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Dear Briefers,

Welcome to the first edition of The Waswa Brief - a weekly digest spotlighting legal and policy developments shaping Kenya, East Africa, and the continent. Every week we break down what’s changing, why it matters, and where the law is headed next. This edition covers 

Virtual Asset Providers Bill Assented to Law
President Ruto has signed the Virtual Asset Providers Bill, creating Kenya’s first licensing and oversight framework for crypto exchanges and service providers. The law brings long-awaited clarity to digital assets, signalling Kenya’s intent to align with international standards on anti-money laundering and consumer protection.

Computer Misuse and Cybercrime (Amendment) Bill Signed
The Computer Misuse and Cybercrime (Amendment) Bill 2025 also received presidential assent, enhancing investigative powers and broadening admissibility for digital evidence. While this may tighten accountability online, it also raises debate on surveillance and privacy safeguards.

Cyber Threats Soar Across the Economy
The Communications Authority reported over 842 million attempted cyberattacks in just one quarter — a staggering figure that exposes how quickly Kenya’s digital risk surface is expanding. Experts say businesses are digitizing faster than regulators can keep up.

Safaricom Data-Leak Settlement Talks Collapse
Safaricom’s bid to settle a civil suit over the alleged theft of data from 11.5 million subscribers collapsed on October 8, paving the way for a full hearing. Former managers and Benedict Kabugi allegedly used an algorithm to exploit betting patterns and stole sensitive data—names, IDs, locations, and gambling histories—stashing it on password-locked Google Drives and laptops, two still missing. Safaricom seeks a permanent injunction and compensation if regulators impose sanctions, warning that 23% of its customers’ data risks wider exposure. Kabugi demands Ksh100 million for himself and Sh10 million per affected subscriber, accusing Safaricom of violating the Data Protection Act. The case resumes October 30 amid ongoing criminal proceedings.

Insurance Regulator Eyes Crypto Coverage
The Insurance Regulatory Authority is drafting guidelines that would allow insurers to offer coverage for digital assets. It’s a small but symbolic step in recognising virtual assets as part of Kenya’s financial ecosystem.

AI to Guide Grade 9 Placement
The Ministry of Education has rolled out a smart new system using Artificial Intelligence to help Grade Nine students move smoothly into senior school—another big win for Competency-Based Education (CBE). Basic Education Principal Secretary Julius Bitok shares that this AI tool, currently being tested, will place 1.13 million students taking the Kenya Junior School Education Assessment (KJSEA) starting 27th October 2025 The system’s goal is to make sure every learner, no matter where they live, gets a fair shot at landing a spot in top schools. It’s a fresh, fair approach to school placements, bringing transparency and equal opportunity to the process.

Evon Energy Loses KES 578M Tax Appeal
Evon Energy International failed to overturn a KRA tax demand of Ksh 578.6 million due to late appeal filings. The company missed the statutory 14-day window to submit crucial documents like the Memorandum of Appeal and Statement of Facts, submitting them on January 17, 2025, well after the January 6 deadline. The Tax Appeals Tribunal dismissed Evon’s case, stressing that any late filing requires prior tribunal approval, which Evon did not seek. The tribunal cited Section 13 of the Tax Appeals Tribunal Act, which allows extensions only for reasons such as sickness or absence from Kenya—and even then, approval is mandatory. This decision reinforces strict adherence to filing deadlines.

KRA Tightens Grip on Tax Waivers
The Kenya Revenue Authority (KRA) aims to close a massive Ksh 1.78 trillion VAT gap by slashing tax waivers and exemptions. A July 2025 internal report shows that exemptions, not just non-compliance, drive the shortfall. The KRA has already phased out certain exemptions, including on digital media storage and some geothermal goods under the Finance Act of 2025. Now, it may review exemptions on basic foodstuffs like maize flour and bread, essential services such as healthcare and education, and agricultural inputs. While this may raise living costs, the move boosts revenue and promotes fairness. KRA also plans to tighten compliance with tech tools like the Electronic Tax Invoice Management System (eTIMS), in a bid to create a more transparent and efficient tax system.

Salvage Vehicles Declared VAT-Exempt
In October 2025, Nairobi’s High Court ruled that insurance companies do not owe VAT on salvage motor vehicle sales, a major win against Kenya Revenue Authority (KRA). The dispute involved ICEA Lion, which faced an Sh88.8 million VAT claim for salvaged cars sold between 2015 and 2018. The Tax Appeals Tribunal had sided with ICEA Lion in 2023, and the High Court upheld that decision. The court explained that salvage is not a commercial sale but part of the insurance contract under the doctrine of subrogation—the insurer steps into the insured’s shoes, so the disposal isn’t a taxable supply. This reinforces that insurance business remains VAT-exempt and protects insurers and policyholders from extra costs. The ruling also sets a broader precedent for financial services tax disputes.

eTIMS Frustrates Small Businesses
The Kenya Revenue Authority’s (KRA) recent "TCC Enhancements" require all businesses and individuals earning non-employment income to fully comply with the electronic Tax Invoice Management System (eTIMS) and maintain VAT Special Table status to qualify for or renew their Tax Compliance Certificates (TCC). This means small and medium-sized enterprises (SMEs) must register on eTIMS, file returns on time, pay taxes promptly, and settle outstanding liabilities or have approved payment plans. While designed to tighten compliance and promote fairness, the sudden, strict enforcement risks increasing operational costs and blocking access to tenders and licenses for SMEs, sparking criticism for lacking sensitivity to smaller taxpayers’ challenges. KRA encourages taxpayers to update their profiles, seek support if needed, and offers avenues for clarifications

Kenya Airways Expands Qatar Codeshare
Kenya Airways and Qatar Airways have deepened their partnership by launching codeshare flights to 19 destinations across Africa, the Middle East, and Asia, starting October 26, 2025. This deal allows Kenya Airways customers to connect through Doha to 10 Asian and Middle Eastern cities, while Qatar Airways passengers gain seamless access to eight African destinations via Nairobi, including Juba, Lilongwe, and Victoria Falls. The partnership also introduced Qatar Airways’ third daily flight between Doha and Nairobi, boosting connectivity and convenience with coordinated schedules, shorter layovers, and smoother baggage transfers. Both airlines emphasize this move as a game-changer for travel and trade in the region.

Kenyan Passport Ranking Slips
Kenya’s passport dropped six places to rank 73rd globally on the 2025 Henley Passport Index, down from 67th last year, primarily due to fewer reciprocal visa waiver agreements despite Kenya abolishing visa requirements for nearly all African nationals in July 2025. Kenyan passport holders now access 70 countries visa-free or with visa on arrival, down from 74 in January 2024. Regionally, Kenya ranks 10th among African countries, trailing Seychelles, Mauritius, South Africa, Botswana, and others. Notably, the Schengen area remains off-limits without a visa unless a valid Schengen residence permit is held. The index, based on IATA data, reflects diplomatic ties and economic stability as key in passport strength. While Kenya’s reforms have boosted inbound tourism, they haven’t expanded travel freedom abroad, causing this decline

IFC Backs Axian’s Takeover of Wananchi Group
Axian Telecom of Mauritius is set to complete its acquisition of a 99.63% stake in Wananchi Group with backing from the International Finance Corporation (IFC), which is anchoring a $550 million bond issuance including a $75 million IFC investment. Wananchi, known for its Zuku brand, provides fibre, internet, and pay-TV across Kenya, Uganda, Tanzania, Malawi, Rwanda, and other COMESA countries. The acquisition, pending regulatory approvals but progressing through 2025, will deepen Axian’s presence in East Africa’s digital and telecom market, where Wananchi holds a strong market share—around 17% of Kenya’s fixed internet market and 10-15% pay-TV market in Uganda and Malawi. This strategic move expands Axian’s footprint among its 42.9 million mobile subscribers across Africa

Five COMESA States Stall Tripartite Free Trade Area Rollout

Five COMESA members — the DRC, Ethiopia, Eritrea, Eswatini, and Somalia — are holding back the full rollout of the Tripartite Free Trade Area (TFTA), a mega-bloc uniting COMESA, the EAC, and SADC into a single 26-nation market. The resolution, made at the 24th COMESA Heads of State Summit in Nairobi, urged the five to ratify and fully join to unlock harmonised trade and policy integration across the region. The TFTA, which came into force in July 2024 after Malawi, Angola, and Lesotho’s ratifications, already covers over 60% of Africa’s GDP and 800 million people. Leaders said full participation would accelerate tariff liberalisation, road transport harmonisation, and cooperation with the AfCFTA Secretariat, paving the way for a seamless Cape-to-Cairo trade corridor.

Survey Ranks Kenya’s Best and Worst Counties for Small Businesses

Recent reports by Viffa Consult and KNBS ranked Uasin Gishu, Machakos, Nairobi, Nakuru, Bungoma, and Mombasa as Kenya’s best counties for small businesses, citing strong infrastructure, affordable licenses, and SME-friendly policies. Kisii, Kakamega, Nyandarua, Makueni, and Kajiado performed worst, weighed down by poor infrastructure, limited financing, and weak business support. The findings underscore widening gaps in county competitiveness and how devolution continues to shape Kenya’s business climate.

Red Sea Disruptions Raise Export Costs
Kenya faces rising trade costs to Europe due to ongoing attacks in the Red Sea, which force shipping companies to reroute vessels around the Cape of Good Hope, nearly doubling transit times from 24 to 40 days. This longer journey inflates freight costs by over 40%, with shipping lines imposing extra surcharges and insurance premiums to cover heightened risks. Kenyan exporters, especially in agriculture—such as tea, coffee, and fresh produce—bear increased spoilage risks, affecting competitiveness in European markets. Importers also face higher shipping charges, driving up prices for consumers. These disruptions threaten Kenya’s trade efficiency and highlight the urgency for shipping and logistics adaptations.​

China Grants Duty-Free Access to Kenyan Exports

China has finalized a deal eliminating tariffs on a range of Kenyan agricultural exports, including tea, coffee, avocados, and macadamia nuts, in a move set to boost Kenya’s trade earnings and market reach. The agreement, concluded in 2025, removes tariffs averaging 10%, making Kenyan produce more competitive in the Chinese market. It also supports value addition through partnerships in Export Processing Zones (EPZs) and logistics collaboration. The breakthrough comes as Kenya diversifies away from the U.S., where AGOA-related tariffs were recently reinstated on select goods. The government has urged exporters to scale production and improve quality to seize this new opening — and balance the delicate dance of global trade between Beijing and Washington.

Kenyan Investors Eye Italy’s Open Doors
Kenyan investors are increasingly turning to Italy for diversification, drawn by its simplified Investor Visa (Golden Visa) and transparent crypto regulations under the EU’s Markets in Crypto-Assets (MiCAR) framework. The visa grants residency for investments starting from €250,000 in startups to €2 million in government bonds, renewable after two years and extendable to family. Italy also offers a €200,000 annual flat tax for wealthy residents and a pathway to citizenship after 10 years. Meanwhile, Italy’s evolving crypto regime — with a 26% capital gains tax rising to 33% in 2026 — signals a maturing digital economy. Strengthening ties were spotlighted during the “Italy Meets Kenya” forum hosted by KNCCI, with Rome targeting Kenyan investments in leather, green tech, and microelectronics as the two nations deepen trade cooperation.

Legal Battle over Duty-Free Rice Imports Caps Market Flooding to Protect Farmers

In a significant legal challenge, local rice trader Frankline Ojiambo sued the Kenyan government over a July 28, 2025 Gazette Notice authorizing the duty-free importation of 500,000 tonnes of rice. Ojiambo argued that the government failed to consult key stakeholders, including rice farmers and traders, unfairly favoring the state-owned Kenya National Trading Corporation (KNTC), the designated importer. He warned the imports would flood the market with cheap rice, destabilizing prices and undermining local production, risking long-term food insecurity. The government defended the move as necessary to address a projected national rice deficit, with local production meeting only 20% of demand, and cited support from the Agriculture and Food Authority (AFA). The High Court partially suspended the import notice in August 2025, capping imports at 250,000 tonnes until October 31 and shortening the import window. The court emphasized balancing consumer needs with protecting local farmers and ordered ongoing monitoring of stock levels and prices, with a full hearing pending

Expansion of Nairobi–Nakuru–Mau Summit Highway

 President William Ruto announced plans to extend the Nairobi–Nakuru–Mau Summit Highway beyond Mau Summit to cover western counties including Kericho, Kisumu, Uasin Gishu, and Busia. The expansion will start in November 2025, featuring a four-lane dual carriageway from Nairobi to Naivasha via Mai Mahiu, with a major interchange at Naivasha, and a six-lane dual carriageway from Naivasha to Nakuru. Ruto emphasized that the Public-Private Partnership (PPP) model is essential for financing such large infrastructure projects without burdening the national budget. He called on MPs to expedite legislation on the Infrastructure Bond to facilitate funding. The project aims at decongesting the Nairobi–Nakuru corridor, reducing travel time, boosting regional trade, and modernizing transport infrastructure. The National Treasury and Kenya National Highways Authority (KeNHA) have approved construction plans, with oversight by KeNHA.

Konza Technopolis Phase One Officially Launched
 President William Ruto has officially commissioned Phase 1 of the Konza Technopolis infrastructure project, marking a milestone in Kenya’s smart city ambitions. The phase, unveiled on October 13, 2025, delivers key systems including smart roads, ICT conduits, automated waste management, modern drainage, a power substation, and essential civic services like police and fire stations. Positioned under Vision 2030, Konza aims to cement Kenya’s status as an innovation-driven tech hub and attract global investment into ICT, research, and green urban development.

Two Rivers SEZ Granted National Status

The Two Rivers International Finance and Innovation Centre (TRIFIC) has been elevated to national Special Economic Zone status, letting it bypass Nairobi County in all planning approvals. The 64-acre project—wholly owned by Centum Investment—will now work directly with the Ministry of Lands, a shift meant to cut red tape and attract foreign capital. Classified as a strategic national project under Section 69(4) of the Physical and Land Use Planning Act 2019, the change is expected to accelerate new office, tech-park, and logistics developments. Supporters call it a boost for investor confidence; critics warn that sidelining county oversight could weaken local accountability.

Kenya in Talks to Settle Sh7.3B Adani Power Deal Fallout

Kenya is negotiating a compensation settlement with India’s Adani Group following the verbal cancellation of a Sh96 billion electricity transmission PPP signed in 2024. The deal, between KETRACO and Adani Energy Solutions, was halted after Adani founder Gautam Adani faced bribery and fraud charges in the U.S. Rather than issue a formal termination — which could attract claims exceeding Sh5 billion — Kenya is pursuing a mutual separation agreement to limit liability. Sources estimate potential exposure at up to Sh7.3 billion. The Treasury’s PPP Directorate is leading the talks as part of efforts to avert further fiscal damage from stalled projects, amid broader scrutiny of transparency in large-scale energy contracts.

Centum Wins Vipingo Land Case
A Kenyan court has ruled in favor of Centum Investment Company’s subsidiary, Vipingo Development PLC, in a long-running land dispute with residents of Vipingo, Kilifi County. In a judgment delivered on October 22, 2025, the court declared that Vipingo Development holds valid titles to three parcels of land, nullifying ownership documents held by residents and a local community-based organization. The ruling settles a high-profile coastal land conflict and affirms Centum’s legal claim over the contested property.

KCB Faces KES 1.3B Property Suit
A dispute before the Environment and Land Court pits M’Big Ltd against KCB Bank Kenya and the Kenya Railways Corporation over a KES 95 million land sale in Naivasha that collapsed after auction. M’Big claims KRC unlawfully withheld transfer consent while KCB ignored unpaid land rates before selling the property, frustrating completion of the 2017 deal. The firm now seeks refunds, damages, and over KES 1 billion in lost business tied to distributorship contracts, while KCB insists it acted lawfully and that no fresh consent from KRC was needed. The court will determine whether the matter belongs before the ELC or the High Court’s Commercial Division.

City Hall Targets Land Rate Defaulters

The Nairobi City County Government plans to auction about 200,000 properties to recover KES 54 billion in unpaid land rates, after repeated warnings and a final grace period lapsed. Officials say legal proceedings are underway to secure court approval for the auctions, describing the move as a last resort to boost revenue collection. Only 60,000 of Nairobi’s 250,000 property owners are reportedly compliant, with payments now channelled through e-Citizen, the County Epayments App, or USSD *235#. Defaulters face penalties — and potential loss of property through public sale.

Steel Firms Fined for Collusion
The Competition Tribunal has upheld the Competition Authority of Kenya’s KES 287.9 million fine against seven steel manufacturers for colluding to fix prices and restrict imports. The firms — including Corrugated Sheets Ltd., Tononoka Rolling Mills Ltd., Devki Steel Mills Ltd., Jumbo Steel Mills Ltd., Accurate Steel Mills Ltd., Nail and Steel Products Ltd., and Blue Nile Wire Products Ltd. — lost their appeals filed between July and September 2025. The Tribunal found evidence of coordinated price adjustments and import restrictions that inflated construction costs nationwide, reinforcing CAK’s tough stance against cartel behaviour in Kenya’s manufacturing sector.

COMESA Issues Airline Compensation GuidanceThe COMESA Competition Commission (CCC) has issued a guidance letter to airlines operating across its 21 member states following a surge in consumer complaints over cancellations, delays, overbooking, and lost baggage. The advisory proposes passenger compensation ranging from $250 (KES 32,300) to $600 (KES 77,500) depending on flight duration, with re-routing deductions permitted. Compensation must be offered in the original payment method — not vouchers — though airlines can avoid liability if cancellations arise from unavoidable extraordinary circumstances. While non-binding, the guidance sets a new benchmark for airline accountability in the COMESA region.

DTB Cleared to Auction Tuskys Property Over KES 320M Debt

The High Court in Mombasa has ruled in favor of Diamond Trust Bank (DTB), allowing it to auction a 2.49-acre commercial property in Athi River formerly owned by the collapsed retailer Tuskys to recover a KES 320 million loan. The ruling rejected an appeal by guarantors Peter Thuo and Nelly Ngonyo Kamau, who had sought to settle the debt in small monthly installments. The court reaffirmed that secured creditors retain the right to sell charged assets even during liquidation, absent fraud or bad faith. Tuskys, once among Kenya’s largest supermarket chains, was ordered into liquidation in 2023, owing KES 20 billion against assets of about KES 6 billion.

Court Orders Lloyd Masika to Disclose Finances in Ongoing Debt Recovery Saga

The Kenya High Court ordered Lloyd Masika, a property management firm, to disclose its financial records to Stanbic Bank as part of enforcing a debt award. This follows a ruling that Lloyd Masika negligently submitted inflated property valuations causing the bank to suffer a loan loss of over Ksh 40 million. Previous arbitration and court decisions upheld Stanbic’s claim, rejecting Lloyd Masika's efforts to set aside the award or delay enforcement. The October 16, 2025 order requires the firm to produce audited accounts, bank statements, and property titles, dismissing objections that disclosure violated rights or was vexatious. The court left open the possibility of cross-examining Lloyd Masika’s directors, potentially exposing their personal assets to recovery measures.

Boost for Financial Compliance as Four African Countries Leave FATF Grey List

South Africa, Nigeria, Mozambique, and Burkina Faso were removed from the Financial Action Task Force's (FATF) "grey list" on October 24, 2025, following demonstrated progress in anti-money laundering (AML) and counter-terrorism financing (CTF) measures. South Africa completed a 22-point action plan improving detection and enforcement. Nigeria enhanced inter-agency cooperation and transparency. Mozambique strengthened financial intelligence sharing, and Burkina Faso improved oversight of financial institutions. The delisting boosts investor confidence, reduces compliance costs, and facilitates economic growth, though ongoing vigilance remains essential. Nigeria and South Africa will undergo a 12-month post-observation period to ensure sustainability of reforms.

Property Agents Face AML Fines
Property agencies in Kenya face a daily fine of Sh10,000 for failing to register with the Financial Reporting Centre (FRC) by the November 14, 2025 deadline. This is part of a government crackdown on money laundering in real estate. All real estate agencies must register through the goAML online platform, submitting details like business registration, KRA PIN, and appointing a Money Laundering Reporting Officer. Non-compliance can also trigger one-time institutional fines of up to Sh25 million and individual fines up to Sh5 million. The FRC offers technical support during registration and mandates ongoing reporting to enhance transparency and combat financial crimes in the property sector

Interpol Flags Crypto-Terror Financing Network
Interpol and Afripol have flagged 14 suspects in Kenya for allegedly financing terrorism using virtual assets, including cryptocurrency. By October 22, authorities arrested four of these suspects after uncovering a money-laundering scheme worth around $430,000 (Ksh 55.5 million) linked to a virtual asset service provider. Two others were arrested for recruiting youths to terrorist groups, with funds traced through a crypto platform to Tanzania. As part of Operation Catalyst, six African countries, including Kenya, worked with Interpol and Afripol, resulting in 83 arrests and identifying 160 persons of interest. This crackdown follows Kenya’s new Virtual Asset Service Providers (VASPs) Act, signed by President William Ruto in October 2025, which sets a dual regulatory framework with the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) licensing crypto operators. The IMF notes increased crypto use by Kenyan firms amid dollar shortages, though the virtual asset’s anonymity poses risks. The operation also exposed a massive Ponzi scheme defrauding over 100,000 victims across 17 countries, losing $562 million, with some funds linked to terrorism financing.

Until next week, Briefers — stay informed, stay strategic, and stay ahead of the brief.
— The Waswa Brief | Valarie Waswa & Co. Advocates

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