Hello, I’m Annah. Welcome to today’s edition of The Business Roundup, your go-to source for the latest insights into Kenya’s evolving business scene. In this edition, we look at how Kenyans are digging deeper into their pockets to pay higher fares, how the government borrowed KSh 1.25 trillion in one year, the auction of 10 oil blocks, and other key stories.
Kenya’s inflation rose to 4.5% in August 2025 from 4.1% in July, with core inflation at 3.0% as the index dipped slightly to 129.57, while non-core inflation stood at 9.2%.
This means that the general price level in August 2025 was 4.5% higher than in August 2024. The increase was mainly driven by higher prices in Food and Non-Alcoholic Beverages (8.3%), Transport (4.4%), and Housing, Water, Electricity, Gas, and Other Fuels (0.8%) over the one-year period.
Together, these three divisions account for more than 57% of the total weight across the 13 major expenditure categories.
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Kenyans Pay More for Fare and Gas as Inflation Hits 4.5%
In August 2025, prices within the food and non-alcoholic beverages division showed mixed trends. Price drops were recorded for items such as fresh unpacked cow milk (-0.9%), fortified maize flour (-1.7%), sifted maize flour (-1.5%), beans (-0.7%), loose maize grain (-0.4%), and oranges (-0.7%).
On the other hand, notable increases were observed in vegetables, with cabbage prices registering the highest rise at 6.3%, followed by carrots (2.4%), sukuma wiki (1.9%), and tomatoes (1.2%).
Prices of white wheat flour, onions (bulb), and leeks rose by 0.9% each, while potatoes increased by 0.7%.
In the transport division, prices also showed mixed movements. Petrol prices fell by 0.5%, while Diesel prices remained unchanged during the month.
However, passenger transport costs rose sharply, with the bus/matatu fare on the Mombasa–Nairobi route increasing by 15.4%. Local transport costs also went up, as tuk-tuk fares rose by 1.5%.
Prices in the housing, water, electricity, gas, and other fuels division showed varied trends. Electricity charges declined, with 50kWh band prices falling by 2.3% and 200kWh band prices dropping by 2.1%.
Similarly, Kerosene/Paraffin prices decreased by 0.6%. On the other hand, single-room house rent increased by 0.1%, while gas/LPG prices rose by 0.4%.
Kenya to Auction 10 Multibillion Oil Blocks
Kenya is preparing to put 10 oil and gas exploration blocks up for auction this September, marking its first licensing round since introducing a new petroleum law six years ago.
Principal Secretary for Petroleum, Mohamed Liban, on Monday, September 1, said Kenya currently has 50 blocks across four sedimentary basins, with 10 now ready for exploration.
“We have 50 blocks in four sedimentary basins, of which 10 are ready for marketing,” Mohamed Liban said. “This offering represents a new era in petroleum exploration, aligning Kenya with global standards.”
According to Commissioner for Petroleum Joseph Otieno, the blocks on offer this month are in the Anza and Lamu basins.
The offered blocks were selected based on geoscientific data to ensure a transparent allocation process, with the government providing detailed seismic surveys, geological reports, and well data.
The move follows Kenya’s decision in May to restructure petroleum exploration blocks by introducing flexible contracts and tax incentives.
How Kenya borrowed Ksh1.25 trillion in One Year
The government borrowed Ksh1.25 trillion in the just-ended financial year, according to new figures from the Central Bank of Kenya (CBK), sparking growing concern among economists and citizens over the country’s debt trajectory.
According to CBK’s Weekly Bulletin released on August 29, the state borrowed Ksh916 billion from the domestic market and an additional Ksh334 billion from external sources between June 2024 and June 2025.
The surge in debt pushed the total public debt stock to Ksh11.81 trillion by June 2025, representing 73% of the estimated 2024 GDP of Ksh16.2 trillion. The new debt alone amounted to 7.7% of GDP.
Kenya’s debt ceiling was repealed in 2022 in favor of a debt anchor set at 55% of GDP in present value terms, but current levels have far exceeded that threshold when assessed in nominal terms.
According to the report, banking institutions remain the largest holders of government domestic debt (45%), while pension funds and insurance companies also maintain exposure, raising systemic concerns.
Pending Bills Rise to Ksh 104 Billion
Pending government bills surged by Ksh104 billion between April and June 2025, reversing months of progress in clearing verified dues despite efforts to reduce arrears.
Data from the National Treasury shows that outstanding pending bills by the national government rose to Ksh525.9 billion at the end of June, up from Ksh421.6 billion in March.
Previously, the arrears—mostly owed to suppliers and contractors—had fallen by Ksh118 billion from Ksh539.9 billion in December 2024 as the government began clearing verified dues, starting with the road sector. However, the recent increase threatens efforts to unlock billions of shillings in liquidity into the economy.
“The outstanding pending national government bills as of June 30, 2025, amounted to Sh525.9 billion. They comprise Ksh404.3 billion (76.9 per cent) for State Corporations (SCs) and Ksh121.6 billion (23.1 per cent) for ministries, State departments, and other government entities,” the National Treasury said.
“The SCs’ pending bills include payment to contractors/projects, suppliers, unremitted statutory and other deductions, pension arrears for Local Authorities Pension Trust, and others.”
The pending bills had previously declined by Ksh118.3 billion after the Treasury authorised ministries and State departments (MDAs) to pay verified arrears.
By May 2025, the pending bills verification committee had cleared Ksh578 billion out of the Ksh663 billion submitted. Of the verified amounts, only Ksh229 billion was certified for payment, including Ksh80 billion for road projects.
ALSO BIG THIS WEEK:
- Old Mutual has secured Treasury exemptions to convert a Ksh 8.1 billion loan from its parent into preferential shares, lifting foreign ownership limits. The move raises Old Mutual EA’s stake above 66.7% and helps cut debt costs as profits fell 99% to Ksh 5 million.
- Kenyan banks have cut back on personal loans for the first time in seven years as defaults rise and high interest rates bite.
- Kenyans will soon be able to make informed choices on where to seek treatment after the government unveiled plans to assign every hospital in the country a quality score — similar to the star ratings used for hotels.
- Laikipia and Taita Taveta counties recorded the highest growth in acreage under coffee in Kenya, highlighting the new zones preferred by investors for production of the key foreign exchange earner. Analysis of new data shows that the area under coffee in Laikipia grew by 32.8% in the 2023/24 crop year — the highest increase across the 33 counties where the crop is grown — followed by Taita Taveta at 20%.
- TotalEnergies Marketing Kenya PLC has announced the appointment of Biova Agbokou as the new director and chairperson of the board.
- Global insurtech Bolttech has entered Kenya through a partnership with NCBA’s LOOP. Starting in October, they will launch LOOP Flex, a device financing and protection program covering theft, damage, breakdown, and warranty, embedded directly into LOOP.
- The United Nations has stepped in to plug a housing gap in Nairobi’s high-end suburbs, offering relief to landlords who were hit hard by the departure of USAID staff under former U.S. President Donald Trump.
- The Communications Authority of Kenya (CA) has issued a directive targeting fake and substandard digital TV decoders. The new regulations require all suppliers and vendors of digital TV receivers to obtain Type Approval before importing, selling, or distributing them in the country. These rules, effective from July 1, 2025, replace earlier specifications issued in 2012 and 2015.
- According to CA, all DVB-T2 receivers—including Integrated Receiver Decoders (IRDs), TV sets with integrated IRDs, and Conditional Access Modules (CAMs)—must be Type Approved by the Authority before their importation, sale, or use in Kenya.
- Kenya’s coffee exports reached Ksh 36.9 billion in the first half of 2025, nearly doubling the Ksh 19.3 billion recorded in the same period of 2024. Strong demand and firm global prices fueled the best half-year performance in a decade.
- Kenya and Uganda have agreed to eliminate all tariff and non-tariff barriers to trade. In 2024, Uganda accounted for 65.6% of Kenya’s total transit volume
- Meta has taken a stake in Safaricom’s ambitious $2.9 (Ksh379.9 billion) subsea fibre-optic cable project, strengthening digital links between East Africa and the Middle East.
Currency Trends
The Kenya shilling remained stable against major international and regional currencies during the week ending August 28, 2025.
It exchanged at Ksh 129.24 per USD on August 21, unchanged from the previous day.
Kenya’s apex bank, the Central Bank of Kenya (CBK), quoted the shilling at 129.2397 on Tuesday, September 2.
Against other major currencies, the shilling traded at:
- Sterling Pound – Ksh174.9841
- Euro – Ksh151. 3126
- South African Rand – 7.3448
- Japanese Yen (100 units) – Ksh87.7898
Against regional currencies, the shilling exchanged at:
-
- Ugandan Shilling – Ksh27.4219
- Tanzanian Shilling – Ksh19.3826
- Rwandan Franc – Ksh11. 2040
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