A world is supported by four things “… the learning of the wise, the justice of the great, the prayers of the righteous and the valor of the brave.." -Frank Herbert

Agreed that CRR is the more direct and effective tool here. Where interest-rate transmission is weak and excess liquidity is actively feeding FX demand, reserve requirements address the problem at source rather than hoping the policy rate does the heavy lifting. That said, the distinction is not costless. Tightening via higher reserve requirements still drains system liquidity and forces the yield curve to reprice. Because the front end remains anchored by the policy rate, the adjustment concentrates at the longer end—producing a pronounced bear steepener as term premia rise. Banks and other intermediaries do not simply absorb the higher CRR; they pass the opportunity cost through into their marginal cost of funds. Credit pricing therefore moves higher even if the official policy rate does not. The practical result is a growing wedge: the central bank can point to a relatively contained policy rate, while actual funding costs across the curve have already shifted up. That gap is precisely what leaves policymakers behind the curve. Markets and balance sheets respond to the effective cost of liquidity, not the headline rate. CRR does reduce the fiscal cost of sterilising excess liquidity and slows the mechanical creation of money. In that narrow sense it is cleaner than pure open-market operations. It remains, however, a blunt instrument—one that tightens conditions indiscriminately and can still generate the same funding and credit stress that a rate hike would, just through a different channel.

How would you propose the BoU deal with the UGX, which had already traded through 4,200 and was quoted as high as 4,250 before the announcement? The forward curve was already pricing in significantly higher rates, and regardless of the exact size of the move, exchange-rate pass-through into prices and credit costs was already underway. A runaway currency risks de-anchoring inflation expectations. Only a decisive response helps re-anchor the narrative. Longer term, terms of trade need to rebalance, and Uganda’s current-account deficit widening by $1.4 billion to $4.6 billion is not helping. A weaker currency could aid that external adjustment, but it would still be inflationary and would require a higher term premium—which the market was already pricing in. The 225 bp hike was aggressive, but it largely caught up to what the market had already been pricing (around 150 bp) while adding a further insurance premium. Acting early and decisively can reduce the need for even more aggressive hikes later.

It is not a family deciding the dividend is too small. The controlling vehicle is Adenia Capital (IV), a closed-end private equity fund that bought into Tumaini in 2018 and Quickmart in 2019. That is year 7–8 of a hold. These funds are not open-ended. LPs (pensions, DFIs, endowments) commit capital for a fixed life, usually 10 years plus one or two one-year extensions. The GP draws that capital, invests it in the first 4–5 years, then has a harvest window to sell and wire cash back. Two clocks force the exit. DPI (cash actually returned divided by capital paid in) is what LPs use to judge the manager and subscribe to the next fund. Paper gains do not count. IRR starts when the capital is called, so time is the enemy: 3x in 7 years is about 17% a year; the same 3x in 12 years is under 10%. A 6–7% dividend and a slower growth multiple can be a fine hold for a family. It is a poor outcome inside a fund whose hurdle is often 8% and whose carry (typically 20% of profits above that hurdle) only crystallises on a realisation. Borrowing against the shares does not fix that. Debt is not a distribution. LPs are owed cash, the fund cannot easily lever a private stake to pay them, and the LP agreement expects a sale, IPO or secondary by the end of the term. An offer for sale is the standard partial exit: lock in a multiple, hand LPs DPI, and keep a residual (here still ~42.5–50% via Sokoni) for any further upside. The fee point is the weak part of the incentive story. The 1.5–2% management fee is paid whether or not they sell. What they are protecting is carry, the track record, and the next fundraise.

The 1997 election results would be problematic for the incumbent today - as it will force an automatic second round - which will be much harder to won as a 'lame duck' president.

Processing rare earth minerals is one of the most environmentally damaging industrial processes on the planet. China’s experience shows the reality: vast toxic waste ponds, radioactive by-products, heavy-metal contamination of soil and water, and entire regions left scarred for decades. The United States itself has found it extremely difficult to site new rare-earth processing capacity at home precisely because communities refuse to accept those risks. So when the US offers to help Kenya build processing factories for the Mrima Hill deposits, it is not a purely magnanimous gesture. It is a strategic move to lock in critical minerals while shifting the environmental burden offshore.

Aren't the house being sold at market rates? The fund should just be a backstop for where there might be low demand. From what we are seeing in the media- it seems there isn't enough housing to meet the deposits. What are we missing? @DavidNdii

This proposed provision in Kenya’s Finance Bill 2026—imposing a 30% final tax on gross rental income (residential and commercial) for non-resident/diaspora landlords, with zero deductions for repairs, maintenance, insurance, agent fees, mortgage interest, or other expenses—is highly counterproductive. It risks undermining a vital sector rather than supporting it. Here’s why, drawing from official and credible sources 1. Massive Housing Deficit + Low Local Incomes = Reliance on External Capital Kenya faces a housing deficit of over 2 million units, with annual demand of 200,000–250,000 units but supply of only ~50,000. Urbanization (4.4% annually) and population growth exacerbate this, with ~61% of urban households in slums. Local real incomes are too low for most Kenyans to drive large-scale development or absorption, especially in the formal private sector. Diaspora and foreign investment have been essential to bridge the gap through construction, ownership, and rental supply. Taxing this capital punitively at source (gross, no deductions) directly attacks the funding needed for new supply. 2. Already Low Rental Yields + High Effective Tax Burden Rental yields in Kenya are modest and under pressure. Gross yields often range from 4–8% in Nairobi (higher in satellite areas or student housing, lower in prime spots), with net yields frequently 2–6% after costs. Recent data shows averages around 5.5–7.4%, with some segments as low as 2.2% for studios. A 30% gross tax (effective rate on actual profit often >50% after unavoidable expenses) would wipe out or reverse profitability for many leveraged investors. This comes on top of existing costs and capital gains tax on eventual sale. Investors facing negative or razor-thin returns will simply walk away. 3. Real Estate’s Multiplier Effects: Jobs, Taxes, and Construction Activity Property investment has strong upstream and downstream impacts—jobs in construction, materials, professional services (architects, lawyers), and ongoing management/maintenance. It generates auxiliary tax revenue during building and operation far beyond direct rental tax. Discouraging investors reduces this multiplier. Kenya already struggles with slack uptake of both government affordable housing units and private developments. Punitive taxation will worsen oversupply risks in some segments while deterring new builds. 4. Critical Role in Diaspora Remittances and Current Account Stability Diaspora remittances are a major forex earner (often $4+ billion annually recently) and key supporter of Kenya’s current account deficit. Much of this money flows into real estate as a trusted, tangible asset. Taxing property income so harshly signals “don’t invest here,” likely reducing inflows. Remittances help cover import gaps and stabilize reserves; disrupting real estate channels undermines this without easy substitutes. 5. Uncompetitive vs. Alternative Markets Other jurisdictions actively court real estate investment with better incentives, clearer rules, and competitive after-tax yields. Kenya’s combination of moderate gross yields + high gross taxation + illiquidity (real estate is a “stickier” asset than financial markets) makes it far less attractive. Investors have choices—why pick a high-risk, high-tax jurisdiction with ad-hoc policy shifts? 6. Behavioral Impacts: Reduced Investment, Market Distortions, and Capital Flight Risk Non-residents have lower ties and higher mobility—they can easily redirect capital elsewhere or divest. Targeting one investor class (diaspora/non-residents) with punitive rules makes their properties uncompetitive on rents. They may raise prices (hurting tenants) or exit, reducing overall supply. Frequent ad-hoc tax changes on high-ticket, long-horizon assets like property signal high sovereign risk. This chills not just real estate but broader foreign direct investment (FDI). Investors seek predictability; repeated surprises erode confidence.

Mandatory Backdated Compounding Contributions from Day One of SHA: The Foundation for Sustainable Universal Health Coverage SHA is a universal health scheme that can only succeed if all eligible people contribute consistently. Insurance works because healthy individuals pay in steadily to build the pool for when support is needed. From the moment the SHA scheme launched, obligations should have been mandatory for all future claimants of working age. Anyone wanting to access benefits must make mandatory backdated contributions from Day One of the scheme. These contributions should compound at the average national debt interest cost to reflect the opportunity cost and financing burden the scheme has carried on their behalf. Instant or late registration with minimal payment defeats the entire model. It allows people to join only when ill, draining resources funded largely by formal sector deductions. This is not insurance — it is adverse selection that makes the system unsustainable. The reset date must be Day One of SHA. Access to claims should require full compounded back-payments from launch (or from the date of eligibility/age of majority). Healthy citizens must subsidize the pool in advance, not just when they need care. Without mandatory, compounding contributions from the beginning, universal coverage becomes an unfunded promise that burdens taxpayers and risks collapse. This is the discipline required for SHA to work as a true universal scheme.

What happened to the industry? It was the perfect storm: an unsustainable fiscal policy colliding with a collapsing business climate. Let me explain with one product as an example. When we opened Tribeka in August 2011, we sourced beer from distributors at KES 82–89 per bottle. We retailed it at KES 200 Monday to Wednesday, then KES 250 from Reggae Thursday all the way through Sunday. That delivered a 200% gross margin. It was incredibly lucrative. We paid down debt fast, took on new debt for expansion, and opened Natives in November 2012. Then everything started unravelling. The new administration chose to fuel growth with massive debt-financed infrastructure. They pointed to the low tax-to-GDP ratio (distorted by counting these non-cash-generating assets toward GDP) and declared taxation too low. The lowest-hanging fruit? Sin taxes on alcohol. Annual hikes followed, and by 2018 wholesale prices had climbed to KES 180. To protect our old margin we would have needed to sell at KES 540 — but the street price stayed stuck at KES 250. Our gross margin collapsed to just 38% before salaries, rent, taxes or anything else. The tax burden had by then spread across the entire economy. Real incomes stagnated, so people cut household spending to the bone. The era of dropping KES 100k on a table was over. By 2015 we had scaled to 8 venues, 380 permanent staff (550 on weekends counting temps), and $11 million in annual revenue. The cracks were already visible. I hoped the crazy 8%+ deficits were just a pre-election anomaly and that we’d see budget discipline after the vote. Instead, they doubled down. They even indexed alcohol tax hikes to CPI — which was madness, because the inflation was being caused by the very taxes and money printing they were doing. By 2018 we were injecting fresh millions just to cover salaries and rent in some outlets. We were actually relieved when leases expired, even as some landlords tried to muscle us for “goodwill” payments. Minimum wage had jumped from KES 8k to 14k, Tribeka rent had soared from KES 500k to 1.2 million, and we faced an endless parade of extortionate “bureaucracy taxes” and compliance costs. Today purchasing power hasn’t recovered much. The liquor business is nothing like it was. I walked away with heavy losses, but the lessons I learned are worth their weight in gold. No regrets. If I were starting again today, I’d open a Michelin-starred restaurant serving a cozy 50 pax and cater strictly to the 1% — the ones who’ve used the Cantillon effect to suck the country dry through rent-seeking, plus the rich foreigners riding the same wave.

We aren't on the road to Singapore. We're walking India's footsteps. That video is spot-on about India's 'broken' growth: flashy GDP & stock market highs, but jobless growth, youth flooding a shrinking job market, weak manufacturing, education failing the next gen, and AI now threatening the services boom that created India's middle class. Kenya is on the exact same path — only with extra layers of bureaucracy, state capture, exploding inequality, and wealth externalisation draining our future. Sound familiar? • Services-led mirage (our M-Pesa/Silicon Savannah like India's IT/BPO) without enough formal jobs or manufacturing muscle. • Youth bulge entering the workforce yearly, yet unemployment stays high and informal sector dominates. • Debt burden squeezing everything, while inequality widens dramatically — just like India's top 1% hoarding ~40% of wealth. • Bureaucracy & red tape choking SMEs, investment, and entrepreneurship. • State capture by political elites & connected cartels dictating policy for personal gain. • Externalisation of wealth — billions lost yearly to illicit financial flows, corruption, and capital flight siphoned offshore instead of building local jobs & infrastructure (Kenya alone haemorrhaging $1.5B+ annually). In 10 years, will Kenya's headline growth deliver real prosperity for the masses, or echo India's deep cracks — glittering numbers masking elite capture and structural failure? We need a skills revolution, manufacturing revival, ruthless anti-corruption drive, bureaucracy slashing, and policies that stop wealth leakage NOW. Watch & reflect: youtu.be/pB06HIfAC5Y?si=tOO9… Kenya, what must we do differently to break this cycle? #KenyaEconomy #IndiaLessons #EconomicReality