Community Customs Management Act (EACCMA) 2004, which criminalizes false customs declarations and fraudulent tax evasion.

    Offenders face imprisonment for up to three years or fines not exceeding ten thousand dollars upon conviction.

    The interception highlights the growing challenge of smartphone smuggling at Kenya’s airports, where high-value electronics are increasingly being trafficked through elaborate schemes designed to circumvent tax obligations.

    The undeclared phones represent a significant loss to the government’s revenue collection efforts, particularly as smartphone imports continue to surge with growing digital adoption.

    KRA’s Commissioner for Investigations and Enforcement emphasized the authority’s commitment to combating tax evasion, stating that such operations are crucial for boosting compliance and ensuring fair trade practices within the market.

    The seizure comes amid heightened efforts by KRA to plug revenue leakages through enhanced surveillance and intelligence gathering.

    The authority has been working to strengthen its enforcement capabilities at key entry points, with Eldoret International Airport being a critical focus area given its strategic location and growing cargo volumes.

    Industry sources indicate that smartphone smuggling has become increasingly sophisticated, with criminals exploiting loopholes in consolidated cargo arrangements to disguise high-value electronics as lower-taxed household goods or clothing items.

    The successful operation demonstrates KRA’s enhanced capacity to detect and intercept such schemes, potentially deterring similar attempts by other smuggling networks.

    However, it also underscores the persistent challenges facing Kenya’s customs enforcement, where criminal networks continue to devise new methods to evade taxes on high-value imports.

    The authority has indicated that investigations into the matter are ongoing, with officials working to identify all parties involved in the smuggling scheme.

    This includes examining the role of clearing agents, cargo handlers and any other facilitators who may have enabled the operation.

    The case is expected to serve as a warning to other potential tax evaders, particularly in the rapidly growing electronics import sector where profit margins can make the risks of smuggling appear attractive to criminal networks.

    As Kenya continues to digitize its economy and smartphone penetration increases, authorities face the challenge of balancing legitimate trade facilitation with robust enforcement against smuggling and tax evasion in this lucrative sector.​​​​​​​​​​​​​​​​

  • Authorities Launch Investigation Into Massive Smartphone Smuggling Ring at Eldoret Airport

    Authorities Launch Investigation Into Massive Smartphone Smuggling Ring at Eldoret Airport

    Kenya Revenue Authority probes alleged conspiracy to conceal 33,000 high-end phones worth Sh50m in unpaid taxes

    Kenyan authorities are investigating an alleged conspiracy to smuggle 33,000 high-end smartphones through Eldoret International Airport, potentially costing the government Sh50 million in unpaid taxes in what investigators describe as one of the most sophisticated customs evasion schemes uncovered at the facility.

    The investigation, launched following a whistleblower complaint, centers on a consignment that arrived aboard a cargo aircraft from one of Africa’s leading airlines on September 18, 2025.

    Sources familiar with the matter told this publication that the mobile phones were deliberately misdeclared as clothing and household items to evade import duties and value-added tax.

    Kenya Revenue Authority officials, speaking on condition of anonymity due to the ongoing investigation, said the scheme involved “individuals with connections to powerful government figures” and represented a systematic attempt to defraud the state of significant tax revenue.

    “We want all concerned parties to pay attention to this issue now. It’s a serious matter as it is denying the government of much needed money,” said one official aware of the investigation.

    The case has sent ripples through KRA’s enforcement division, with executives reportedly demanding accountability from airport-based customs officials who may have been complicit in facilitating the alleged fraud.

    Investigators have been dispatched to Eldoret to gather evidence and interview relevant personnel.

    This latest incident adds to mounting concerns about tax compliance at Eldoret International Airport, which has emerged as a significant entry point for both legitimate trade and illicit goods.

    The facility has previously featured in customs enforcement actions, with authorities regularly conducting auctions of seized items including smartphones, laptops, and electronic cigarettes whose importers failed to pay applicable duties.

    The timing of the investigation is particularly significant given Health Cabinet Secretary Aden Duale’s recent crackdown on illicit products entering Kenya through various ports of entry.

    In June 2025, Duale presided over the destruction of more than 5.5 tonnes of illegal tobacco products seized at Eldoret Airport, describing such smuggling operations as “instruments of harm” that target young people.

    “Kenya is a signatory to the WHO protocols to eliminate illicit tobacco products. Our enforcement to eliminate illicit tobacco products is a legal and moral duty that must be undertaken,” Duale said during the destruction ceremony at Moi Teaching and Referral Hospital.

    The Health CS subsequently suspended all existing licenses related to nicotine products and warned that the government would not tolerate Kenya becoming “a dumping ground for toxic substances.”

    However, the smartphone smuggling case represents a different category of customs evasion, focused primarily on avoiding tax obligations rather than importing prohibited goods.

    Industry analysts suggest the scale of the alleged operation – involving 33,000 units – indicates a well-organized network with intimate knowledge of customs procedures and potential insider assistance.

    KRA has historically struggled with customs evasion at major ports of entry, with previous cases involving everything from construction materials to consumer electronics.

    The authority’s enforcement efforts have intensified in recent years as the government seeks to boost revenue collection amid growing fiscal pressures.

    The Eldoret investigation comes as Kenya faces mounting scrutiny over tax compliance, with several high-profile cases currently before the courts.

    In April 2025, two contractors were charged with evading Sh290 million in taxes, while other recent cases have involved individuals and companies accused of systematic under-declaration of income and imports.

    Officials at KRA declined to provide official comment on the smartphone case, citing the ongoing investigation. However, sources indicate that the authority is treating the matter as a priority given both the scale of the alleged fraud and concerns about potential corruption within its own ranks.

    The investigation is expected to determine whether customs officials at Eldoret Airport actively facilitated the scheme or were negligent in their duties.

    Early findings could lead to criminal charges against importers, customs brokers, and potentially government officials.

    For Kenya’s tax collection efforts, the case highlights ongoing challenges in monitoring and controlling imports at secondary airports, which may lack the sophisticated scanning equipment and oversight mechanisms deployed at major facilities like Jomo Kenyatta International Airport in Nairobi.

    The outcome of this investigation is likely to influence KRA’s approach to customs enforcement at regional airports and could result in enhanced screening procedures for high-value consumer electronics, which have become increasingly popular targets for customs fraud due to their compact size and high duty rates.

    As the probe continues, it serves as a reminder of the complex challenges facing tax authorities in emerging markets, where sophisticated smuggling operations often exploit gaps in enforcement capacity and, in some cases, benefit from official corruption.

  • Co-op Bank Launches Promotional Reduced FX Rates for Overseas MoneyGram Transfers to Key Destinations

    Co-op Bank Launches Promotional Reduced FX Rates for Overseas MoneyGram Transfers to Key Destinations

    In a move aimed at easing the financial burden on Kenyans with international ties, Co-operative Bank of Kenya has unveiled a limited-time promotion offering reduced foreign exchange (FX) rates for outbound remittances via MoneyGram.

    The initiative, effective immediately, targets transfers to six high-demand destinations: the United States, Canada, Australia, South Africa, India, Pakistan, and Nepal.

    The special offer, valid through October 31, 2025, allows customers to benefit from preferential FX rates when sending funds overseas through the bank’s extensive branch network.

    This partnership with global remittance giant MoneyGram underscores Co-op Bank’s commitment to competitive treasury services, building on its existing framework of negotiated, real-time rates for transactions exceeding USD 1,000 or equivalent.

    “Remittances play a vital role in supporting families and businesses across borders, especially in these volatile economic times,” said a Co-op Bank spokesperson in a statement.

    “By slashing FX margins on these routes, we’re empowering our customers to stretch their hard-earned shillings further, whether for education fees in the US, family support in India, or investments in Australia.”

    The promotion is accessible at all Co-op Bank branches nationwide, where customers can process transfers in cash or via account, with no additional conversion fees applied.

    This aligns with the bank’s broader foreign exchange offerings, which include competitive buying and selling of major world currencies without hidden charges for larger volumes.

    Industry observers note that such promotions come at an opportune moment, as Kenya’s remittance inflows—estimated at over KSh 600 billion annually—continue to fuel household consumption and small business growth amid lingering inflationary pressures. MoneyGram, a key player in the sector, facilitates quick cash pickups and bank deposits in recipient countries, often within minutes.

    For context, standard FX rates at Kenyan banks like Co-op typically include modest markups, but this deal eliminates or significantly reduces them for qualifying transfers, potentially saving senders 1-2% on the exchange alone.

    Customers are advised to visit a branch with recipient details for seamless processing.

    As the October deadline approaches, financial experts recommend acting swiftly to capitalize on the rates, especially for peak seasonal transfers like back-to-school or holiday support.

    Co-op Bank, with its vast network and customer-centric treasury desk, positions itself as a go-to for affordable global connectivity in East Africa’s remittance hub.

  • Britam Sued For Refusing to Pay Sh10 Million Insurance Claim

    Britam Sued For Refusing to Pay Sh10 Million Insurance Claim

    A Nairobi-based law firm has moved to court seeking damages after Britam General Insurance (K) Limited allegedly reneged on its commitment to honor a Sh10 million professional indemnity insurance policy, leaving the lawyer to personally settle a Sh1.3 million claim.

    Musyoki Benson & Associates Advocates, through its managing partner Benson Musyoki Nzakyo, has filed a lawsuit at the High Court accusing the insurance giant of breach of contract and acting in bad faith when it declined to indemnify him against a third-party claim that arose from his legal practice.

    The dispute centers around a professional indemnity policy numbered 580/053/1/001/905/2021/07 that Britam issued to Mr. Nzakyo after he completed a proposal form and paid the required premium.

    According to court documents, Britam confirmed on July 20, 2022, that it had insured the lawyer and issued him with a certificate of cover for the year commencing 2021.

    The legal battle stems from a property transaction that went awry.

    Mr. Nzakyo had represented John Matiti Kithendu in the purchase of a 0.040-hectare property in Diani, Kwale County, from Stephen Chebor Kipkemei Kipkebut, who trades as Baimet Contractors.

    As part of his professional duties, the lawyer issued an undertaking to pay the balance of the purchase price of Sh1.3 million within 14 days.

    However, complications arose when Mr. Nzakyo assisted his client in transferring the property title before the full payment was made.

    When he subsequently delayed in completing the purchase price payment, John K. Kibet of Oruenjo Kibet & Khalid Advocates sued him at the Milimani Law Courts, seeking to enforce the professional undertaking dated January 28, 2022.

    Upon being served with the lawsuit, Mr. Nzakyo immediately notified Britam and requested indemnification in accordance with the terms of his insurance policy.

    Initially, the insurer appeared cooperative, accepting the claim and demanding the policy excess of Sh50,000, which the lawyer paid in full.

    Acting under the doctrine of subrogation, Britam accepted the claim and appointed Messrs Ako & Co. Advocates to represent Mr. Nzakyo in the matter.

    However, the arrangement was short-lived. According to the court papers, the appointed law firm later declined to continue with the case and allegedly instructed them to cease acting in the matter.

    Mr. Nzakyo argues that Britam failed to identify or cite any clause in the policy document or proposal form that excluded conveyancing practice or professional undertakings, which he maintains are routine activities within the legal profession.

    Left without legal representation and facing potential professional consequences, he was compelled to personally settle the third-party claim.

    The lawyer paid a total of Sh1.3 million as the outstanding purchase price and an additional Sh100,000 in legal costs.

    The matter was subsequently marked as settled through a consent agreement dated March 1, 2024, but Mr. Nzakyo was left significantly out of pocket.

    In his court filing, Mr. Nzakyo describes Britam’s actions as “unmerited, unreasonable, and constitutes a fundamental breach of the contract.”

    He further alleges that the insurer’s conduct violates Section 80 of the Insurance Act, which prohibits misleading or ambiguous policy documents.

    The lawyer accuses Britam of acting in bad faith and engaging in corporate impunity while making an unjustifiable attempt to avoid its lawful obligations under the insurance contract.

    He maintains that the refusal to honor the policy terms has caused him significant financial loss and damage to his professional reputation.

    As a result of Britam’s alleged breach, Mr. Nzakyo seeks several remedies from the court.

    He wants the court to declare the insurer’s repudiation of his claim as unlawful, unreasonable, and constituting a breach of contract.

    He is also seeking compensation totaling Sh1.45 million, which includes the Sh1.4 million he paid to settle the third-party claim and the Sh50,000 policy excess that Britam has allegedly withheld despite repudiating liability.

    Additionally, the lawyer is requesting that the court order Britam to pay interest on the sum of Sh1.45 million with effect from April 17, 2024, until full payment is made.

    Professional indemnity insurance is designed to protect lawyers, doctors, and other professionals against claims arising from their professional services, but disputes over coverage exclusions and claim validity continue to generate litigation.

    The case is scheduled for hearing on September 24, 2025, and will likely set an important precedent for how professional indemnity claims are handled in Kenya’s insurance sector.

    For Mr. Nzakyo, the outcome will determine whether he recovers the substantial personal funds he expended to fulfill his professional obligations while his insurer allegedly abandoned its contractual commitments.

    The dispute also raises broader questions about transparency in insurance policy terms and the obligations of insurers to clearly communicate coverage limitations to their clients, particularly in specialized professional contexts where the consequences of coverage gaps can be severe.​​​​​​​​​​​​​​​​

  • Court Okays Auctioning of Ecobank Properties to Recover Sh254 Million Debt

    Court Okays Auctioning of Ecobank Properties to Recover Sh254 Million Debt

    The High Court has ordered the auction of movable assets belonging to Ecobank Kenya Limited in a bid to recover Sh284 million owed to the estate of former Cabinet minister Mbiyu Koinange.

    In directions issued on September 19, 2025, the court registrar instructed Moran Auctioneers to proceed with the attachment and sale of the bank’s property after issuing a 15-day notice and conducting a public proclamation.

    The auction seeks to enforce a decree granted in Succession Cause No. 527 of 1981, following a long-running dispute between the late minister’s estate and the lender.

    The directive stems from a ruling delivered on June 26, 2025, by Justice Eric Kennedy Ogolla, who found Ecobank liable for irregularly permitting the withdrawal of funds from an account belonging to the estate.

    The account, domiciled at Ecobank Towers in Nairobi, had been operated under the number 001005011762001.

    Justice Ogolla ruled that the bank acted unlawfully and ordered it to reimburse Sh284 million, together with interest accruing from the date the deposit was made.

    The estate had sued the lender in March 2024, demanding a full account of the missing money and the identities of those who benefited from the withdrawals.

    The court’s latest directive now paves the way for the auction of the bank’s property if the debt remains unsettled.

  • More Trouble For StanChart As 325 Former Employees File Fresh Claims After Losing Sh7 Billion To 629 Pensioners

    More Trouble For StanChart As 325 Former Employees File Fresh Claims After Losing Sh7 Billion To 629 Pensioners

    Standard Chartered Bank Kenya finds itself embroiled in yet another pension dispute as 325 former employees have emerged from the shadows to demand compensation similar to that awarded to their 629 colleagues who successfully sued the lender in a case that dragged through the courts for 16 years.

    The fresh claims come just weeks after the Supreme Court affirmed earlier judgments awarding the original group of 629 former workers approximately Sh7 billion in compensation for undervalued pension benefits.

    The ruling, which Standard Chartered has accepted and begun processing payments for on September 22, was expected to finally close a contentious chapter in the bank’s history.

    However, the emergence of the 325 additional claimants, who refer to themselves as the “Non 629 Former Employees,” threatens to reopen wounds and potentially expose the bank to billions more in liabilities.

    These former workers argue they were similarly affected when Standard Chartered changed its pension scheme from a defined benefit to a defined contributory structure in 1999, the same transition that sparked the original lawsuit.

    In a letter dated June 5 and addressed to both the bank and its pension scheme administrators, the group presented what they believe is a compelling case for inclusion in the compensation process.

    They argued that despite not being part of the original tribunal proceedings, they were “similarly situated as employees of the bank and members of the same schemes during the period in question.”

    The crux of their argument centers on fairness and equity.

    “The utilisation of pension funds affected all members of the schemes in equal measures,” the group stated, requesting to be included “in the compensation process under the same terms as those granted to the 629 claimants by the Tribunal.”

    Standard Chartered’s response, delivered in an August 19 letter, was swift and unambiguous.

    The bank rejected the claims outright, stating they “lack any merit in law or fact.”

    The lender’s legal team emphasized that the Supreme Court judgment was specific to the parties involved in the original proceedings and could not be extended to cover additional claimants who chose not to participate in the initial case.

    The bank’s response carried a stern warning, telling the 325 claimants that “any action brought against the bank or the scheme shall be strenuously defended at your peril in respect to resultant costs.”

    This aggressive stance suggests Standard Chartered is determined to prevent what could become an avalanche of similar claims from other former employees.

    The timing of these fresh claims is particularly challenging for Standard Chartered, which had just begun to quantify the financial impact of the original judgment.

    The bank issued a profit warning on Monday, projecting that its net earnings for 2025 would fall by at least 25 percent due to the pension payouts.

    With 2024 net profits standing at Sh20.06 billion, the warning effectively caps 2025 profits at approximately Sh15.05 billion.

    Despite the financial hit, Standard Chartered appears well-positioned to handle the original settlement.

    By June 2025, the bank’s retained earnings stood at Sh48.4 billion, up from Sh43.7 billion in December 2024, while its liquidity ratio of 64.47 percent remains comfortably above the statutory minimum of 20 percent.

    However, if the 325 additional claimants were to succeed in their pursuit, the financial implications could be substantial.

    While the exact value of their claims remains unclear, a proportional calculation based on the original settlement could potentially add several billion more to Standard Chartered’s liabilities.

    The case highlights the complex legacy issues that can haunt financial institutions decades after corporate restructuring.

    The 1999 pension scheme change, initially viewed as a standard corporate reorganization, has now resulted in one of Kenya’s most expensive employment-related legal settlements.

    For the 325 former employees, the battle represents more than just financial compensation.

    Many of these workers likely believed they had missed their opportunity when they failed to join the original lawsuit, only to watch their former colleagues receive substantial settlements while they were left empty-handed.

    The legal landscape surrounding their claims remains uncertain.

    While Standard Chartered’s position appears strong given that the Supreme Court judgment was specific to the original parties, employment law experts suggest the claimants might explore alternative legal avenues, potentially arguing that they were denied due process or that the original proceedings should have included all affected parties.

    As Standard Chartered prepares to defend against these fresh claims, the case serves as a cautionary tale for other financial institutions about the long-term consequences of pension scheme changes and the importance of ensuring all affected parties are properly consulted and compensated during such transitions.

    The outcome of this latest dispute will likely influence how similar cases are handled across Kenya’s banking sector and could set important precedents for corporate pension scheme reforms.

    For now, Standard Chartered faces the prospect of another protracted legal battle, even as it works to put the original 16-year saga behind it.​​​​​​​​​​​​​​​​

  • M-Pesa Services To Be Unavailable During Safaricom’s Scheduled System Upgrade

    M-Pesa Services To Be Unavailable During Safaricom’s Scheduled System Upgrade

    Safaricom PLC has announced that its flagship mobile money platform, M-Pesa, will undergo a scheduled system upgrade on Monday, September 22, 2025, between 12:30 am and 3:30 am.

    In a notice to customers, the telco said the three-hour maintenance window is part of ongoing efforts to improve the reliability, security, and performance of M-Pesa services.

    “For 18 years, M-Pesa has continued to transform lives across Kenya, connecting you, our customers, to opportunities every day. To support this and meet our promise to offer always-on, safe, secure, and worry-free financial products and services, we will be conducting a scheduled system upgrade,” Safaricom said in a statement.

    During the upgrade period, all M-Pesa services, including airtime purchase, will be temporarily unavailable.

    The company emphasised that the timing has been carefully chosen to minimise inconvenience and urged customers to plan transactions in advance.

    Safaricom also apologised for the disruption and expressed gratitude to customers for their continued trust, noting that such upgrades are necessary to sustain M-Pesa’s role as a backbone of Kenya’s digital economy.

    Launched in 2007, M-Pesa now serves over 32.1 million customers in Kenya alone and has been a key driver of financial inclusion, raising access to formal financial services from 26.7% in 2006 to 83.7% in 2021.

    The platform generated Sh139.9 billion in revenue in 2024 and continues to expand globally, with a footprint in more than 170 countries and over 70 million active users.

    The mobile money service also supports over one million businesses and agents across markets including Kenya, Ethiopia, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana, and Egypt.

  • Government Allocates Sh41 Billion for Major Mombasa Port Expansion to Meet Growing Demand

    Government Allocates Sh41 Billion for Major Mombasa Port Expansion to Meet Growing Demand

    Kenya’s government has committed Sh41 billion toward a comprehensive expansion of the Port of Mombasa as cargo volumes surge beyond current infrastructure capacity, positioning the facility to handle projected growth that could see throughput reach 2.4 million Twenty-foot Equivalent Units this year.

    President William Ruto announced the substantial investment during the launch of a commuter rail service in Mombasa, emphasizing the critical need to align port infrastructure with rapidly expanding cargo demands.

    The expansion comes as the port is projected to handle over 2.4 million Twenty-foot Equivalent Units (TEUs) this year, up from two million TEUs at the end of 2024.

    The ambitious project will involve constructing a new cargo yard at the Mombasa port beginning at year’s end, designed to accommodate the increasing volume of goods flowing through East Africa’s premier maritime gateway.

    This development represents a significant scaling up from the total container capacity for both container terminals one and two at the port of Mombasa stands at 2.1 million TEUs currently.

    “We need to match cargo capacity and the infrastructure; that is why we shall be investing more in different port projects in the coming years,” President Ruto stated during the announcement, underscoring the government’s recognition that port limitations could constrain regional trade growth.

    The expansion initiative has already begun with China Communications Construction Company (CCCC) mobilizing to the site to demolish the decommissioned Kipevu Oil Terminal.

    This demolition work paves the way for a major infrastructure upgrade, as the old terminal was retired following the completion of Kipevu Oil Terminal 2 approximately two years ago.

    The newer facility boasts enhanced capacity to simultaneously handle four vessels, demonstrating the scale of modernization taking place.

    Kenya Ports Authority Managing Director William Ruto outlined plans to expand Terminal 19, which will add more than 450 million TEUs of capacity through sea reclamation once the demolition phase concludes.

    This expansion represents one of the most significant infrastructure developments at the port in recent years.

    Beyond physical expansion, the port authority is collaborating with Container Freight Station owners to modernize their facilities, addressing a capacity bottleneck that has remained static for two decades despite consistent increases in cargo flow.

    “Apart from port expansion, we are working with other stakeholders, including CFSs, to expand their facilities to accommodate increasing cargo throughput in the country,” the KPA Managing Director explained.

    The port’s performance metrics illustrate the urgency behind these investments.

    Last year, Mombasa handled approximately 2.1 million TEUs, with in-transshipment traffic recording 491,666 TEUs—reflecting a remarkable 132.9 percent increase equivalent to 280,593 additional TEUs compared to 2023 figures.

    The expansion strategy extends beyond immediate port infrastructure to encompass broader economic development initiatives.

    President Ruto revealed that the government has partnered with the African Export-Import Bank (Afreximbank) to finance various projects surrounding the port, including the strategically important Dongo Kundu Special Economic Zone.

    This collaboration aims to support trade facilitation and attract trade-related investments to Kenya.

    Afreximbank has ratified multiple initiatives designed to advance Kenya’s industrialization and export-led development agenda by funding the Dongo Kundu, Naivasha, and Vipingo Special Economic Zones.

    Under these arrangements, Afreximbank will finance the development and execution of industrial parks and special economic zones through its affiliate company, Arise Integrated Industrial Platforms.

    These proposed industrial parks are designed to create sustainable environments where export-oriented industries can flourish by leveraging economies of scale, shared infrastructure, and enhanced access to global markets.

    The three Special Economic Zones form part of Kenya’s fourth medium-term plan spanning 2023-2027 within the broader Vision 2030 framework, intended to accelerate Kenya’s capacity to export value-added goods both within Africa and globally.

    The Sh41 billion allocation comes as part of Kenya Ports Authority’s broader Sh310 billion ports investment program, demonstrating the government’s commitment to maintaining Mombasa’s position as East Africa’s primary trade gateway.

    Recent infrastructure investments have already included new gantry cranes worth $31.5 million (Sh4.1 billion) as part of its efforts to strengthen its operations, acquired in 2024.

    The expansion project positions Kenya to capitalize on growing regional trade volumes while addressing capacity constraints that could otherwise limit economic growth.

    With construction of the new yard scheduled to begin before year-end, the project represents a critical investment in Kenya’s trade infrastructure that will serve the broader East African region’s commercial needs for decades to come.

    The timing of this investment aligns with Kenya’s broader infrastructure development initiatives and reflects the government’s strategy to position the country as a regional hub for trade and manufacturing.

    As cargo volumes continue their upward trajectory, the Mombasa port expansion will be essential for maintaining Kenya’s competitive advantage in regional maritime trade.

  • American Tobacco Firm Ordered To Pay KRA Sh23.7 Billion For Tax Evasion

    American Tobacco Firm Ordered To Pay KRA Sh23.7 Billion For Tax Evasion

    The High Court has delivered a major victory to the Kenya Revenue Authority, ordering Alliance One Tobacco Kenya Limited to pay Sh23.746 billion in unpaid taxes after dismissing the company’s appeal against excise duty assessments.

    Justice Francis Rayola Olel ruled that the American-owned tobacco processor’s operations constitute manufacturing and therefore attract excise duty, contrary to the company’s claims that its products should be classified as unmanufactured tobacco exempt from such taxes.

    Alliance One Tobacco Kenya Limited, a local subsidiary of the US-based Alliance One International, had argued that its tobacco processing activities were merely preparatory steps that did not amount to manufacturing.

    The company purchases raw tobacco from farmers in Kenya and Uganda, then performs stemming, threshing, and re-drying operations before supplying the processed tobacco to cigarette manufacturers including BAT Kenya, Mastermind Tobacco, and Estobac Kenya.

    However, the court adopted the Tax Appeals Tribunal’s findings that these operations constitute “intermediate manufacturing” under Section 2 of the Excise Duty Act 2015.

    The judge noted that the company’s processes involve removing thick stalks, grading to eliminate undesirable leaves, trimming ends, mechanical stripping, re-drying to customer-specified moisture levels of about 13 percent, and final packaging.

    “Without doubt, this comprises an intermediate manufacturing process,” Justice Olel stated in his September 10 judgment.

    “The tribunal did not err in finding that the appellant was liable to pay excise duty on its products based on the definition of manufacturing under the Excise Duty Act.”

    The tax dispute originated when KRA investigations revealed that Alliance One processed tobacco through leased machinery at BAT facilities.

    The revenue authority argued that transforming green leaf tobacco into graded, blended, and packed products tailored to customer specifications constitutes manufacturing under the law, which covers both production of excisable goods and “any intermediate or incomplete process” in their production.

    KRA had initially demanded Sh25.802 billion in unpaid corporation income tax, value added tax, and withholding tax.

    After additional documentation was provided through Ernst & Young, the Commissioner issued a fresh assessment for Sh39.804 billion including penalties and interest.

    Following objections and alternative dispute resolution proceedings, the final assessment was reduced to Sh23.746 billion.

    The tobacco company had protested what it termed excessive taxation, pointing out that while it sold its most expensive processed tobacco at approximately Sh600 per kilogram, the tax assessment sought to levy excise duty at Sh7,000 to Sh8,837 per kilogram—more than ten times the selling price.

    However, the court noted that this complaint was not properly pleaded in the case.

    The ruling reinforces KRA’s position that intermediate tobacco processing constitutes manufacturing for tax purposes.

    In 2020, the authority had already issued a private ruling stating categorically that Alliance One’s processes involved manufacture and that taxes were payable.

    This judgment follows similar precedents where KRA has successfully argued that intermediate processing constitutes manufacturing.

    In 2020, the Tax Appeals Tribunal ordered Keroche Breweries to pay Sh9.1 billion after ruling that diluting vodka to produce ready-to-drink beverages constituted manufacturing a new product subject to excise duty.

    The Sh23.746 billion tax liability is nearly equivalent to the total annual revenue of BAT Kenya, which earned Sh25.716 billion in 2024, highlighting the significant financial impact of the court’s decision on Alliance One Tobacco Kenya Limited.​​​​​​​​​​​​​​​​

  • Red Flags Over Secret Deal With Purchase of Portland Cement Shares By Tanzanian Tycoon

    Red Flags Over Secret Deal With Purchase of Portland Cement Shares By Tanzanian Tycoon

    A controversial deal that could see Tanzanian billionaire Edhah Abdallah Munif acquire a controlling stake in Kenya’s East African Portland Cement Company (EAPC) has exposed serious concerns about asset stripping, market manipulation, and the erosion of Kenya’s industrial base.

    Parliament has now intervened, directing EAPC to pursue a share buyback instead of allowing the deeply discounted sale to proceed, as lawmakers raise alarm over what appears to be one of the most questionable corporate transactions in recent memory.

    The deal centers around Munif’s acquisition of 26.32 million EAPC shares from Swiss multinational Holcim using an investment firm known as Kalahari Cement at Sh27.30 each, valuing the deal at Sh718.7 million.

    However, Portland Cement shares closed trading at Sh56 a piece yesterday, placing the market value of the firm at Sh5 billion, revealing the staggering discount being offered to the Tanzanian investor.

    The mathematics are stark and troubling. At current market prices, the 29.2 percent stake being acquired would be worth Sh1.4 billion at the current share price, yet Munif is paying less than half that amount.

    This represents a discount so severe that it has prompted accusations of preferential treatment and potential insider dealing.

    More concerning is the true value of what Munif is acquiring. EAPC’s net asset or book value stands at Sh20.4 billion, as per the company’s latest audited financial results dated June 2024, with total assets of Sh35.19 billion against total liabilities of Sh14.79 billion.

    The bulk of this wealth lies in investment properties worth Sh21.23 billion, largely freehold land comprising 4,626 acres held under long-term lease arrangements.

    This land portfolio has become the elephant in the room.

    Members of the parliamentary committee on trade, industry and cooperatives reckon that the firm acquiring the stake is eyeing EAPC assets, notably land that is valued in excess of Sh20 billion.

    The company has already indicated plans to monetize this asset base, having won a court battle in 2023 against squatters who had occupied the land for about 10 years, with plans to sell off part of its expansive land holdings to raise Sh10 billion towards working capital.

    The timing and structure of the deal raise additional red flags.

    Munif’s Amsons Group completed the full acquisition of Bamburi Cement in December for Sh23.6 billion, cementing its hold on Kenya’s cement market.

    With Bamburi Cement already owning 12.5 percent of EAPC, he will emerge as the single-largest shareholder of the Athi River-based company with a 41.75 percent stake if the current deal proceeds.

    This consolidation is occurring as the East Africa cement market reached $2.66 billion in 2024 and is projected to climb to $2.98 billion by 2033, making control of major producers increasingly valuable.

    The strategic importance of EAPC, one of Kenya’s oldest cement manufacturers that operates as far as Uganda, cannot be understated in this context.

    Public interest concerns have intensified given the ownership structure of EAPC.

    The State and the National Social Security Fund (NSSF) have a combined stake of 52 percent in EAPC, with pensioners, through the NSSF, owning a 27 percent stake while the government, through the Treasury, owns a 25 percent stake.

    This means that millions of Kenyan workers and retirees stand to lose from any undervaluation of their pension fund investments.

    Activist lawyer Okiya Omtatah has sought to block the sale, arguing that should the deal go through, there will be massive losses for Kenyan pensioners.

    The concerns extend beyond immediate financial losses to questions about foreign control of strategic national assets.

    Parliament’s intervention reflects growing unease about the deal’s transparency and fairness.

    Members of the National Assembly Committee on Trade, Industry and Cooperatives want EAPC to buy back the shares at market value and sell for a profit later, with Kajiado South MP Samuel Parashina pointedly asking management, “Why are you waiting for the shares to be sold? Why not buy it back now?”

    EAPC Managing Director Mohammed Osman has acknowledged the feasibility of this alternative, telling the parliamentary committee that the firm will pursue the share buyback option if directed by Parliament, noting “We have the capacity to buy back the shares… We have the cash flow to settle the amount because we have turned around the company”.

    The dramatic recovery in EAPC’s share price supports this confidence.

    In the past year, the EAPC share price has gone up by 359 percent from Sh7.2 a unit, making it one of the top performers at the bourse in the period. This performance trajectory makes the discounted sale even more questionable.

    Regulatory authorities find themselves in an uncomfortable position.

    CMA chief executive Wyckliffe Shamiah said the regulator was powerless in dictating the offer price, arguing it reflects an agreement between buyer and seller.

    However, the Capital Markets Authority approved the controversial sale at a price it acknowledged was a steep discount, raising questions about regulatory oversight.

    The broader implications extend to Kenya’s industrial sovereignty and economic security. The cement industry represents critical infrastructure for national development, and the concentration of market power in foreign hands through questionably priced transactions sets a troubling precedent.

    As Parliament pushes for a share buyback solution, the EAPC case has become a test of Kenya’s ability to protect strategic national assets from predatory acquisition.

    The outcome will likely influence how similar deals are structured and scrutinized in the future, making it a watershed moment for corporate governance and public interest protection in Kenya’s capital markets.

    The red flags are clear and numerous: massive discounts to market value, even steeper discounts to book value, timing that benefits from market manipulation, consolidation of market power, and potential asset stripping of valuable land holdings.

    Whether Parliament’s intervention can prevent what many view as a fire sale of national assets remains to be seen, but the controversy has already exposed significant weaknesses in Kenya’s framework for protecting strategic investments from questionable foreign acquisition.

  • Trump Says US Has A Buyer For TikTok

    Trump Says US Has A Buyer For TikTok

    President Donald Trump on Tuesday announced an agreement between the U.S. and China to keep TikTok operating in the United States, with three sources familiar with the matter saying the deal was similar to one discussed earlier this year.

    The agreement requires TikTok’s American assets to be transferred to U.S. owners from China’s ByteDance, potentially resolving a saga that has lingered for nearly a year.

    A deal for the popular social media app, which counts 170 million U.S. users, would represent a breakthrough in months-long talks between the two biggest economies as they seek to defuse a wide-ranging trade war that has unnerved global markets.

    “We have a deal on TikTok … We have a group of very big companies that want to buy it,” Trump said at a White House briefing, without providing further details. The announcement comes a day before a September 17 deadline to sell or shut down the short video app.

    The basics of the new deal, also similar to April, include that ByteDance will keep the single largest ownership stake at 19.9%, just under the law’s 20% threshold, two of the sources said.

    While the broad terms are expected to remain the same, the sources did say they do not know what the final deal would exactly look like, given the potential for last-minute changes.

    U.S. Treasury Secretary Scott Bessent told CNBC on Tuesday the commercial terms of the deal had, in essence, been done since around March with just a few details left to be ironed out.

    “This deal wouldn’t be done without proper safeguards for U.S. national security,” Bessent said. “It seems as though we were also able to meet the Chinese interest.”

    CNBC reported Tuesday that the deal is expected to be closed within the next 30 to 45 days, and that the agreement will include existing investors in TikTok’s China-based parent, ByteDance, and new investors.

    The details are in line with Reuters’ reporting in April that the deal would spin off TikTok’s U.S. operations into a new company based in the U.S. and majority-owned and operated by U.S. investors.
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    Any agreement may require approval by the Republican-controlled Congress, which passed a law in 2024 during the Biden Administration that required TikTok’s divestiture due to fears that its U.S. user data could be accessed by the Chinese government, allowing Beijing to spy on Americans or conduct influence operations through the app.

    The Trump administration has declined to enforce the law due to worries it would anger TikTok’s huge user base and disrupt political communications, instead extending the divestiture deadline on three separate occasions.

    Trump, who has credited TikTok with helping him win re-election last year and has 15 million followers on his personal account, was expected to extend the deadline for the fourth time. The White House also launched an official TikTok account last month.

    TARIFFS AND TIKTOK

    A deal for TikTok, which had been in the works in the spring, was put on hold after China indicated it would not approve it following Trump’s announcements of tariffs on Chinese goods.

    Washington has said that TikTok’s ownership by ByteDance makes it beholden to the Chinese government.

    But the company has said U.S. officials have misstated its ties to China, arguing its content recommendation engine and user data are stored in the U.S. on cloud servers operated by Oracle, while content moderation decisions that affect American users are also made in the U.S.

    CNBC reported on Tuesday that Oracle will keep its cloud deal with TikTok. Reuters reported earlier this year that the White House was working on a plan to tap Oracle, along with a group of outside investors, to control the app’s operations.

    As part of the plan, Oracle would have been responsible for addressing national security issues, Reuters had reported.

    Oracle shares pared some gains on Tuesday following the news and were last up 1%.

    A framework agreement was reached by officials from both countries on Monday. A final confirmation on the deal is expected on Friday in a call between Trump and Chinese President Xi Jinping.
    Trump said in March that his administration was in touch with four different groups on TikTok’s sale. Microsoft, Amazon, billionaire Frank McCourt and a consortium led by OnlyFans founder have been among the bidders, according to reports.
    (BBC)
  • Oki General Trading Faces Sh356 Million Tax Evasion Charges as Star Witness Falters in Court

    Oki General Trading Faces Sh356 Million Tax Evasion Charges as Star Witness Falters in Court

    Nairobi — Questions are mounting over the strength of the prosecution’s case against Oki General Trading (Kenya) after its star witness, Deepak Rajoriya, struggled under cross-examination in a Sh356 million tax evasion trial.

    What had been framed as a straightforward case of corporate misappropriation took a dramatic turn when Rajoriya once touted as the whistleblower, failed to provide clear answers on the origins of his allegations.

    His testimony, built on a contested audit he commissioned, has now raised more doubts than it has resolved.

    Court records revealed that Rajoriya, an accountant with ties to the company’s parent firm abroad, entered Kenya on December 25, 2024, using a tourist visa.

    Barely two weeks later, on January 16, 2025, he was appointed a director of Oki General Trading.

    Within days of taking up the role, he ordered a forensic audit that later formed the backbone of the prosecution’s claims of a Sh356 million misappropriation.

    The defense team pounced on this timeline, arguing that the speed of Rajoriya’s elevation from tourist to company director to whistleblower was both suspicious and unprecedented.

    They also highlighted that Oki General Trading has consistently filed annual independent audit reports, none of which had flagged the discrepancies now being alleged.

    Under pressure in court, Rajoriya admitted that he had not conducted any internal investigation nor accessed original company records.

    His accusations rested solely on the audit he personally commissioned, raising questions about its independence.

    When asked how such a massive financial hole could have gone unnoticed in previous audits used for tax filings, he was unable to provide a coherent response.

    The case took another twist when it emerged that the Kenya Revenue Authority (KRA) has already levied a Sh356 million penalty against Oki General Trading—the exact same figure Rajoriya claims was misappropriated. The coincidence has fueled speculation that the company might be attempting to reframe a tax liability as corporate theft, shifting the burden from unpaid taxes to alleged internal fraud.

    “The numbers match too neatly,” one lawyer observing the proceedings told reporters outside the Milimani Law Courts. “It raises the question of whether this case is really about theft—or about avoiding a tax bill.”

    The courtroom drama has cast a shadow over the prosecution’s credibility, with Rajoriya’s shaky testimony weakening the narrative of a clean-cut financial scandal. Instead, the trial has exposed deep contradictions, leaving the public to wonder whether the Sh356 million at the center of the dispute is missing money or simply unpaid tax.

    The case continues, with the defense pressing for the audit’s credibility to be struck out as evidence.

  • Co-op Bank Celebrated at Global SME Finance Forum 2025 for Pioneering Innovations in SME Banking

    Co-op Bank Celebrated at Global SME Finance Forum 2025 for Pioneering Innovations in SME Banking

    In a spotlight on Africa’s burgeoning financial ecosystem, The Co-operative Bank of Kenya (Co-op Bank) was honored at the prestigious Global SME Finance Forum 2025 here for its unwavering commitment to innovation in business banking.

    The recognition, presented during the forum’s awards ceremony on September 15, underscores the Kenyan lender’s role in delivering cutting-edge financial solutions tailored to small and medium-sized enterprises (SMEs), which form the backbone of economic growth across the continent.

    The three-day event, hosted at The Galleria and Convention Centre from September 15 to 17, drew policymakers, fintech pioneers, development finance institutions, and over 1,000 delegates from emerging markets worldwide.

    Organized by the SME Finance Forum under the auspices of the World Bank Group and the International Finance Corporation (IFC), the gathering focused on unlocking capital for SMEs through themes like improving market access, fostering entrepreneurial skills, and pioneering new financial instruments.

    Amid plenary sessions, roundtables, and innovation hubs, the awards ceremony highlighted institutions driving scalable impact in SME financing.

    Representing Co-op Bank at the gala were Benjamin Metho, Head of SME Banking, and Elizabeth Makokha, Head of Retail Trade Finance.

    They received the accolade alongside forum leaders, including Qamar Saleem, Global SME Finance Forum Manager, and Vittorio Di Bello, FIG Industry Director. In a post-event statement shared on social media, Co-op Bank celebrated the honor as validation of its strategic push toward digital and customized tools that empower SMEs to thrive amid economic headwinds.

    “This award reaffirms our dedication to transforming business banking through innovative products that address the unique needs of African entrepreneurs,” the bank noted in its announcement. The recognition aligns with Co-op Bank’s broader portfolio, which includes tailored credit lines, advisory services, and capacity-building programs designed to boost SME resilience.

    With a growing loan book exceeding KSh 100 billion ($770 million) dedicated to SMEs, the Nairobi Securities Exchange-listed institution has positioned itself as a key player in Kenya’s financial inclusion drive, serving over 200,000 business clients regionally.

    The Global SME Finance Awards, now in their seventh year and endorsed by the G20’s Global Partnership for Financial Inclusion, evaluated entrants on criteria such as reach, uniqueness, effectiveness, and scalability.

    Co-op Bank was among the finalists announced in April, competing against global heavyweights like Access Bank PLC and BRAC Bank in categories including Product Innovation of the Year— a nod to its history of accolades in this space, having clinched the same title in 2019 and an honorary mention in 2021.

    Industry observers hailed the win as a boon for Kenya’s reputation as an African fintech hub. “Co-op Bank’s focus on innovation isn’t just about products; it’s about ecosystem-building that creates jobs and sustainable growth,” said a forum attendee, echoing sentiments from deep-dive workshops on digital lending platforms.

    As SMEs grapple with inflation and supply chain disruptions, such recognitions signal investor confidence in African banks’ ability to bridge the continent’s $331 billion SME financing gap, per IFC estimates.

    For Co-op Bank, the Johannesburg triumph adds to a trophy cabinet brimming with regional honors, including EMEA Finance’s Best Bank in Kenya.

    Looking ahead, the lender plans to expand its Michu digital wallet and trade finance offerings, aiming to onboard 50,000 more SMEs by year-end. As Gideon Muriuki, Co-op Bank Group Managing Director, reflected in past award remarks, “Empowering SMEs is investing in Africa’s future—we’re just getting started.”

    The forum wrapped with calls for public-private partnerships to scale green financing and women-led ventures, setting the stage for next year’s event in a yet-to-be-announced location.

    For Co-op Bank, the golden moment in Johannesburg serves as both milestone and mandate: innovate boldly, finance inclusively, and lead Africa’s SME revolution.

  • Former Ugandan Attorney-General Buys Sh1.03 Billion Stakes in Sidian Bank

    Former Ugandan Attorney-General Buys Sh1.03 Billion Stakes in Sidian Bank

    William Byaruhanga, Uganda’s former attorney-general, has made a significant move into Kenya’s financial sector by acquiring a substantial 14.63 percent stake in Sidian Bank worth Sh1.03 billion, positioning himself as the fourth-largest shareholder in one of Kenya’s fastest-growing banks.

    The transaction, completed through his investment firm Kenbe Investments, involved purchasing half of Bakki Holdings Company from Centum Investments.

    This strategic acquisition gives Byaruhanga direct control over a significant portion of Sidian Bank, which has emerged as a standout performer in Kenya’s competitive banking landscape.

    Byaruhanga, who served as Uganda’s attorney-general from 2016 to 2021, brings considerable business acumen to his new role.

    The wealthy lawyer has built an extensive business empire spanning real estate, hospitality, and manufacturing sectors.

    His portfolio includes prime properties across Kampala, a hotel business, a sugar company, and interests in the prominent Kampala law firm Kasirye, Byaruhanga and Company Advocates.

    The timing of Byaruhanga’s investment reflects Sidian Bank’s remarkable financial trajectory.

    The bank reported exceptional growth in its half-year results, with net profit surging 4.5 times to Sh1 billion for the six months ended June 2025, compared to Sh221 million in the same period the previous year.

    This performance made Sidian the fastest-growing bank among Kenya’s 38 licensed financial institutions.

    The bank’s growth strategy has been particularly focused on government securities, with deposits increasing by 70.8 percent to Sh59.8 billion while lending rose 4.8 percent to Sh26.9 billion.

    Sidian’s portfolio of Treasury bills and bonds tripled to Sh39.3 billion, generating earnings of Sh1.8 billion from government securities, up from Sh875 million previously.

    Byaruhanga’s entry into Sidian comes amid significant ownership restructuring at the bank. Centum Investments has been gradually reducing its stake through staggered sales after abandoning a 2023 deal that would have seen Nigeria’s Access Bank acquire an 83.4 percent shareholding for Sh4.3 billion.

    Instead, Centum has been divesting portions of its holdings to various investment vehicles, bringing in new strategic investors.

    The current ownership structure shows Bakki Holdings Company, now jointly controlled by Centum and Byaruhanga, holding 27.27 percent of Sidian Bank. Other major shareholders include Wizpro Enterprises with 24.95 percent, Afram Limited with 24.36 percent, and Pioneer General Insurance with 16.89 percent.

    However, Sidian faces regulatory challenges that may require additional capital injection.

    The Central Bank of Kenya has flagged the bank for having inadequate core capital adequacy ratios, with stress tests revealing potential vulnerability to loan defaults.

    This regulatory pressure suggests that Byaruhanga and other shareholders may need to provide additional funding to strengthen the bank’s capital base.

    The acquisition also highlights the growing cross-border investment trends in East Africa’s financial sector.

    Byaruhanga’s investment represents a significant vote of confidence in Kenya’s banking sector from a prominent Ugandan businessman with close ties to President Yoweri Museveni’s administration.

    For Sidian Bank, Byaruhanga’s entry brings not only substantial capital but also potential access to Ugandan markets and networks.

    His extensive business connections and regulatory experience could prove valuable as the bank continues its expansion strategy and works to address regulatory requirements.

    As Sidian Bank navigates its growth trajectory and regulatory challenges, Byaruhanga’s involvement as a major shareholder will likely influence the bank’s strategic direction and regional expansion plans.​​​​​​​​​​​​​​​​