Category: Economy

State House expenditure for the 2025/26 financial year reached KSh 10.4 billion by the end of January 2026, surpassing its full-year recurrent allocation of KSh 7.7 billion.

This overshoot occurred within the first seven months of the fiscal cycle, meaning the President’s official residence has already exceeded its approved ceiling by 35% (KSh 2.7 billion) with five months remaining.

According to recent National Treasury disclosures, the overspending is primarily driven by recurrent expenditures, which cover the daily functioning of state institutions.Domestic and foreign travel, hospitality, fuel, maintenance, staff allowances, and administrative support.

Reports indicate the administration spends approximately KSh 200 million daily on hosting delegations at State House.

The Controller of Budget has previously flagged high spending on hospitality and travel, noting a 125% overshoot of the first-quarter budget target.

State House has already requested and received approval for an additional KSh 4 billion in emergency financing for the current fiscal year.

Experts and the Controller of Budget warn that such runaway expenditure by top executive offices weakens fiscal discipline and may force increased government borrowing, further impacting Kenya’s public debt.

For context, the 2025/26 total national budget is KSh 4.239 trillion, with the education sector receiving the largest share at KSh 702.7 billion.

NAIROBI, Kenya – Nairobi has been ranked the third most attractive city in Africa in the newly released Jeune Afrique 2025 African Cities Attractiveness Index, marking the capital’s strongest showing yet as it cements its position as a regional tech and investment hub.

The rise comes despite recent socio-political tensions, with the report highlighting Nairobi’s expanding digital ecosystem, major infrastructure upgrades, and sustained investor interest as key drivers of its improved standing.

“Nairobi records the most notable rise on the podium,reaching third place, supported by its ambition to position itself as a continental tech hub, as well as its major infrastructure and mobility projects and its attractiveness to investors.”

“This ranking comes at a time when Africa is experiencing unprecedented urbanization African metropolises must invent new financing models, strengthen governance capacities, and adapt to a constantly evolving climatic, social, and economic context.”

The second edition of the index evaluates 30 African cities using a mix of resident perceptions and objective economic indicators, including foreign direct investment flows between 2020 and 2023.

More than 7,800 urban residents were surveyed across quality of life, infrastructure, economic dynamism, and access to essential services.

Cairo topped the 2025 ranking, dislodging Cape Town, buoyed by strong FDI inflows from the Gulf and China and massive urban development projects such as the New Administrative Capital.

Kigali retained second place, praised for its clean urban environment, safety, and strong municipal governance.

The report also highlights widening contrasts between francophone and anglophone cities, with the latter showing greater resilience in attracting investment, while new entrants such as Dar es Salaam, Tangier, and Mombasa shift the competitive urban landscape.

Other cities also in the list include Cape Town, Johannesburg, Casablanca, Rabat, Dakar, Abidjan, Marrakech, Alexandria, and Mombasa, reflecting the increasingly diverse and competitive nature of urban growth across the continent.

Kenya’s inequality crisis has reached its most alarming level yet. According to a new report by Oxfam Kenya, only 125 individuals now own more wealth than 42.6 million Kenyans combined, a staggering reflection of the country’s widening economic divide.

The report titled Kenya’s Inequality Crisis: The Great Economic Divide shows that nearly half of Kenyans survive on less than Sh130 a day. Since 2015, an additional seven million people have fallen into extreme poverty, despite years of economic growth and government promises to expand opportunity.

Oxfam links the deepening crisis to rising living costs, a regressive tax system and chronic underfunding of essential public services.

Food prices are currently 50 percent higher than they were in 2020.

The average Kenyan worker is earning less in real terms, with wages shrinking by 11 percent as inflation continues to erode purchasing power.

The report highlights a stark pay gap within Kenya’s labour market. A chief executive officer in one of the country’s top ten companies earns 214 times more than a public school teacher. This imbalance, Oxfam says, has allowed wealth to accumulate at the top while ordinary households struggle to afford basic needs.

Debt servicing remains one of the biggest drains on Kenya’s finances. In 2024, the government spent Sh68 out of every Sh100 collected in taxes on repaying debt. This amount was twice the education budget and almost fifteen times what was allocated to healthcare. As a result, investment in public services has sharply declined. Primary school spending per pupil is now only 18 percent of what it was in 2003. Children from the poorest families receive nearly five fewer years of schooling than those from wealthier backgrounds.

Healthcare access is equally strained. Only four million Kenyans actively contribute to the Social Health Insurance Fund, and just 20 percent of the money collected reaches public health facilities. Most funds flow to private providers even though the majority of Kenyans depend on public hospitals.

The report also exposes deep gender inequality. Kenyan women earn about 65 percent of what men earn and are significantly disadvantaged in property ownership. They perform most unpaid care work, including childcare and home responsibilities, which limits their ability to participate in the workforce. According to Oxfam, this gender gap intensifies poverty and reduces economic mobility for millions of women and girls.

Oxfam traces much of today’s inequality to Kenya’s historical and structural foundations. Colonial-era land allocation, elite capture of political systems and persistent exclusion of rural and low-income communities have created long-standing barriers that continue to shape economic outcomes.

Oxfam Kenya Executive Director Mwongera Mutiga described the situation as a crisis created by choices rather than circumstance. He said inequality has grown because of unfair policies and consistent political inaction. Mutiga called on leaders to embrace bold reforms, including progressive taxation, increased funding for public education and healthcare, job creation initiatives and stronger land justice measures.

The report also shows that food insecurity has worsened dramatically. Between 2014 and 2024, at least 17 million Kenyans experienced moderate to severe food shortages. Inflation has hit low-income households hardest. In Nairobi, the impact on poor households was 27 percent higher than on wealthier families between 2020 and 2024.

Social protection remains weak. Only nine percent of Kenyans are covered by government support programmes. The Inua Jamii cash transfer reaches 1.9 million beneficiaries, yet the monthly Sh2,000 payment has not increased to match rising living costs.

Oxfam warns that unless urgent action is taken, Kenya will face rising levels of poverty, exclusion and instability. The report argues that reducing inequality by two percent every year, combined with sustained economic growth, could triple the rate of poverty reduction.

The organisation says a fairer and more equal Kenya is possible if the government prioritises equity, strengthens public services and ensures wealth is shared more broadly rather than concentrated among a small elite. According to Oxfam, achieving this will require political will, courageous leadership and a commitment to policies that put people before profit.

Kenya’s economic recovery may be gaining pace, but its fiscal foundations are becoming increasingly fragile, the World Bank has warned in its latest assessment, signalling heightened concerns about the country’s ability to manage its growing debt burden.

In a statement released on Tuesday, November 25, 2025, the World Bank said Kenya’s economy is projected to grow at an average of 4.9 per cent between 2025 and 2027, reflecting stronger private sector credit, easing monetary conditions, and renewed activity in sectors such as construction.

The Bank cited stable inflation, a firm shilling, and foreign exchange reserves at historic highs as evidence of improving macroeconomic stability.

Private sector credit grew five per cent year-on-year by September 2025, buoyed by lower lending rates and friendlier financing conditions.

However, the upbeat outlook is overshadowed by deepening fiscal risks.

The Bank warned that Kenya’s fiscal deficit for the FY2024/25 period widened to 5.9 per cent of GDP, significantly above the initial 4.3 per cent target.

This slippage was attributed to persistent revenue shortfalls and rigid expenditure patterns that continue to strain public finances.

Public debt rose to 68.8 per cent of GDP during the same period, pushing Kenya further into the high-risk category of debt distress.

Qimiao Fan, the World Bank’s Director for Kenya, Rwanda, Somalia, and Uganda, said the country’s growth potential remains strong but could be unlocked further by dismantling long-standing barriers to competition.

He argued that reforms aimed at opening markets, lowering consumer prices, and stimulating job creation would enable Kenya to tap into more inclusive and sustainable growth.

His sentiments were echoed by Jorge Tudela Pye, the World Bank Country Economist for Kenya, who noted that while the country’s headline economic indicators appear robust, the underlying fiscal position poses significant challenges.

“Many key macroeconomic indicators continue to show strength; however, the fiscal outlook remains subject to downside risks that could threaten sustained and inclusive economic growth,” he said.

The report also exposed ongoing weaknesses in Kenya’s labour market.

Formal employment remains stuck at around 15 per cent, and real wages continue to decline, reflecting structural constraints that have long limited productivity and job creation.

The Bank’s analysis, titled From Barriers to Bridges: Procompetitive Reforms for Productivity and Jobs in Kenya, highlights the urgent need for reforms aimed at boosting competition and accelerating private sector-led growth.

Kenya’s Product Market Regulation score of 2.92, higher than that of peer economies, illustrates the heavy restrictions that continue to choke business activity.

To level the playing field, the World Bank recommends cutting exchequer transfers to commercial state-owned enterprises and shifting to performance-based systems for public service obligations.

The Bank also calls for opening up electricity transmission and distribution to private capital, strengthening competition regulation in the telecommunications sector, and ensuring a fairer and more transparent allocation of fertiliser subsidies.

According to the World Bank, implementing these reforms could raise Kenya’s GDP growth by up to 1.35 percentage points and increase labour compensation growth by two percentage points.

This would create the equivalent of 400,000 jobs annually, offering a pathway out of the persistent employment and wage stagnation that has defined Kenya’s labour landscape.

The institution’s message is clear: Kenya is making strides in stabilising its economy and boosting investor confidence, but without bold fiscal consolidation and deep structural reforms, the momentum could falter.

The risk of debt distress is rising, and the cost of inaction could undermine the country’s long-term development ambitions.

In what amounts to economic apartheid in Kenya’s tea sector, the Kenya Tea Development Agency (KTDA) has orchestrated a scandalous payment system that sees farmers in western Kenya receive as little as Sh10 per kilogram in bonuses while their counterparts in the Mount Kenya region pocket up to Sh57 for the same product—all while hiding behind flimsy currency fluctuation excuses.

The shocking disparity has exposed KTDA as an institution that perpetuates regional inequality, with 680,000 small-scale farmers now questioning whether the agency serves all Kenyans equally or operates as a cartel designed to enrich certain regions at the expense of others.

Documents obtained by this writer reveal a systematic pattern of discrimination that has persisted for years, with western Kenya farmers—predominantly from Nyamira, Kisii, Kericho, Bomet, Nandi, and Vihiga counties—consistently receiving pittances compared to their East of Rift counterparts in Nyeri, Murang’a, Meru, Kirinyaga, Embu, and Kiambu.

The Numbers Don’t Lie

This year’s bonus payments lay bare the extent of KTDA’s duplicity.

While Embu’s Rukuriri Tea Factory will pay farmers Sh57.50 per kilogram, and Mununga Factory offers Sh57, farmers supplying Kiamokama/Rianyamwamu in western Kenya will receive a insulting Sh10 per kilogram—a staggering 475 percent difference for what is essentially the same crop sold at the same auction.

Nyamache/Itumbe farmers will get Sh11, while multiple western factories including Ogembo/Eberege, Sanganyi, Nyansiongo, Mogogosiek, Kobel, and Boito will each pay a measly Sh12 per kilogram.

Even the highest-paying western factory, Momul, offers only Sh32—still Sh25.50 less than Rukuriri’s payout.

The cruelty is compounded by the fact that western farmers have seen their already meager earnings slashed further.

Kiru Tea Factory, for instance, dropped payments from Sh51.10 to Sh32—a brutal Sh19.10 cut that has left farmers wondering how they will survive.

Currency Lies and Hollow Excuses

Faced with mounting anger, KTDA resorted to what can only be described as insulting propaganda.

In a statement released Tuesday morning, the agency blamed the strengthening Kenyan shilling, claiming the currency moved from an average of Sh144 to Sh129 against the US dollar, thereby reducing earnings when converted back to local currency.

But here’s the problem with KTDA’s currency excuse: if the shilling’s strength affected all farmers equally, why are East of Rift farmers still earning five times more than their western counterparts? The currency traded at the same rate across Kenya last time anyone checked.

KTDA Holdings national chairman Chege Kirundi had the audacity to tell farmers this is “a very bad year” while simultaneously explaining that “increased volumes were sold.”

How does an agency sell more tea, maintain stable international prices, yet claim farmers must suffer? The mathematics of exploitation rarely add up.

The agency’s attempt to justify the regional gap by claiming that “tea from high-altitude zones naturally fetches better prices due to higher quality” is not just misleading—it’s an outright fabrication designed to mask systemic corruption.

The Quality Lie Debunked

Philip Ng’eno, a large-scale tea grower in Bomet East and university lecturer, demolished KTDA’s quality argument with surgical precision.

“The issue of poor quality does not arise, because farmers adhere to the ‘two leaves and a bud’ standard set by the Tea Board of Kenya,” he stated, exposing the agency’s claims as hollow propaganda.

The truth that KTDA refuses to acknowledge is simple: all Kenyan tea, regardless of origin, is sold at the same Mombasa Tea Auction under the same conditions.

The notion that western tea is inherently inferior is a convenient lie that allows the agency to perpetuate a system that enriches some regions while impoverishing others.

Borabu MP Patrick Osero, who sits on the National Assembly Agriculture Committee, didn’t mince words.

“The difference in earnings cannot be justified as Kenyan tea is sold in the same auction,” he declared, calling for a separate auction in Kericho to break KTDA’s stranglehold on western farmers.

A Pattern of Regional Discrimination

This isn’t a one-year aberration.

The evidence shows KTDA has maintained this discriminatory payment structure for years, consistently favoring Mount Kenya region farmers while treating western farmers as second-class suppliers. The question that demands answering is: why?

Cheruiyot Baliach, a KTDA zonal director representing Kaptebenget zone in Bomet County, voiced what many farmers believe.

“The huge differences in payments between factories in the West and East of Rift, which have persisted over the years, must be addressed to end longstanding claims and suspicions of manipulation at the Mombasa Tea Auction.”

Manipulation. That’s the word KTDA fears most, but it’s the one that best describes what appears to be happening.

How else does one explain a system where identical products from different regions receive wildly different payments after passing through the same auction?

Kericho Governor Dr. Erick Mutai cut through the pretense with devastating clarity. “Globally, tea from the West of Rift is known for its quality and popularity, but this is not reflected in prices and farmer earnings. That farmers here are the least paid is unacceptable.”

Government Complicity Through Inaction

Perhaps more disturbing than KTDA’s actions is the government’s apparent complicity through inaction. Despite President William Ruto meeting with KTDA directors and lauding the sector’s growth from Sh138 billion in 2022 to Sh215 billion last year, nothing has been done to address the systemic inequality that sees western farmers subsidize their eastern counterparts.

Baliach noted bitterly that neither the government’s tax waiver on packaging materials nor the Sh2.6 billion fertilizer subsidy has been felt in the industry.

The interventions appear designed for headlines rather than actual farmer relief.

While Ruto boasts about pushing sector earnings to Sh280 billion by 2027, western farmers are asking a more fundamental question: whose earnings are being pushed?

If current trends continue, that Sh280 billion will simply mean more money for Mount Kenya farmers while western growers remain trapped in poverty.

The Reckoning

West of Rift farmer Maxwel Mokama’s plea for “urgent government intervention” shouldn’t be necessary in a country that claims to treat all citizens equally.

The fact that farmers must beg for fair treatment exposes both KTDA and the government as willing participants in regional economic marginalization.

KTDA’s promise to expand orthodox tea production, invest in factory modernization, and open new markets rings hollow when the fundamental issue—fair payment distribution—remains unaddressed. You cannot build trust by offering future promises while maintaining present injustices.

The agency’s statement that “the challenges we face are global and systemic” is corporate speak for “we have no intention of changing the status quo.” If the challenges were truly systemic, they would affect all farmers equally. They don’t.

What KTDA has created is not a development agency but a sophisticated apparatus for wealth transfer from one region to another, all while hiding behind technical jargon about exchange rates, altitude, and quality.

The 680,000 small-scale farmers awaiting their pittances deserve better than excuses. They deserve the truth, and they deserve justice.

The question now is whether anyone in power has the courage to dismantle this system of regional tea apartheid, or whether western Kenya farmers will continue subsidizing their more fortunate countrymen while KTDA peddles lies about currency fluctuations and tea quality.

The numbers have spoken. The disparities are undeniable.

KTDA’s excuses have been exposed. What happens next will determine whether Kenya’s tea sector is truly a national asset or simply another instrument of regional inequality dressed in the language of development.

Kenya aims to carry out a pioneering $1 billion debt-for-food security swap by March next year, a finance ministry document showed on Tuesday, as the country looks to novel solutions to ease its hefty debt burden.

A debt-for-food swap would likely allow a country to replace costly existing debt with lower-cost financing on condition it channelled the savings towards programmes to boost food security, finance experts say.

Officials at the Finance Ministry could not be reached for comment, but Finance Minister John Mbadi told a local television station earlier this year the government was in advanced discussions on a swap involving the World Food Programme’s participation.

President William Ruto’s government spends roughly one-third of its revenue on interest payments – one of the highest ratios in the world – and is eager to bring debt spending down.

Debt swap agreements with a focus on social or environmental benefits are becoming an increasingly popular financing tool in poorer parts of the world. Countries including Ecuador, Belize and Gabon have undertaken debt-for-nature deals in recent years.

Kenya, which is East Africa’s biggest economy, had a total public debt equivalent to 67.8% of its GDP at the end of June this year, the Finance Ministry said in the document, which is called an annual borrowing plan.

The government also plans to borrow $500 million using sustainability-linked bonds by March 2026, a World Bank loan of $757 million by March next year and another loan of $457 million in June, the document showed.