The year 2024 has been marked by significant legislative and policy developments in Kenya, shaping the landscape for the private and public sectors. As we conclude this year, let us revisit the key highlights and milestones that unfolded, with a particular focus on insights covered by Vellum Kenya.

Finance Bill, 2024

The Finance Bill, 2024, introduced revenue-generating measures that sparked intense public debate and triggered nationwide protests, with Gen Z leading the charge, and social media platforms amplifying their message. These measures raised significant concerns across various sectors and among consumers. This included a mixed bag for the alcoholic beverages sector as well as the financial sector. For the first time in Kenya’s history, the president withdrew the Finance Bill, prompting the introduction of legislative supplements to guide government expenditure and a series of new bills proposing alternative revenue-generation strategies. Read more.

EU deforestation protection regulations

The European Union (EU) aimed to enforce the EUDR starting in January 2025, setting December 2024 as the deadline for exporters to acquire the necessary certifications. This is a ban on the importation of commodities like cocoa, palm oil, rubber, soy, coffee, and wood unless traders can prove that their production processes did not contribute to deforestation or forest degradation. Case in point, the EU will only purchase coffee from sellers who can verify that their beans were not grown on land deforested after December 31, 2020. In a recent development, however, the deadline has been extended and these regulations will take effect from January 2026. In an attempt to navigate this, the Kenya Private Sector Alliance (KEPSA) in collaboration with the Ministry of Investments Trade and Industry is on course to establish the Green Supplement, a guide for sustainable practices and promotion of climate resilience in agriculture. Read more.

The digital nomad work permit

This year, President William Ruto launched the Digital Nomad Work Permit, marking a significant policy shift aimed at positioning Kenya as a premier destination for remote workers. This forward-thinking initiative aligns with the global trend of digital nomadism, offering opportunities to diversify the economy, boost tourism, and strengthen Kenya’s tech ecosystem. By targeting professionals who blend work and travel, the permit promises to attract long-term visitors, enhance local businesses, and foster knowledge transfer with Kenya’s budding innovation hubs like Silicon Savannah. However, its success hinges on addressing challenges such as infrastructure, regulatory clarity, and equitable resource distribution. Read more.

The move into fully fledged risk-based lending 

The Central Bank of Kenya’s (CBK) approval for banks to implement risk-based lending marked a shift in Kenya’s financial sector, enabling institutions to price loans based on individual borrowers’ risk profiles. This approach offers the potential to enhance financial inclusion by accommodating previously underserved groups, such as MSMEs and individuals in the informal sector, who were disadvantaged by traditional fixed-rate models. However, the model also presents challenges, particularly the risk of penalising high-risk borrowers with prohibitively high interest rates. Read more.

The university funding model

Kenya’s tertiary education sector underwent a major transformation with the introduction of a new funding model under President Ruto’s administration. The model replaces government block funding with a system combining scholarships, loans, and household contributions. Scholarships are allocated based on financial need, and assessed through a Means Testing Instrument, while fees vary by course, reflecting program costs. The move has faced contention in court and the case on the University Funding Model is set to be determined on December 16th 2024. Read more.

Out with Gachagua, in with Kindiki

For the first time in Kenya’s history, a sitting Deputy President, Rigathi Gachagua, was impeached, marking a dramatic shift in the country’s political landscape. Gachagua’s removal, following allegations of gross misconduct and constitutional violations, underscored the fragility of alliances and the high-stakes manoeuvring within the corridors of power. His ouster, upheld by the Senate despite legal objections, paved the way for President William Ruto to appoint Professor Kithure Kindiki as the new Deputy President. Read more.

The 2024 cabinet reshuffle

President Ruto’s reconstituted Cabinet signalled a strategic attempt to foster political stability and a fresh approach after a challenging start to his administration. By incorporating members from the opposition, Ruto aims to reduce partisan divisions and prioritize national transformation over political rivalry. Despite concerns about the integrity and wealth accumulation of some nominees, the vetting process proceeded with minimal resistance, except for Stella Lang’at, who was rejected for perceived incompetence. Read more.

The IEBC Act of 2024

The ascension to the IEBC (Amendment) Bill, 2024, by President Ruto set to address a core demand of anti-tax protests, marking a pivotal moment in Kenya’s political landscape. The legislation enables the restructuring of the Independent Electoral and Boundaries Commission (IEBC) by establishing a new selection panel to appoint commissioners with at least 10 years of proven expertise, particularly in ICT or accounting, to enhance efficiency. This was the first law enacted based on the National Dialogue Committee’s recommendations, stemming from controversies over the 2022 presidential election. It also introduces provisions for recalling incompetent legislators and mandates post-election operational reviews for greater transparency and accountability. This law was set to pave the way for the hiring of new commissioners and the recall of incompetent legislators. As it stands, the IEBC is still crippled owing to the absence of commissioners. This means the IEBC is unable to perform its key mandates, which include boundary delimitation and by-elections. Read more.

Kenya’s recognition as a non-NATO ally

The United States’ designation of Kenya as a major non-NATO ally underscored the country’s importance as a strategic partner in counterterrorism and security in sub-Saharan Africa. This status is envisioned to enhance military cooperation, including joint exercises, intelligence sharing, and access to advanced military technology, while boosting Kenya’s regional influence and economic opportunities. However, it does not guarantee direct military aid or require Kenya to participate in NATO operations. Read more.

The Kenya-EU economic partnership agreement

The Kenyan National Assembly gave the greenlight on the Kenya-European Union (EU) Economic Partnership Agreement (EPA), marking a key milestone in bilateral trade relations. The agreement provides Kenyan traders with duty-free and quota-free access to the EU’s vast market, valued at 13 trillion euros. Signed in December 2023 in Nairobi by President William Ruto and EU Commission President Ursula von der Leyen, the EPA had already been ratified by the European Parliament. Read more.

The Affordable Housing Act of 2024

The Affordable Housing Act of 2024, signed into law this year, introduced the Affordable Housing Levy (AHL), which imposes a 1.5% levy on both employees’ and employers’ gross salaries under the Employment Act, 2007. The legality of the levy was challenged in court, but it was ultimately upheld. The implementation of the AHL has significantly affected employees’ take-home pay, though the National Treasury has proposed tax reliefs to ease the impact. Read more.

The national building code of 2024

The National Building Code 2024, unveiled by Kenya’s Cabinet Secretary for Lands, Public Works, Housing, and Urban Development, marked a transformative step for the country’s construction and development sector. Published on February 20th, 2024, the Code introduces key provisions focused on ensuring efficient, safe, and future-proof infrastructure. A significant feature is the incorporation of guidelines for installing telecommunications, particularly fiber optic cables, in buildings. The Code also mandates safety measures, including the use of rigid conduits and separation of electricity and fiber cables. It aims to promote shared infrastructure and foster competition in the telecom sector. Read more.

The energy regulations of 2024

Kenya’s electricity market is undergoing significant changes with the Energy (Electricity Market, Bulk Supply, and Open Access) Regulations, 2024. These regulations end monopoly and open up the market to independent players beyond the government-run Kenya Power and KETRACO, allowing Independent Power Producers (IPPs) to be involved in the entire electricity supply chain, from generation to distribution. Read more.

Kenya’s treasury single account

Kenya’s approval of the Treasury Single Account (TSA) marked a significant step in consolidating government finances. Traditionally, government funds have been spread across numerous accounts held by various public entities. The TSA aims to centralize these funds, providing the government with a clearer picture of its cash balances, improving transparency, and controlling expenditure. To further compound these changes to the financial sector, the Central Bank of Kenya (CBK) is set to introduce a financial sector-wide interoperability system, which will make sweeping changes in the country’s financial system. Read more.

Kenya’s carbon market regulations of 2024

Kenya made a significant move towards a sustainable future with the introduction of the Climate Change (Carbon Markets) Regulations, 2024. These regulations provide a structured framework for carbon market projects, which involve businesses earning carbon credits—green points awarded for eco-friendly actions like using clean energy or planting trees. Read more.