AGP Executive Report

Growth & Funding: Kenya is seeking new multilateral financing as growth is projected at about 5% this year; Treasury says the economy expanded 5.1% in the first half. Tax Relief: Treasury CS John Mbadi plans to introduce a bill exempting employees earning Sh32,800 or less from PAYE. Corporate Watch: A Kenyan court has fast-tracked the dispute over Vodacom’s Safaricom takeover, with the 55% stake contested on appeal. Trade & Logistics: Kenya plans a $34 million Naivasha cold-chain hub to cut horticultural export costs, while KPA expands Mombasa Port as cargo volumes rise. Household Finance: Remittances slipped 0.14% to $3.77 billion in the first nine months, as inflows from North America fell 11.2%. Regional Energy: Amsons Group has acquired Oryx Energies’ Tanzanian downstream business for more than $230 million.

Safaricom Deal: A Kenyan court has fast-tracked the battle over Vodacom’s Sh34.5 billion bid to raise its stake in Safaricom, keeping the telecom’s ownership in focus. Trade and Logistics: Kenya plans a US$34 million cold-chain hub in Naivasha to cut horticultural export costs, while Mombasa port expansion aims to handle rising cargo volumes. Economic Outlook: Kenya has reclaimed East Africa’s largest-economy title, with nominal GDP estimated at US$151.15 billion, though the shift partly reflects currency movements. Food Supply: El Niño-linked dry conditions are disrupting fresh milk supplies and pushing up prices, as lower production and rising feed costs squeeze dairy farmers. Fuel Costs: Ruto has extended the 8% VAT on fuel for 90 days, as households and businesses continue to face pressure from high energy costs.

Regional Trade: Kenya and Uganda have agreed to remove remaining barriers to cross-border goods, including vegetables. Officials cited delays and levies that raise costs and damage perishable produce, with one-stop border posts among the planned fixes. Ports and Logistics: KPA is expanding Mombasa with Berth 19B, set to add about 300,000 TEUs of annual capacity, and Dongo Kundu Berth One. New cargo-tracking and gate systems are also planned as volumes rise. Debt and Public Spending: At IMF and World Bank meetings, a Kenyan debt-cancellation campaign said repayments absorb nearly 67% of government revenue, squeezing funds for services. Fuel Costs: MP Ndindi Nyoro proposed subsidies, lower levies and reduced industry margins to cut pump prices, arguing high fuel costs are straining households and businesses. Currency and Remittances: The shilling held at KSh129.81 to the dollar, while September remittances fell to $438.5 million from $451.8 million in August.

Economic Growth: Kenya’s economy grew 5.1% in the second quarter, up from 4.9% a year earlier, as transport, hospitality, construction and financial services helped offset high oil prices and weak rainfall. Cost of Living: Dry conditions and higher feed costs are squeezing dairy production: formal processors collected 5.8% less milk in July than a year earlier, contributing to supermarket shortages and higher prices. The IMF also warns that rising energy and fertiliser costs could push inflation higher across Africa. Ports and Trade: The Treasury has cleared the way for tenders to concession four assets at the Mombasa and Lamu ports, including berths and container terminals, under a public-private partnership plan. Public Finances: Kenya is seeking new multilateral financing as debt repayments absorb a large share of government revenue, limiting room to cushion households from price shocks.

Debt and Financing: Kenya is seeking budget support from the World Bank and African Development Bank before June, including a possible World Bank policy loan and debt-for-food swap. The CBK says IMF funding is not in current plans. Retail IPO: Quickmart has ended several founder-linked consultancy contracts ahead of its KSh30 billion ($231 million) NSE offer, after disclosures showed hundreds of millions of shillings in payments to related firms. Fuel and Shilling: Higher import costs have pushed Nairobi petrol to KSh226.96 a litre, adding pressure on households and businesses; traders also expect rising dollar demand from oil importers to weigh on the shilling. Tech Jobs: Microsoft’s Nairobi engineering operations are reportedly closing amid global restructuring. The company says its Kenya business will continue, but has not disclosed how many local jobs are affected. Small Businesses: Glovo says it trained 50 Nakuru entrepreneurs in digital sales and operations, and its local merchant partners generated more than $1 million in sales last year.

Manufacturing: Unicharm, Toyota Tsusho and CFAO Kenya have launched a Sh2bn sanitary-products venture in Kenya, targeting local production and exports across East Africa. The partners plan to expand into baby-care products. Fuel Costs: Pump prices have risen as higher import costs coincide with depleted funds for subsidies, adding pressure for households and businesses. Access to Finance: A new report estimates a $209bn funding gap for Black-owned businesses across five African markets; in Kenya, they account for 40% of larger businesses. Economic Growth: Kenya has overtaken Ethiopia to become East Africa’s largest economy after five years behind its neighbour. Tax Fraud: Authorities are pursuing an alleged multibillion-shilling VAT invoice fraud scheme, with six arrests reported and three suspects charged in a Sh3.9bn case. Corporate Finance: Kenya Pipeline plans bond sales and bonus shares to preserve cash for projects, after reporting a 13% rise in profit to Sh11.58bn.

Energy Investment: Kenya Pipeline is weighing infrastructure bonds and bonus shares to preserve cash for major projects, including a planned Sh35 billion Mombasa oil-trading hub. The company reported an 13% rise in earnings, but a proposed Sh6 billion dividend would reduce its Sh20.5 billion cash balance. Manufacturing Costs: Manufacturers are asking the High Court to overturn a 433% excise-duty increase on imported industrial sugar, warning that the jump to Sh40 per kilogramme will raise costs, threaten jobs and weaken exports. Clean Technology: Finnfund has committed €10 million in debt to Bisedge Holdings to expand its electric forklift services in Kenya, Nigeria and Tanzania. Refinery Plans: A court has cleared the way for Aliko Dangote’s proposed $16 billion refinery project in Lamu, though a land dispute remains. Fuel Prices: Higher petrol, diesel and kerosene prices are adding pressure on households and businesses after the fuel subsidy ended.

Fuel Costs: EPRA raised petrol by Sh12.93 and diesel by Sh9.90 a litre after the government ended fuel subsidies, though reduced VAT remains in place to cushion consumers. Tax Enforcement: Investigators uncovered a five-year scheme involving Sh42bn in fake invoices and nearly Sh4bn in fraudulent VAT claims. Energy Projects: A court cleared the way for a Spanish firm to pursue Ketraco’s liquidation over a Sh10bn award. Separately, Dangote’s proposed Lamu refinery cleared a legal hurdle, though a land dispute remains. Capital Markets: Kenya climbed to fifth in Africa for raising and moving capital. Quickmart’s IPO is expected to incur Sh575m in fees and costs. Corporate Finance: The government approved $350m in financing for Kenya Airways. Property: Land title issuance fell 35.3% in the year to June, its first annual decline in five years.

Trade and Logistics: Hapag-Lloyd plans to expand its East African services through Mombasa, a boost for Kenya’s bid to capture more regional cargo and compete with Dar es Salaam. Infrastructure Finance: Kenya’s KSh340 billion National Infrastructure Fund has begun buying government bonds as it seeks returns to support projects in transport, energy, ICT, water and agriculture while limiting reliance on fresh borrowing. Technology Jobs: Microsoft plans to close its Nairobi engineering centre, putting local tech jobs at risk as the government seeks to protect employment at the US firm. Economic Outlook: Kenya’s economy is forecast to grow slightly faster in 2027 as inflation eases, though higher fuel import costs remain a pressure point. Agriculture: Cooperatives could help farmers secure buyers, finance and better prices; Kenya imported about KSh316 billion worth of wheat, rice, maize, sugar and edible oils last year, offering local producers room to grow.

Economic Outlook: The IMF expects Kenya’s growth to rise to 4.7% in 2027 from 4.5% this year, with inflation easing to 5%. Fuel Costs: The government is seeking to extend the 8% VAT on petrol, diesel and kerosene to mid-December as global oil prices climb. Business Climate: Kiambu and Nakuru top a new county index, with Mombasa third; infrastructure, market access and finance are key advantages. Public Finances: Road-sector bills have fallen by Sh68.6 billion from their 2023/24 peak, easing pressure on contractors, though Sh98.2 billion remains unpaid. Investor Protection: The CMA plans risk ratings for 320 unit trusts managing nearly Sh949 billion, to help investors assess funds. Aviation: Kenya Airways has approval for a Sh45.15 billion government loan to support its turnaround.

Public Debt: Debt repayments are set to consume nearly 80% of Kenya’s ordinary revenue in the year to June 2027, squeezing funds for other priorities. Kenya Airways: Cabinet approved $350 million in financing to cover urgent obligations and return grounded aircraft to service, alongside plans to restructure about $941 million in government loans. Infrastructure: A Sh4 trillion project pipeline is drawing international construction firms as the sector rebounds, with growth of 6.8% in 2025. Tea Earnings: Annual bonuses range from Sh12 to Sh50 per kilogramme, prompting protests over low payouts and calls to cut taxes. Business and Technology: M-KOPA says it has reached 10 million customers across five markets, while Microsoft plans to close part of its Nairobi engineering hub. Markets and Prices: The IMF lowered its 2027 inflation forecast for Kenya to 5%, while a court ruling blocked the suspension of a judgment overturning the Sh204.3 billion Safaricom share sale.

Capital Markets: Dangote has extended his $1.6 billion refinery IPO to October 27 to give more African investors time to participate. Kenya has cleared residents to invest; Nigeria’s regulator advises using approved platforms. Rail Finance: Sh44.6 billion in SGR fares and freight revenue remains locked in accounts under China loan terms. Treasury wants to renegotiate, saying the restrictions leave taxpayers to fund loan repayments. Trade: KRA collected Sh90 billion in customs revenue in September, beating its target by Sh965 million as imports rose 25.6 per cent. Growth & Credit: Mudavadi says Kenya’s GDP growth has reached 5.3 per cent, while September loans signal stronger private-sector credit. Aviation: The government has approved a Sh45 billion financing package to return grounded Kenya Airways planes to service as the airline faces a major debt overhaul.

Economic Growth: Musalia Mudavadi says Kenya’s GDP grew 5.3% in the first quarter of 2026, while foreign-exchange reserves reached Sh1.93 trillion, covering 6.1 months of imports. Trade and Tax: KRA collected Sh90 billion in customs revenue in September, 5.8% more than a year earlier, as imports rose 25.6%. Markets: Quickmart has ended contracts with founder-linked firms ahead of its IPO, a move the retailer says will strengthen governance. Kenyan investors can also subscribe to Dangote Refinery’s NSE-listed offer from KSh535, with applications closing October 13. Agriculture: East Africa Foods raised about $40 million to expand storage, transport and digital food distribution in Kenya and Tanzania, aiming to improve market access for smallholder farmers and cut post-harvest losses.

Fiscal Pressure: Kenya faces a Sh1.7 trillion debt repayment bill before June 2027, while KRA fell Sh58.2 billion short of its first-quarter revenue target, despite stronger collections than a year earlier. Banking: Bad loans dropped to 13.9% in September, a 44-month low, as lending rates eased and private-sector credit growth reached 10.6%. Refinery Debate: Presidential aspirant Patrick Osoi says he would halt Aliko Dangote’s proposed $16 billion Lamu refinery in favour of local investors, adding political uncertainty to a project already facing land and community disputes. Power Costs: October electricity tariffs rose by KSh4.10 per kilowatt-hour, increasing costs for households and businesses.

Power Costs: October’s electricity adjustments add about KSh4.10 per kilowatt-hour, raising bills for Kenyan households and businesses. Farm Exports: China and the EU are competing to deepen agricultural ties with Kenya, as Europe backs routes to market for flowers and vegetables and China opens its market to African produce. Regional Trade: South Sudan has broken ground on a cargo hub at Naivasha’s special economic zone, aiming to move freight from Mombasa by rail and speed trade. Infrastructure: President William Ruto says the Rironi–Mau Summit highway will open in April 2027, ahead of its earlier June target. Agriculture: More than 5,700 farmer groups in Homa Bay will share KSh28.8 million in grants for rice, coffee, banana, cotton and dairy production. Global Risks: War-driven energy and fertilizer price shocks, alongside high debt, will dominate IMF and World Bank meetings in Thailand, clouding the outlook for economies such as Kenya’s.

Power Costs: EPRA’s October adjustments add KSh4.10 per kWh to electricity bills, raising costs for households and businesses. Agriculture: President Ruto launched cocoa as a scheduled cash crop and plans to distribute seedlings, aiming to diversify farm incomes and build local production. Digital Economy: Kenya is exploring a partnership with Equity Group to link digital infrastructure, financial services and regional trade; Nairobi will also host the Africa Blockchain Festival on October 15–17. Coffee Exports: Kenyan-founded Kahawa 1893 is expanding into Trader Joe’s stores in the US, a boost for the country’s specialty coffee profile. Public Finances: Treasury used 77% of first-quarter tax revenue for debt repayments, underscoring pressure on funds available for public investment. Business Climate: The government says it will ease barriers to doing business and widen access to finance.