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Author: Ronald Owili

  • California leads lawsuit to block Paramount Warner Bros mega merger

    California leads lawsuit to block Paramount Warner Bros mega merger

    A lawsuit has been filed by 12 states, led by California, where Paramount and Warner Bros keep their headquarters and production studios.

    California Attorney General Rob Bonta claimed the merger would end up harming “audiences on every sofa and movie theater seat in the US”.

    If it goes ahead, the new company would account for over a quarter of major film releases. Together with Disney, Universal, and Sony, just four conglomerates would control 86% percent of that market.

    US news website Semafor reported that David Ellison, the controlling owner and chief executive of Paramount Skydance and son of tech billionaire Larry Ellison, has been urged by advisers to move the company’s operations out of California. Paramount has been based in the state for more than 100 years.

    Bonta told BBC World Service that he was aware of the report, adding: “I heard that as an explicit statement”.

    “I’ll even say it felt like a threat last night, and it felt like a last-ditch effort to blackmail the regulators into allowing an illegal deal to go through,” Bonta said.

    “It didn’t work. It won’t work. It doesn’t work.”

    The BBC has contacted Paramount for comment on whether it is considering shifting the company out of the state.

    Combining Paramount and Warner Bros would end a century of fierce rivalry between two of Hollywood’s biggest hitmakers.

    Between them, they own legendary franchises like Harry Potter, Batman, Mission: Impossible, and Top Gun, alongside TV giants like CNN, MTV, and Nickelodeon.

    The regulatory challenge marks a significant hurdle for the entertainment giants as they attempt to merge operations.

    In June, the US Department of Justice had approved the merger.

    But the coalition of attorney generals has requested that the companies halt the transaction pending judicial review, threatening a temporary restraining order if they do not comply.

    If approved, the combined titan would control nearly a third of the US theatrical motion picture market and basic cable programming.

    Bonta claimed it “would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the US”.

    The legal challenge focuses on three main areas: major cinema releases, massive blockbusters, and cable TV channels.

    The states argue that losing this competition strips movie theaters and television networks of vital bargaining power. At present, if one studio demands unfair prices, a distributor can walk away and deal with the rival.

    Without that option, the lawsuit argues that theaters and TV networks will face higher fees – costs that will eventually hit consumers through pricier tickets, high cable bills, and fewer choices.

    “Nothing justifies these substantial harms to competition,” the lawsuit states.

    However, supporters of the deal point out that the traditional media world is in crisis.

    Cable TV audiences are shrinking rapidly, and cinema attendance faces intense, ongoing pressure from tech giants and streaming platforms, making scale an economic necessity.

    In a statement, Paramount described the lawsuit as “fundamentally flawed” and “wrong,” adding that it would “vigorously defend the transaction”.

    It added: “Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”

  • TikTok unveils plans to tackle AI-generated spam in Sub-Saharan Africa

    TikTok unveils plans to tackle AI-generated spam in Sub-Saharan Africa

    Kenya is among the first countries in Africa where short video platform, TikTok has unveiled an in-app Artificial Intelligence (AI) literacy hub as it seeks to eliminate AI-generated spam on the platform.

    TikTok says the AI literacy hub will provide accessible educational resources that help people recognise AI-generated content and better understand how AI tools are being used on the platform.

    According to the social media giant, this is part of a wider initiative it is undertaking to strengthen AI literacy, improve transparency around AI-generated content and enhance protection against AI-generated spam.

    “We believe people should have context, confidence and control over their experiences with AI on TikTok. We continue to invest in technologies, partnerships and educational resources that help people spot AI-generated content, understand how its created, and use these tools creatively and responsibly,” said Tom Varghese, AI Lead for TikTok Global Public Policy team.

    TikTok says it is also investing in advanced detection systems to identify accounts dedicated to posting AI-generated spam.

    In the first quarter of 2026 alone, TikTok says it removed more than 86 million fake accounts globally supported by its strong detection capabilities.

    Additionally, the platform has labelled at least 3 billion AI generated videos posted to help users identify the content.
    TikTok further says it has committed more than $4 million to its AI Literacy Fund to date.

  • Oil prices rise as US and Iran trade fire over Strait of Hormuz

    Oil prices rise as US and Iran trade fire over Strait of Hormuz

    The US launched a new attack on Iran on Sunday evening, continuing days of strikes between the two countries. Iranian state media reported that the strikes killed one person in southwestern Iran, while four were injured.

    Within hours of the fresh US strikes, Iran’s Islamic Revolutionary Guard Corps (IRGC) said it had struck US military bases in Kuwait, Jordan and Bahrain.

    The escalating attacks, which cast doubt over the future of the interim US-Iran agreement signed in June, come amid conflicting claims over whether the Strait of Hormuz is open.

    Iran says it has closed the key waterway until further notice, while the US insists it is open.

    On Sunday evening, Centcom announced another round of strikes against Iran, which it said started at 17:00 ET (22:00 BST).

    Dozens of Iranian military targets, including air-defence systems, coastal radar sites, and missile and drone capabilities were struck, it said later.

    US forces were “prepared to ensure that freedom of navigation remains available to commercial shipping despite Iran’s continued unwarranted aggression, harassment, threats, and arbitrary declarations,” Centcom said.

    Minutes before the initial Centcom announcement, Iranian state TV reported explosions in Sirik, Qeshm, Bandar Abbas and Jask.

    “Following the attack of the American enemy on Monday morning… one person was martyred and four others were injured,” IRNA reported, citing the deputy governor for security and law enforcement in Khuzestan province, Valiollah Hayati.

    Oil prices jumped on Monday in Asia. Brent crude was up by 4.3% at $79.26 (£59.22) a barrel, while US-traded oil also rose by 4.3% to $74.50.

    Energy prices on global wholesale markets have swung wildly in recent months as traders reacted to developments in the conflict.

    Shortly after the US and Israel attacked Iran on 28 February Tehran effectively closed the Strait of Hormuz, through which around 20% of the world’s oil and liquefied natural gas (LNG) usually passes.

    Despite the latest gains, prices are well below the more than $120 a barrel mark Brent reached at the end of April.

    The new wave of US strikes on Sunday evening, came after US forces hit 140 Iranian military targets, Centcom said on Saturday evening.

    Iran’s Islamic Revolutionary Guard Corps (IRGC) responded to those strikes with wide-ranging attacks on US bases and allies across the region, marking an escalation in the scale of hostilities.

    Among those targeted by Iran were Qatar, a mediator in ceasefire talks which had not been attacked since April, and the UAE, which had not been attacked since May. The BBC has approached US Central Command (Centcom) for comment on an attack in Jordan.

    The renewed fire has put in jeopardy an interim ceasefire agreement signed last month, which aimed to reopen the strait and eventually bring a permanent end to the conflict.

    Earlier this week, US President Donald Trump declared the Iranian attacks meant the ceasefire was over, while Iran’s Foreign Minister Abbas Araghchi accused the US of violating the deal.

    However, Trump said talks would still continue and mediators were trying to revive the process.

    On Sunday, US Central Command insisted the Strait was open, warning the US military was in position to make sure it stayed free-flowing.

  • Parliament probes diversion of imported industrial sugar

    Parliament probes diversion of imported industrial sugar

    A parliamentary committee has launched investigations into allegations that imported raw industrial sugar deemed unfit for direct human consumption may have been repackaged and sold to unsuspecting consumers.

    The National Assembly Committee on Trade, Industry and Cooperatives, led by chairman Bernard Shinali, visited Kibos Sugar and Allied Industries and its subsidiary refinery in Kisumu as part of a fact-finding mission tracing consignments of imported raw industrial sugar from the Port of Mombasa to Kisumu amid growing public concern over its intended use.

    The lawmakers’ visit comes days after a similar inspection at the company’s Mombasa operations, where they sought to establish whether the imported sugar was being processed in accordance with regulations or finding its way into the retail market.

    Speaking after the inspection, Shinali said the committee had established that the sugar was imported through the Port of Mombasa and transported to Kisumu for refining into industrial sugar used by manufacturers.

    “We found stocks of raw sugar at the port and were informed by the agencies responsible for clearing the consignment that it was destined for Kisumu. Some of it was moved by rail through inland container depots before being brought here for processing,” he said.

    The committee inspected stocks at the refinery and observed ongoing test runs on processing equipment.

    Shinali maintained that the sugar in its imported form was not fit for direct human consumption and could pose health risks if sold to consumers without undergoing the required refining process.

    “The raw sugar is not fit for human consumption in the form it is currently in. It must be refined into industrial sugar. If it reached the market in its current state, it would be harmful,” he said.

    He noted that the committee had requested importation permits, customs records, health certificates and other regulatory documents to establish whether all legal procedures were followed and whether sufficient safeguards existed to prevent diversion into the consumer market.

    The committee is working alongside a multi-agency team comprising the Kenya Sugar Board, Kenya Revenue Authority, Kenya Bureau of Standards, security agencies and other government institutions tasked with monitoring the movement and processing of the sugar.

    Shinali said the lawmakers were yet to make a conclusive determination on whether any of the sugar had leaked into the market, adding that investigations were still ongoing.

    “That is why we are here. We are concerned and want to ensure all safety measures are in place so that the sugar is properly refined and does not enter the market in its current form,” he said.

    The committee also raised concerns about gaps in the legal framework governing industrial sugar imports, warning that weak regulation could create opportunities for abuse.

    “Worryingly, we do not have adequate legislation around the importation of industrial sugar. We must establish what safeguards exist to ensure sugar imported for industrial use does not end up on consumers’ tables,” Shinali said.

    The probe has also reignited concerns among farmers in sugar-growing regions over the impact of imports on local production.

    However, Shinali noted that Kenya still lacks sufficient quantities of sugar suitable for industrial use, forcing manufacturers to rely partly on imports.

    Attempts by members of the committee to carry samples of the raw industrial sugar and packaged industrial sugar found at the factory were thwarted by the management who insisted that the refined sugar had not been certified by all the relevant government agencies.

    Kibos Sugar and Allied Industries Chairman Raju Chatthe dismissed allegations that the company was repackaging imported raw sugar and selling it directly to consumers.

    Raju told the committee that the imported consignment was intended solely for refining into industrial sugar used by beverage, food processing and other manufacturing industries.

    He said the company was operating fully within the law and urged leaders not to politicize the investment.

    “This project is a major industrial investment and should not be politicized. We have complied with all legal and regulatory requirements governing the importation and processing of industrial sugar,” he said.

    He described the Kisumu-based refinery as the only dedicated industrial sugar refinery in the East African region and said it was still undergoing commissioning and test runs.

    According to Raju, no sugar from the refinery had been released into the market.

    “The refinery is currently undergoing test runs and machine calibration. No product from this facility has been released for sale,” he said.

    He added that the company had brought on board all relevant government agencies to ensure full compliance with customs, health, food safety and quality standards.

    Raju said the firm welcomed scrutiny from both Parliament and regulators, insisting that the imported sugar was being processed strictly in accordance with approved procedures.

    “We are not a roadside factory neither are we operating outside the confines of the law,” he said.

    The committee is expected to retreat to Nairobi to review documents and evidence gathered during the inspections before compiling a report to be tabled in Parliament.

    Kibos Sugar Management is also expected to be summoned to the National Assembly by the committee to address pending issues in the probe.

    The findings are likely to shape future regulation of industrial sugar imports and determine whether any breaches occurred in the handling of the controversial consignment.

  • Kenya’s New Climate Regulations: What Developers and Investors Need to Know

    Kenya’s New Climate Regulations: What Developers and Investors Need to Know

    In the recent past, climate investment discussions in Kenya have largely centred on the domestic generation of carbon credits geared towards sale in the global carbon markets. However, the country’s new Climate Change (Non-Market Approaches) Regulations, 2026 point to a broader shift in how climate action is being approached, moving beyond carbon-credit generation and introducing a new set of considerations for developers, investors and sustainability-focused organisations.

    Gazetted in February 2026, the Regulations operationalise Article 6.8 of the Paris Agreement, creating a formal framework for non-market approaches (NMAs). These are climate initiatives that contribute to mitigation, adaptation and sustainable development without relying on the creation or trading of carbon credits. The framework is supported by the establishment of a national platform through which projects are submitted, assessed and tracked, reinforcing the formalisation of these activities within Kenya’s climate regime.

    For organisations already active in areas such as renewable energy, climate-smart agriculture, ecosystem restoration, clean cooking and sustainable waste management, this is more than just another policy development. The Regulations introduce a compliance framework that could apply to projects that have, until now, largely sat outside the carbon market ecosystem. In practice, this means organisations may need to reassess how existing or pipeline projects are structured to ensure they fall within the new regulatory parameters.

    One of the more notable shifts is the introduction of a formal approval process. Project proponents must seek authorisation from Kenya’s Climate Change Directorate and demonstrate how their initiatives align with national climate priorities and broader sustainable development goals.

    For initiatives looking to be recognised internationally within the wider Article 6.8 framework, expectations extend further. Factors such as scalability, multi-stakeholder collaboration and the ability to attract international support are all likely to shape how projects are assessed.

    What this means in practice is that regulatory considerations can’t really be treated as a late-stage exercise anymore.

    Developers and investors will need to factor in governance structures, stakeholder engagement and compliance requirements much earlier, alongside technical and financial planning. Early legal and governance input can play an important role here in helping to identify risks upfront, avoid delays in the approval process and ensure that projects are structured with long-term compliance in mind.

    The Regulations also place stronger emphasis on community participation. Projects involving public land will need to show clear evidence of public participation. Where community land is involved, project proponents are required to obtain free, prior and informed consent (FPIC), ensuring that affected communities have a genuine opportunity to understand proposed activities, consider potential impacts and take part in decision-making.

    These obligations are reinforced by existing requirements under Kenya’s Community Land Act. Investment agreements involving community land must secure approval from at least two-thirds of adult community members through a properly convened assembly. While this strengthens protections for communities, it also brings practical considerations around project timelines, consultation processes and stakeholder management into sharper focus, particularly where alignment across large or dispersed communities is required.

    Compliance doesn’t stop once approval is granted. Proponents are required to submit annual progress reports throughout the lifespan of a project, creating an ongoing obligation around monitoring, governance and accountability. For many organisations, this will mean putting in place more robust internal systems to track progress and meet reporting requirements over time, rather than treating reporting as an administrative afterthought.

    While the new framework introduces additional responsibilities, it also opens up some important opportunities. By providing greater regulatory clarity for non-market approaches, Kenya is creating a recognised pathway for climate initiatives that prioritise resilience, adaptation and sustainable development alongside emissions reduction. That kind of certainty can go a long way in building investor confidence and strengthening the long-term viability of projects seeking international partnerships and support.

    More broadly, the Regulations point to where climate action in Kenya is heading. As the country expands its policy toolkit beyond carbon markets, organisations that engage early, invest in strong governance structures and prioritise community participation are likely to be better placed to navigate what’s coming, and to access emerging opportunities linked to international climate cooperation.

    For developers and investors, the opportunity isn’t just about compliance. It’s about building climate projects that are more transparent, resilient and genuinely aligned with the long-term expectations of regulators, communities and funding partners alike, while taking practical steps now to ensure those projects are fit for an increasingly structured regulatory environment.

    Clarice Wambua, Consultant and Nicole Gacheche, Associate in the Environmental Law Practice at Cliffe Dekker Hofmeyr (CDH) Kenya.

    DISCLAIMER: Opinions expressed in this article do not necessarily reflect those of the Corporation.

  • Japan raises interest rate to highest since 1995

    Japan raises interest rate to highest since 1995

    Japan’s central bank has increased its main interest rate to a new 31-year high after a surge in global energy prices.

    On Tuesday, the Bank of Japan (BOJ) raised its so-called policy rate to 1% from 0.75% – a level not seen since 1995.

    The decision comes as some other central banks have raised interest rates this year as the US-Israel war with Iran pushed up the cost of living.

    Japan’s interest rates were cut aggressively in the 1990s to combat the fallout from a collapse in prices of assets like property and shares. They had been near zero for two decades as prices fell and growth stagnated.

    The bank has been gradually raising its interest rate since March 2024 – at the time it was the country’s first hike in 17 years.

    “After twenty years of deflation, Japan is now in an inflationary upcycle,” Japan economist Jesper Koll told the BBC.

    “Emergency/crisis management monetary policy is no longer needed and the BOJ wants to get back to a normal monetary policy,” he added.

    The BOJ has been under pressure to cool inflation, which was extremely low in the country until relatively recently.

    Higher energy prices have fuelled inflation, adding pressure on countries like Japan that depend heavily on oil and gas from the Middle East.

    Japan’s wholesale prices climbed by more than 6% in May from a year earlier, rising at the fastest pace in three years.

    But the country’s overall inflation rate, which was 1.4% in April, currently sits below the BOJ’s target level of 2%.

    The risk of Japan’s economy deteriorating sharply due to the Iran war is less likely beacause of government measures including easing the impact on households from high fuel costs, the bank said on Tuesday.

    But it added: “Taking into account that medium- and long-term inflation expectations have also continued to increase, there is a risk of underlying inflation deviating above our price target.”

    The BOJ faces a tricky trade-off: Raising interest rates could help lower inflation but higher rates also make borrowing costlier, increasing expenses for the government and businesses.

    The bank’s governor Kazuo Ueda – a central figure in deciding interest rates – missed this week’s meeting due to being in hospital as he is treated for an infected liver cyst.

    But, along with other BOJ policymakers, he has expressed an increasingly positive stance on raising rates in recent months.

    “Even if the situation remains unclear, should it be judged that upside risks to prices outweigh downside risks to economic activity, it will be necessary to thoroughly discuss the pros and cons of raising the policy interest rate,” Ueda earlier this month.

    Prime Minister Sanae Takaichi, known for her support of boosting spending in the country, has previously dismissed the idea of hiking interest rates, though she is under pressure to bring down Japan’s inflation.

    However, she has not publicly criticised the BOJ’s push for higher rates since taking office last year.

    The latest rate rise is the second since Takaichi took office, and had been expected since the BOJ raised its policy rate to “around 0.75%” in December.

    The decision to raise rates also comes as the bank aims to stabilise the yen, which has come under pressure from other major currencies like the US dollar and the euro.

    “There has been a sense that the yen is too cheap and that raising its currency will not hurt,” said University of California San Diego business professor Ulrike Schaede.

    Even with the hike, Japan’s interest rate remains low compared to other big economies.

    The US and UK, for example, currently have interest rates of above 3%, although both central banks are expected to keep their rates on hold when they meet this week.

    Meanwhile, the Reserve Bank of Australia held rates at 4.35% on Tuesday but said it may hike again if needed to control inflation.

    But what we are seeing could signal “a slow global realignment,” Schaede said.

  • AFC pumps $600M into Dangote’s fertiliser firm

    AFC pumps $600M into Dangote’s fertiliser firm

    Dangote Group has received a major boost for its $7 billion (Kh 903b) fertiliser expansion programme targeting Nigeria and Ethiopia after securing a loan from the Africa Finance Corporation (AFC).

    The firm has secured $600 million (Ksh 77b) facility from the AFC which will support its fertiliser holding company, Greenview Fertiliser Corp.

    The fertiliser expansion programme which will be undertaken by Greenview is projected to help to triple production capacity in Nigeria and establish a major new manufacturing platform in Ethiopia.

    “Expanding our fertiliser production capacity in Nigeria and developing a new plant in Ethiopia will strengthen Africa’s food security, support agricultural productivity, and deepen the continent’s industrial base. AFC has consistently supported Dangote Group at critical stages of our growth, and its renewed commitment reflects confidence in our vision to build globally competitive African industrial platforms,” said Aliko Dangote, President Dangote Industries Limited.

    The firm expects the expansion programme to increase urea fertiliser production capacity in Nigeria from 3 million metric tonnes annually to 9 metric tonnes.

    The financing will also help Greenview add new urea fertiliser plant in Ethiopia with a capacity of 3 million metric tonnes per year.

    This is expected to strengthen regional food security, support agricultural productivity, reduce dependence on imported fertilizer and bolster the continent’s position as a supplier to international markets.

    “Closing this productivity gap is essential to Africa’s food security. By supporting the development of the world’s largest fertiliser platform, AFC is helping build the foundation for Africa to feed itself, create productive jobs and strengthen our economic sovereignty. This is not just an investment in fertilizer production. It is evidence of the Africa we are building,” added Samaila Zubairu, President AFC.

    The investment is expected to increase the continent’s urea production capacity which is currently estimated at 6 million metric tonnes annually.

  • Car dealers fault NTSA for number plate changes

    Car dealers fault NTSA for number plate changes

    Car dealers in Mombasa have protested recent changes to the National Transport and Safety Authority (NTSA) system and the enforcement of regulations governing Dealer Registration (KD) number plates.

    According to Independent Car Dealers Association, the measures have disrupted operations and hurt businesses across the sector.

    The association is now calling for a consultative meeting with the NTSA to resolve the standoff over the issuance of KD number plates and recent changes to the authority’s system.

    In a bid to curb the rampant misuse of KD number plates, NTSA in April moved to enforce Section 24 of the Traffic Act, which governs the use of a dealer’s general licence. The move has drawn criticism from dealers, who say it has created operational challenges and disrupted their businesses.

    Section 24 of the Act sets strict rules on the use of KD plates, including prohibiting the carrying of passengers or goods for profit.

    The law also outlines the permissible use of the number plates, including during inspections, tests, examinations and exportation to East African countries, as well as when moving vehicles from a dealer’s premises to those of a purchaser, another dealer or a manufacturer.

    The dealers staged a peaceful protest in Mombasa City, where they complained that the implementation of Section 24 of the Traffic Act and changes to the NTSA system have adversely affected their businesses, which contribute billions of shillings in tax revenue and employ hundreds of youths.

    The Association Chairman Mathew Katili, said they are concerned about how the government intends to achieve its projected revenue in the Ksh 4.8 trillion 2026/2027 budget when certain policies and enforcement measures appear to be undermining business growth and investment.

    Katili said the association is calling for more inclusive regulations for motor vehicle dealerships. He explained that dealers rely on KD plates as a critical logistical tool for moving vehicles from the Port of Mombasa, Container Freight Stations (CFS) and storage yards to showrooms or directly to customers.

    “The requirement that vehicles be fully registered before leaving CFS facilities has significantly slowed down delivery timelines and increased operational costs to the detriment of business,” he stated.

    He affirmed that they support the use of a customs entry number to generate movement registers, but maintained that it should not be tied to a particular importer, since individual importers are not licensed dealers and therefore cannot access the NTSA portal to generate movement permits.

    “Making the matching of customs entry number and dealer’s details a mandatory condition creates unnecessary procedural rigidity, which further delays vehicle release and delivery, especially in cases involving imported vehicles that have already been duly registered in customers’ names,” he added.

    On his part, Jacob Mutinda lamented that despite being licensed by NTSA as a car dealer and having paid all the requisite fees, the authority abruptly changed its system in April by requiring a customs import entry when applying for a driver’s movement registry.

    “The system says the import entry is for an importer. When you have brought your car and have been allocated a number, you can’t use the KD plate for transportation to Nairobi or anywhere because you don’t have a dealer’s licence,” he decried.

    Issac Omollo said they are being apprehended by traffic police officers despite having paid for KD number plates, and called for the restoration of the previous system.

    The Association Vice Chairperson, Joseph Kamiti, said the NTSA move has hurt their businesses, affecting both their families’ well-being and their clients.

  • UK and Japan agree £18bn investment deal

    UK and Japan agree £18bn investment deal

    The UK and Japan have agreed a multi-billion pound investment deal which UK Prime Minister Sir Keir Starmer said will build a “new era of co-operation” between the two nations.

    Japanese firms will spend more than £9bn on UK infrastructure and financial services and up to £9bn on UK offshore wind, creating tens of thousands of jobs, Downing Street said as the PM met his Japanese counterpart Sanae Takaichi in London.

    The deal comes as the UK’s economy struggles to grow, with experts predicting the US-Israel war with Iran will hit the UK particularly hard.

    It is not clear how much of the investment listed by Downing Street represents new money or previously announced plans.

    Sir Keir and Takaichi met Japanese business leaders at Downing Street on Sunday, with Starmer describing the talks as “very productive”.

    Separately, Sir Keir said he was “really pleased” the two countries had reaffirmed their commitment to the Gcap fighter jet programme being developed alongside Italy.

    Meanwhile, it was announced Rolls-Royce would work with Japan’s Atomic Energy Agency to develop next generation nuclear technologies and a technology agreement would link up UK research and development and software expertise with Japanese manufacturing.

    Speaking through a translator, Japan’s prime minister said the UK is “an extremely important partner”.

    Mitsubishi Estate, Mitsui Fudosan, Nomura Real Estate were some of the Japanese firms which Downing Street said had agreed to spend billions over the next five years on infrastructure and real estate projects.

    The Conservative’s shadow business and trade secretary Andrew Griffith said his party welcomed “any deal that brings investment” to the UK.

    However, he added that Labours “tax hikes and employer red tape are doing huge damage, destroying jobs and putting more and more people onto welfare”.

    Though Downing Street has said the deal will boost jobs and long-term growth, experts expect economic pain in the near term.

    The UK economy grew by 0.6% during the first three months of the year – the fastest growth of any G7 economy – but analysts think growth will be sluggish in the months ahead.

    The US-Israel with Iran war will hit the UK the hardest of the world’s advanced economies, the International Monetary Fund (IMF) said last month.

    But the IMF expect the UK to recover, to again become the fastest growing European economy next year in the smaller G7 group of advanced economies, albeit at a slightly slower rate of growth of 1.3%.

  • Experts warn against heavy domestic borrowing to fund budget

    Experts warn against heavy domestic borrowing to fund budget

    Proposals by the National Treasury to cover 90pc of the Ksh 1.15 trillion projected budget deficit in the next financial year from domestics sources could be counterproductive to the country’s growth plans, experts have warned.

    In the Budget Statement presented by National Treasury and Economic Planning Cabinet Secretary John Mbadi on Thursday, the government plans to borrow Ksh 1.03 trillion from domestic sources to plug the budget hole with the remainder at Ksh 116.2 billion being from net foreign financing.

    This will complement Ksh 3.6 trillion revenue and Ksh 43.6 billion grants expected to fund the Ksh 4.8 trillion budget for the 2026/27 fiscal year.

    However, according to PwC Kenya, the decision could have negative impact on local credit market as well as growth plans.

    “While this funding structure potentially supports foreign exchange stability, it raises concerns about credit access, and affordability, for the private sector, which may further limit economic growth and undermine some of the government’s ambitions, such as the growth of the Micro, Small, and Medium Enterprises (MSMEs) sector,” said the firm in its post-budget analysis.

    In the current financial year, fiscal deficit including grants is projected to rise to KSh 1.199 trillion, equivalent to
    6.4 percent of GDP, from KSh 901 billion in the original budget estimates after additional expenditure of Ksh 368.6 billion in the Supplementary Budget I.

    “The fiscal policy for FY2026/27 and the medium term will be anchored on a growth-supportive consolidation path,
    aligned to the Government’s priorities under the Bottom-Up Economic Transformation Agenda and the Fourth Medium Term Plan,” Mbadi told the National Assembly.

    Treasury further projects fiscal deficit including grants to decline gradually from 5.5 percent of GDP in the FY2026/27 to 3.3pc of GDP in the FY2028/29.

    “These challenges must also be viewed within the broader context of the persistent revenue underperformance noted in previous years, as well as heightened geopolitical risks, both domestically and internationally. While the budget projects marginal improvements of the largely stable macroeconomic indices, key vulnerabilities remain,” said the firm.