AGP Executive Report

Energy Investment: President William Ruto defended the transfer of a 25% stake in Kenya Pipeline Company to private investors for about Sh42 billion, saying it would help finance strategic infrastructure. The buyers have not been publicly identified. Refinery Development: A second shipment of heavy machinery has arrived at Lamu for Dangote’s planned $17 billion refinery, which is designed to supply East African fuel and support petrochemical, fertiliser and power production. Fuel Costs: Global shipping disruptions are driving pump-price pressure, raising costs for manufacturers, farmers and transporters; activists are demanding tax relief and greater transparency in fuel pricing. Dairy Industry: Ruto says farmers will receive Sh65 per litre of milk from October, plus a quarterly Sh2 bonus, as Kenya faces a milk shortage despite record production. Infrastructure Costs: A court has ordered the Kenya Airports Authority to pay more than Sh1.25 billion over the terminated Nanyuki airstrip contract; interest has pushed the amount to about Sh2 billion before costs.

Minerals and Energy: African Mining Week delegates urged local processing of critical minerals, with regional hubs proposed to create jobs and keep more value in Africa. Agribusiness: Makueni plans to concession its Sh1 billion Kalamba fruit plant to a private operator, aiming to lift processing and returns for farmers. Financial Services: Nedbank has acquired a 66% controlling stake in NCBA for about Sh110 billion; the bank will retain its Nairobi headquarters, brand and NSE listing. Business Funding: A new report puts the financing gap for Kenyan Black-owned and -led businesses at $23 billion, highlighting a major barrier to growth. Trade: Kenya’s imports from India rose 92% to Sh282 billion from March to August, making India the country’s second-largest source of goods after China.

Manufacturing: Caparol and Kenyan partner Nasib Industrial Products plan to double local paint production, positioning Kenya as a supply hub for East Africa. Urban Development: Kenya Railways has outlined a Sh30 billion Nairobi Railway City on 438 acres, with affordable housing, a new multimodal station and commercial zones planned through a public-private partnership. Agriculture: A dry spell is disrupting fresh milk supplies, exposing gaps in dairy policy as the government promises lower prices and expanded New KCC production. Trade and Logistics: KPA says it will expand port capacity as cargo volumes rise, including through Mombasa’s Berth 19B and Dongo Kundu projects. Business Finance: Kenya climbed to fifth in Africa’s financial markets index, though weak market depth and pension-fund development remain hurdles to turning the gains into more business financing. Digital Payments: Mastercard and Moovn signed a five-year deal to expand cards, online payments and transfers across East Africa, with Pay Local rolling out in Kenya and Tanzania.

Public Health and Tourism: Kenya’s Ebola count has risen to eight, with tourism and hospitality businesses reporting cancellations and safety concerns ahead of the peak season. Dairy Industry: President William Ruto says New KCC factories will operate independently, with a target of Sh65 per litre for farmers and lower prices for consumers. Energy and Healthcare: Kenya plans an Sh80 billion nuclear research reactor at Konza to produce cancer-treatment drugs locally, while a Sh351 million electricity project will connect 3,851 homes in Nandi. Trade and Logistics: Mombasa Port expansion aims to lift cargo capacity, and a planned $34 million Naivasha cold-chain hub is intended to support horticultural exports. Transport Costs: The latest fuel-price increase is drawing a 14-day ultimatum from commuter groups, who warn higher pump prices will add to travel costs.

Tax and Jobs: Treasury plans to exempt workers earning up to Sh32,800 a month from PAYE, with a Bill expected in November; the government says the measure will ease pressure on low-income households. Project Delivery: Deputy President Kithure Kindiki warned contractors that delays and shoddy work on public projects could lead to arrest and prosecution. Consumer Protection: Kenya’s Anti-Counterfeit Authority won two African awards for enforcement and consumer-protection work, highlighting the fight to protect legitimate businesses. Trade and Logistics: Kenya plans a US$34 million cold-chain hub in Naivasha to support horticultural exports, while Uganda and Kenya agreed to remove barriers affecting agricultural trade. Ports and Industry: Mombasa Port’s expansion is advancing as cargo volumes rise, with new capacity planned at Berth 19B and Dongo Kundu. Kisumu’s cement industry is also set to grow with a new factory in Nyando. Economic Outlook: Kenya’s economy grew 5.1% in the first half of 2026, while the government is negotiating new international financing to support investment and development.

Trade and Investment: KNCCI has convened the Africa Commerce and Industry Summit in Nairobi, bringing together more than 5,000 delegates from 50 countries to advance trade and investment. Ports and Logistics: KPA is expanding Mombasa Port as cargo volumes rise, including Berth 19B and Dongo Kundu projects. Agriculture Exports: Kenya plans a US$34 million Naivasha cold-chain hub to consolidate regional horticultural exports and move cargo by rail to Mombasa. Regional Trade: Kenya and Uganda have agreed to remove barriers affecting agricultural exports, including discriminatory levies and border delays. Food Industry: El Niño-linked dry conditions are cutting milk production and disrupting supermarket supplies, adding pressure on dairy producers and consumers.

Ports & Logistics: KPA is expanding Mombasa Port as cargo volumes rise. Berth 19B is expected to add 300,000 TEUs of annual capacity, while Dongo Kundu and new cargo-tracking systems aim to improve trade flows. Regional Trade: Kenya and Uganda have agreed to remove remaining barriers on cross-border goods, including vegetables, and improve border operations to cut delays and losses for exporters. Agri-business: Busia farmers are turning pumpkins and other crops into porridge flour and oil to reduce waste and create new income. Manufacturing: A proposed Sh60 million cement plant in Kisumu County would process about 180 tonnes a day, supplying Western Kenya. Export Logistics: A planned €30 million cold-chain hub in Naivasha would consolidate regional horticultural produce for rail shipment to Mombasa, targeting lower transport costs and post-harvest losses. Fuel Costs: Nairobi petrol rose to Sh226.96 a litre and diesel to Sh227.76, adding pressure on transport and business costs.

Energy Costs: Kenya has extended the 8% fuel VAT for 90 days, but steep pump-price hikes and rising energy and fertilizer costs threaten to lift inflation and squeeze businesses and households. Ports & Logistics: Treasury has cleared KPA to tender concessions covering Mombasa and Lamu port assets, including container terminals and the Lamu Special Economic Zone, opening the way for private investment. Manufacturing: Unicharm and Toyota Tsusho are investing Sh2 billion in a Kenyan sanitary-pad venture, adding momentum to local production. Agriculture: El Niño-linked dry conditions and rising feed costs have cut formal milk collection by 5.8% year-on-year, contributing to supermarket shortages and higher prices; West Pokot also reports crop failures. Economic Growth: Kenya’s economy expanded 5.1% in the second quarter despite oil shocks and below-average rainfall, with transport, storage, construction and ICT among the supporting sectors.

Fuel & Costs: Kenya’s fuel VAT has been held at 8% for another 90 days, but pump prices still rose sharply for October–November, keeping pressure on transport, manufacturing and household budgets. Infrastructure: A Sh4.4 billion road linking West Pokot, Turkana, Baringo and Elgeyo-Marakwet is 60% complete, with the government expecting faster movement of people and goods. Manufacturing: Unicharm and Toyota Tsusho are investing Sh2 billion in a Kenyan sanitary-pad venture, expanding local production. Supply Chains: Maersk warns above-average October–December rains could damage roads and disrupt cargo flows to ports, delaying imports and exports across East Africa. Business Finance: Kenya is in talks with the World Bank and African Development Bank for new financing, potentially including budget support and a debt-for-food swap. Technology: Microsoft is closing engineering operations at part of its Nairobi hub as global restructuring affects local jobs.

Manufacturing: Japan’s Unicharm, Toyota Tsusho and CFAO Kenya have launched a Sh2 billion sanitary-products venture, with local production and regional exports planned. The company may later expand into baby care. Energy Costs: EPRA’s latest fuel-price increase, driven by higher import costs and Middle East supply disruptions, raises pressure on households and businesses; the regulator warned prices could rise further. Ports & Trade: KPA is stepping up automation and expansion as Mombasa cargo volumes grow, while Trade CS Lee Kinyanjui urged African chambers to cut cross-border barriers and help businesses reach new markets. Energy Investment: A court lifted the order blocking construction of Dangote’s proposed Lamu refinery, clearing a legal hurdle while the land dispute remains unresolved. Agriculture: Kenya plans a $35 million cold-chain hub to lower horticultural export costs.

Fuel Costs: Kenya raised petrol prices by 6% and diesel by 4.5% as Middle East tensions drive up import costs, adding pressure on transport, agriculture, construction and household budgets. A reduced 8% VAT rate on fuel remains in place until January 14. Refinery Investment: A Malindi court lifted an order blocking construction of Dangote’s planned $16 billion Lamu refinery, clearing a legal hurdle while a land dispute remains unresolved. Industrial Tax: The Kenya Association of Manufacturers is challenging a 433% excise duty increase on imported industrial sugar, warning that higher input costs could hurt production, exports and jobs. Electric Logistics: Finnfund committed €10 million in senior debt to Bisedge Holdings to expand electric forklift services in Kenya, Nigeria and Tanzania, helping industrial and logistics customers avoid buying equipment outright. Local Manufacturing: Nairobi-based HACO Industries makes about 90 household, hair and skincare products, reaching more than three million families and sourcing raw materials from over 500 African farmers. Energy Infrastructure: Kenya Pipeline reported KSh11.58 billion in net profit, up 13%, and KSh43 billion in revenue as it looks beyond fuel transport toward regional expansion.

Fuel Costs: Petrol rose by KSh12.93 a litre and diesel by KSh9.90 after the government withdrew its fuel subsidy, pushing up transport and operating costs for businesses. Power Sector: A court cleared a Spanish contractor to pursue Ketraco’s liquidation over an unpaid award now worth about KSh10 billion, raising pressure on the state-owned transmission firm. Technology Jobs: Microsoft is preparing to close its Nairobi Africa Development Centre, putting nearly 400 jobs at risk and dealing a blow to Kenya’s ambitions as a technology hub. Energy Investment: A Malindi court lifted an order blocking Dangote’s proposed KSh2.2 trillion Lamu refinery, allowing the project to proceed while a land dispute remains unresolved. Oil and Logistics: Kenya Pipeline Company reported pre-tax profit of KSh17.5 billion and revenue of KSh43 billion, as it plans regional expansion. Tax Compliance: Investigators say a fake e-invoice scheme generated KSh42 billion in invoices and exposed KRA to nearly KSh4 billion in false VAT claims.

Energy: Kenya Pipeline Company reported pre-tax profit of KSh17.54 billion, up 8%, as revenue rose 9% to KSh43 billion, supported by higher local and transit volumes. Trade and Logistics: Hapag-Lloyd plans to strengthen East African services through Mombasa, a boost for the port’s contest for regional cargo. Infrastructure Finance: Kenya’s KSh340 billion National Infrastructure Fund has begun buying government bonds as it seeks to mobilise capital for projects in transport, energy, water, agriculture and technology. Agriculture: Stronger cooperatives could help farmers secure buyers, finance and better prices, while connecting local production to a large import-replacement opportunity. Water Services: MPs say providers must curb leaks and other inefficiencies before tariffs rise; about 48% of treated water is lost. Healthcare Manufacturing: The Health Ministry is pressing KEMSA to improve access to essential medicines and says local production could strengthen supplies and lower costs.

Fuel Costs: The government is seeking to extend the 8% VAT on petrol, diesel and kerosene by 90 days, as Middle East tensions push up import costs. Infrastructure: China Road and Bridge Corporation won a Sh3.22 billion contract to upgrade Old Mombasa Road, linking the Nairobi Inland Container Depot with Syokimau. Road-sector pending bills fell by Sh68.6 billion in the year to June, easing pressure on contractors. Business Climate: Kiambu and Nakuru top a new county index for business conditions, with Mombasa third; weaker infrastructure and market access leave several northern counties trailing. Agriculture: The Sh147 million Ziwa 2 irrigation project is set to bring 500 acres under irrigation and benefit 1,000 farmers. A Busia dialogue also focused on reducing barriers to agroecological trade between Kenya and Uganda. Transport: Rehabilitation of the Voi–Taveta railway is 40% complete, with the revived line expected to support freight, tourism and cross-border trade. Economic Outlook: The IMF forecasts Kenya’s growth edging up to 4.7% in 2027, with inflation easing to 5%. Manufacturing: Peptang maker Premier Foods lost a Sh180.8 million tax dispute after failing to update records tied to an industrial sugar duty remission.

Infrastructure: Kenya’s Sh4 trillion project pipeline is drawing global construction suppliers to Nairobi, as the sector rebounds with 6.8% growth in 2025. Energy Investment: Kenyan parliamentary leaders have backed the proposed Dangote refinery in Lamu, even as a presidential aspirant vows to block the project, leaving a major industrial investment contested. Agriculture: Tea bonuses ranged from Sh12 to Sh50 per kilogramme, prompting protests over low payouts and calls to scrap taxes blamed for cutting farmers’ earnings. Manufacturing: Four salt producers won a High Court ruling against Kilifi County’s Sh200-per-tonne levy, which the court found lacked proper public participation and a service justification. Technology Jobs: Microsoft plans to close part of its Nairobi engineering centre, creating uncertainty for affected staff while the company says it will retain a presence in Kenya.

Energy & Investment: Dangote extended his refinery IPO to October 27 to attract more African investors; Kenyans have approval to participate. His proposed $16bn Kenya refinery, meanwhile, faces opposition from a presidential aspirant, raising questions about investment certainty. Mining & Manufacturing: Tata Chemicals Magadi is challenging a government order halting operations, saying the community complaint cited to justify it has not been disclosed. Transport & Logistics: Sh44.6bn in SGR fare and freight revenue remains locked in accounts under loan terms, even as the Treasury pays China’s lender from tax revenues. KPA says its new Berth 19B is 56% complete and will add 300,000 TEUs of capacity. Construction & Power: Construction grew 6.8% in 2025, with a Sh3.4tn project pipeline, though funding and delivery remain uncertain. Electricity tariffs rose by Sh4.10 per kWh in October. Technology: Microsoft’s Nairobi engineering operation reportedly faces closure amid restructuring; the company has not confirmed the entire centre will shut.