The Atom and the Empire: How Global Giants Are Eyeing Kenya’s Energy Future

Kenya’s decision to go nuclear has set off more than an energy transition — it has triggered a geopolitical courtship. As the country advances its plan to construct a 1,000-megawatt nuclear power plant by 2034, the world’s top atomic powers are circling. Russia, China, and the United States each see in Kenya more than a client; they see a strategic foothold in East Africa’s next phase of industrialization. Rosatom, Moscow’s state nuclear corporation, has already positioned itself as a leading partner, offering a full-package Build-Own-Operate model similar to the deal it struck in Egypt. China, meanwhile, is extending its Belt and Road footprint to include nuclear cooperation, promising financing, infrastructure, and workforce training. Across the Atlantic, Washington is promoting a more measured engagement — advocating for small modular reactors (SMRs), governance reforms, and safety-first collaboration under IAEA supervision. For Kenya, these competing suitors represent not just technological options, but distinct political and economic futures.

Moscow’s offer is enticing but heavy with precedent. Through Rosatom, Russia promises to finance, construct, and train Kenya’s first generation of nuclear engineers — all while ensuring rapid project delivery. Yet such generosity carries weighty strings. Africa’s only active nuclear project, Egypt’s El-Dabaa, is already testing the sustainability of similar financing terms. The loans are long-term, denominated in hard currency, and backed by state-to-state commitments that can outlast political cycles. For developing economies, such dependency risks trading short-term power security for long-term fiscal vulnerability. China’s playbook differs in form but not in ambition. By bundling nuclear cooperation into its broader Belt and Road matrix, Beijing offers a seamless blend of infrastructure, credit, and control — a model that fuses technology transfer with quiet strategic encroachment. Kenya, already a major recipient of Chinese infrastructure loans, would need to tread carefully to avoid replicating debt traps under a new, atomic banner.

The United States, for its part, sees Kenya as a proving ground for its rebranded nuclear diplomacy in Africa. Washington’s recent “Atoms for Peaceful Growth” initiative seeks to counter Russian and Chinese influence by promoting advanced modular reactors and transparent regulatory partnerships. Its pitch emphasizes capacity-building over construction — slower, perhaps, but anchored in institutional strength and safety culture. For Nairobi, the task is delicate: to navigate between these rival powers without ceding strategic autonomy. Each promise carries peril; each partnership, a price. The nuclear project’s success may depend less on which partner Kenya chooses, and more on whether it can maintain control over the agenda — financing, governance, and public trust alike. For the world’s atomic giants, Kenya is a stage for influence; for Kenya, it is a test of sovereignty. And as this high-stakes energy diplomacy unfolds, the question that follows is equally pressing: can the country’s celebrated green revolution keep pace, or is it being slowly eclipsed by the glow of the atom?

References:

Lida Network Impact of Kenya’s First Nuclear Power Plant Ambitions

IEA How a high cost of capital is holding back energy development in Kenya and Senegal

Nuclear Business Platform Kenya’s Nuclear Energy Sector: A Strategic and Commercial Overview for Investors and Partners

The Africa Report US ramps up nuclear energy for Africa in showdown with Russia, China

IAEA Community at the Heart of Kenya’s Nuclear Energy Debate

The Africa Report Kenya aims to build nuclear power plant by 2034, says minister

Ministry of Energy and Petroleum Kenya signs MOU on Nuclear power collaboration with China

Africa Intelligence Nairobi looks to US rather than Russia for its nuclear programme

Daily Nation Beyond the Cold War: How Russia could help power Kenya’s development agenda

Kenya News Agency Kenya Targets 20,000MW Nuclear Power Plant by 2040

The Star Kenya, China ink major deal to boost nuclear energy development

The Data State: Power, Privacy, and Kenya’s Struggle for Digital Sovereignty

Kenya’s digital transformation has reached an inflection point. Through the integration of platforms such as eCitizen, Maisha Namba, and IFMIS, the State now operates as a vast data processor — collecting, linking, and analyzing the lives of millions of citizens in real time. What began as a quest for efficiency has evolved into a new form of governance: one built on algorithms and infrastructure rather than laws and institutions. Under the Data Protection Act (DPA) 2019, citizens were promised control over their personal information, while the Office of the Data Protection Commissioner (ODPC) was established as the custodian of privacy rights. Yet in practice, enforcement remains weak, politically constrained, and under-resourced. The result is a paradox: Kenya’s most progressive digital laws coexist with some of its most opaque data practices. As it is, the country is witnessing the emergence of a public-private algorithmic interlock — a hybrid system in which state and corporate power merge to govern through data.

At the core of this interlock lies Kenya’s cloud dependency, the Achilles’ heel of its digital sovereignty. The Cloud-First Policy (2023) was designed to enhance efficiency by migrating state systems to cloud infrastructure. In reality, it has tethered Kenya’s critical data to foreign providers — notably Microsoft Azure, Amazon Web Services (AWS), and Huawei Cloud. These platforms host sensitive national databases, including immigration, healthcare, and education records. While they offer advanced security and performance, they also place Kenya’s sovereignty at risk: jurisdiction over this data often lies outside national reach. The government’s own National Cloud Data Centre at Konza Technopolis, meant to localize and secure state data, remains underutilized, operating below capacity. Analysts warn that this imbalance represents a “sovereignty paradox” — a situation in which Kenya aspires to digital independence but relies on foreign entities to store and secure the very data that constitutes its national identity. In a world where information is power, Kenya’s cloud partnerships may have outsourced the core infrastructure of governance itself.

This dependency also feeds into the expanding reach of digital surveillance, often justified under the banner of cybersecurity. The fusion of citizen databases — spanning KRA tax systems, telecommunication registries, and biometric IDs — enables predictive profiling that blurs the boundary between public safety and state intrusion. The Cybercrimes (Amendment) Act 2024 further amplifies this concern, granting security agencies powers to intercept and remove online content without prior judicial approval. Civil-society groups warn that such tools could easily be weaponized to silence critics and monitor dissent under the guise of digital policing. At the same time, Kenya still lacks a comprehensive data ownership framework, leaving citizens powerless to reclaim or delete their data. The ODPC’s reactive approach, compounded by political pressure, means violations are often addressed only after they occur. Looking ahead, Kenya’s battle for democracy is increasingly being fought not in parliaments or streets but within servers and code. Whether the nation’s digital transformation strengthens sovereignty or surrenders it will depend on one crucial question — who ultimately controls the data that defines its people.

References:

Tech Africa News Kenya Begins Drafting National Data Governance Policy

Microsoft Microsoft and G42 announce $1 billion comprehensive digital ecosystem initiative for Kenya

Site Selection Africa: Digital Giants Unveil Billion-Dollar Data and Skills Plan for Kenya and East Africa

Data Guidance Kenya: The Cloud Policy – what organizations need to know

CM Advocates Legal Boundaries of Data Commissioner’s Enforcement Powers

The Algorithm and the Republic — Kenya’s Reckoning with AI Governance

When a private company’s neural nets began to unmask the hidden flows inside M-Pesa, the discovery jolted more than the fintech sector — it forced Kenya to confront a systemic question: who watches the watchers, and on what rules? The rollout of AI-driven compliance tools at Safaricom was never merely a tech upgrade; it arrived as part of a national emergency — a response to international pressure, spiralling fraud, and regulatory failure. The Financial Action Task Force’s increased-monitoring designation and months of global scrutiny had already pushed lawmakers and regulators into a sprint of reforms; industry actors answered with models that could learn patterns humans could not. But those same models required data — vast, granular, and often personal — and the legal scaffolding for such access was changing in real time. Kenya’s recent cyber-law overhaul and parliamentary amendments to the Computer Misuse and Cybercrime Act expanded state powers over online infrastructure, tightened penalties for SIM-swap and phishing offences, and gave the National Computer and Cybercrimes Coordination Committee sweeping directive authority over platforms and applications. Those moves addressed real harms — SIM swap fraud, phishing, and mass laundering — but they also recalibrated the balance between surveillance and rights.

Video Courtesy: The Kenyan Wall Street Youtube Channel

That recalibration is tested in the day-to-day rub of enforcement. Regulators and the ODPC have begun to draw lines: the Data Protection Commissioner’s recent ruling against a major betting operator for excessive data demands underscores the point that AML objectives cannot be a carte blanche for limitless intrusion. In the Betika case the ODPC found the company’s demand for three months of a user’s M-Pesa statements at account-closure to be disproportionate and ordered compensation, signalling that data-minimisation and privacy remain legally enforceable even amid AML pressures. At the same time, FATF’s 2025 monitoring guidance — and independent analysis from ISS Africa — make plain that Kenya must also show measurable results in prosecutions, beneficial-ownership transparency, and risk-based supervision of non-financial entities (including gambling and virtual assets) if it is to repair global confidence. The practical implication is blunt: Kenya cannot satisfy international partners by papering laws alone; enforcement and proportionate procedural safeguards must accompany technical surveillance. Otherwise the country risks swapping one reputational problem (grey-listing) for another — a domestic legitimacy crisis born of heavy-handed data practices.

So where does Kenya go from here? The answer lies in design choices — legal, technical, and institutional — that make accountability a feature, not an afterthought. We recommend three urgent, interlocking reforms that turn the AI question into a governance opportunity: (1) Purpose-bound, time-limited data access. AML or security queries should be scoped narrowly and logged; full transaction histories must not be a default feed into private models. (2) Explainability + redress. Any automated decision that materially affects a person (account freezes, cash-outs blocked, KYC escalations) must carry a succinct, non-technical rationale and a fast appeals channel routed through an independent body. (3) Joint independent oversight. Operationalize a statutory ODPC–FRC technical review board with public reporting obligations, the power to audit both models and data requests, and a mandate to publish redaction and retention metrics. These are not frictionless reforms — they will slow some processes and impose costs — but that trade-off is precisely the point: legitimacy costs less than lost trust. If Kenya stitches these protections into law and practice — and couples them with meaningful prosecution of financial crimes and improved beneficial-ownership registers — it can convert the awkward moment of global scrutiny into a first-mover advantage: an African model of rights-based, explainable AI governance for financial systems. The choices made now will decide whether Kenya’s algorithms become instruments of accountability or mechanisms that hollow out public trust.

References:

Business Daily Security or surveillance? How amended cyber law could reshape Kenya’s online space

Daily Nation How AI can close trust gaps in Africa’s financial systems

The Kenyan Wall Street How Safaricom is Leveraging AI to Bolster M-Pesa Security and Efficiency

Business Daily What FATF grey-listing means for Kenya

Steam or Atom? Kenya’s Defining Energy Gamble

Kenya’s energy story is being rewritten on two dramatically different blueprints. In the steaming Rift Valley, the hum of geothermal turbines tells the story of a nation that has nearly conquered its clean energy dream — with close to 90% of its power drawn from renewables, mainly geothermal, hydro, and wind. This success has made Kenya a continental symbol of green progress and a diplomatic darling of climate-conscious financiers. Yet, in quiet government boardrooms in Nairobi, a second vision gathers force — one powered not by heat from the earth but by the fission of the atom. The Nuclear Power and Energy Agency (NuPEA) is advancing plans for a 1,000-megawatt nuclear plant set to begin construction by 2027 and deliver electricity by 2034. The result is a nation straddling a paradox: can Kenya remain the face of Africa’s green revolution while becoming its first atomic pioneer?

Behind the glossy renewable statistics lies a more fragile truth. Kenya’s hydropower output has fallen prey to erratic weather, with droughts cutting generation by 15% in 2022, while rising demand — now peaking above 2,300 megawatts — has exposed the limits of an overstretched grid. The blackouts that have rippled through homes and factories underscore a growing reality: renewable success has not translated into industrial reliability. For planners pursuing Vision 2030 and the Bottom-Up Economic Transformation Agenda (BETA), the numbers are sobering — the nation’s installed capacity of 3,400 MW must grow nearly twenty-fold to meet future manufacturing and digital-era needs. In this context, nuclear energy is being framed not as an ideological betrayal of green ideals, but as a pragmatic lifeline — a bid for baseload stability, energy sovereignty, and freedom from the climate vulnerabilities that shadow the country’s renewable crown.

Yet this dual pursuit exposes Kenya to a dangerous collision of timelines, financing, and identity. The government’s promise of a 100% renewable grid by 2030 sits uneasily beside its nuclear timeline, forcing a quiet redefinition of “clean” from renewable to low-carbon. The nuclear build, projected at $2–3 billion, also competes for scarce development funding with the $19.1 billion needed to expand renewables under the National Energy Compact. Beyond cost, the gamble risks eroding Kenya’s most valuable diplomatic asset — its green reputation. As the country steps onto the nuclear stage, it must navigate a delicate balance between sustaining its climate leadership and pursuing industrial power. The question now confronting Nairobi is not just how to keep the lights on, but how to do so without dimming the glow of its hard-won green identity — a tension that will define Kenya’s energy destiny and set the stage for the next chapter: the global power play behind its nuclear dream.

References:

African Business Kenya plans first nuclear plant within decade

Government Advertising Agency Kenya targets 20,000MW nuclear power to ease electricity shortfall

The Kenyan Wall Street Kenya Sets New Electricity Demand Record as Grid Faces Rapid Growth

Business Daily Electricity production hits new record high on rising demand

Kenya News Agency NuPEA pledges nuclear power production takeoff by 2034


Digital Leap or Digital Trap? Kenya’s Governance Gap in the AI Era

Kenya’s digital revolution is unfolding at breakneck speed, promising to propel the nation into the heart of Africa’s AI transformation. Anchored by the Data Protection Act (DPA) 2019 and the National Artificial Intelligence Strategy (2025–2030), the framework looks robust and visionary. It enshrines data privacy as a constitutional right, establishes the Office of the Data Protection Commissioner (ODPC), and commits to algorithmic transparency, fairness, and human oversight. Kenya’s regulatory model has even earned international acclaim — Nairobi is slated to host the Global Privacy Assembly in 2027, a symbolic recognition of its leadership in ethical data governance. Complementing this is the Kenya Bureau of Standards (KEBS) Draft Code of Practice for AI Applications, a soft-law guideline urging developers to uphold explainability, bias detection, and user control. Yet, beneath these commendable milestones lies a troubling contradiction: while Kenya’s digital frameworks project global sophistication, their domestic enforcement remains weak, underfunded, and vulnerable to political interference. The result is a widening gap between the vision of digital accountability and the lived experience of digital vulnerability.

Security & AI Governance: Reducing Risks in AI Systems (IBM Technology)

The cracks are increasingly visible. The Kenya Robotics and Artificial Intelligence Association Bill (2023) offers a striking example: penalties for violations start at just KES 20,000, a figure critics say mocks the idea of deterrence. Meanwhile, the Kenya Information and Communications (Amendment) Bill (2025) threatens to introduce consumption-based internet billing — a policy that could push millions of rural and low-income Kenyans offline, undermining the government’s own pledge of universal digital inclusion. Analysts argue that these contradictions reveal a deeper crisis of coherence: the coexistence of progressive rhetoric and regressive policymaking. Kenya’s digital ecosystem thrives in innovation but falters in accountability. Citizens remain largely unaware of how their personal data — collected through AI-driven platforms in banking, telecommunications, and social services — is analyzed, profiled, or traded. This governance vacuum has turned the promise of the DPA into a largely symbolic safeguard, one that lacks the institutional strength to protect the very citizens it was written for.

The Maisha Namba digital identity project has become the defining case study in this paradox. Like its predecessor Huduma Namba, it has faced multiple High Court suspensions for failing to meet the DPA’s core requirement — the Data Protection Impact Assessment (DPIA). Civil society watchdogs, led by Haki na Sheria and the Katiba Institute, continue to challenge the government’s persistence in rolling out the system despite clear judicial orders. Experts warn that the project’s centralized biometric database presents a single point of failure — a goldmine for identity theft and a recipe for exclusion should data integrity ever be compromised. The executive’s determination to proceed despite these warnings reflects a governance culture where compliance is optional and constitutional limits are elastic. In the absence of strong regulatory oversight and digital literacy, Kenya risks converting its AI ambition into an algorithmic vulnerability — a digital trap masquerading as a leap forward. The challenge is no longer about drafting new laws; it is about enforcing the ones that already exist with integrity, transparency, and public trust.

References:

The Star Lift order not permit to print Maisha Namba cards, State told

Business Daily Why IT experts want State to reject the new robotics bill

Indepth Research Institute Nairobi To Host The World On Data Privacy in 2027: Big Tech, Big Policy, Big Moment

Biometric Update Advocates pick privacy, inclusion holds in Kenya’s Maisha Namba digital ID system


Digital Dilemmas: Kenya’s New Cybercrime Law Tests the Boundaries of Free Speech

Kenya’s uneasy relationship with digital freedom deepened on October 15, 2025, when President William Ruto assented to the Computer Misuse and Cybercrimes (Amendment) Act 2024—a move that instantly ignited outrage across the country’s vibrant online community. The signing coincided with the death of former Prime Minister Raila Odinga, and critics accused the administration of using a moment of national grief to push through controversial legislation. Ruto rejected that charge, saying that the Bill had already cleared Parliament and that “governance cannot be suspended, even in sadness.” Still, the optics proved volatile: by nightfall, hashtags such as #RejectCyberCrimeLaw trended across X, while activists, journalists, and lawyers decried what they called an assault on free expression in the digital space.

At issue are vague definitions and sweeping powers that critics fear will criminalize dissent. The law expands the offense of cyber-harassment to cover any online communication “likely to cause” emotional, reputational, or financial harm—a threshold that the Kenya Human Rights Commission (KHRC) calls “unconstitutionally broad and prone to abuse.” It also criminalizes the publication of “false, misleading, or fictitious” information deemed capable of causing public panic and grants the National Computer and Cybercrimes Coordination Committee (NC4)—a body dominated by security officials—the power to block or remove content without prior court approval. Penalties are steep: up to KES 20 million in fines or ten years in prison. Civil-society groups, led by the KHRC and activist-musician Reuben Kigame, swiftly challenged the law in the High Court, arguing it violated constitutional rights to free expression and fair trial. On October 22, Justice E. Mabeya temporarily suspended sections 27(1)(b), 27(1)(c), and 27(2)—the core clauses on cyber-harassment and “false” information—pending a full hearing, acknowledging “serious questions on proportionality and vagueness.”

Government officials have defended the legislation as an overdue modernization of Kenya’s 2018 cybercrime law. Spokesperson Isaac Mwaura said it targets “emerging online threats like financial fraud, child exploitation, and cyber-terrorism,” while State House’s Dennis Itumbi maintained the amendments merely “tighten enforcement loopholes.” Yet digital-rights advocates see a wider pattern of algorithmic governance and shrinking civic space—from biometric identity systems like Maisha Namba to Kenya’s cloud-first data partnerships with Big Tech. To them, the new Act represents not reform but regression: a consolidation of executive control over cyberspace. As the High Court prepares to hear the substantive case, Kenya faces a pivotal test. Whether the Cybercrimes (Amendment) Act becomes a legitimate shield against digital abuse or a weapon against dissent will determine how the nation defines liberty in its fast-evolving algorithmic state.

References:

Techcabal Court suspends parts of Kenya’s new cyber law over free speech concerns

Kenya News Agency President Ruto clarifies cyber crime law amid public debate

The Star High Court suspends key provisions of Ruto’s newly assented cybercrime law

Citizen Digital Court suspends cyber harassment section in new Computer Misuse law

Tech Africa News Kenya Begins Drafting National Data Governance Policy

Jijuze Privacy vs. Security — Kenya’s New Surveillance Dilemma

Fraud Syndicates and the Human Factor — The Dark Underside of M-Pesa

It began with a phone call that seemed harmless — a polite voice claiming to be from Safaricom’s customer care, confirming an M-Pesa update. Within minutes, Jane, a market trader from Nakuru, had lost everything in her wallet: her savings, her chama contributions, her business float. Hers wasn’t an isolated case. Across Kenya, from Kisumu to Kitengela, stories like Jane’s unfold daily — victims of digital confidence games that prey on trust and technological gaps. Beneath the convenience of Kenya’s mobile-money revolution lies a dark economy of cloned SIM cards, intercepted one-time passwords, and rogue insiders who sell customer data. What used to be petty phone scams has evolved into a multi-tiered fraud network, often coordinated through WhatsApp and Telegram groups, blending social engineering with technical precision. By the time victims realize their wallets have been emptied, the syndicates have already moved the money — split it, layered it, and cleaned it across dozens of M-Pesa accounts in seconds.

Behind the scenes, Safaricom’s AI compliance core is racing to keep up. Its models analyze millions of daily transactions, searching for irregular velocity, mirrored wallet behaviors, or login anomalies that betray coordinated fraud. The patterns are hauntingly human — the same phone IMEI used across unrelated accounts, repeated deposits at odd hours, or withdrawals made seconds after password resets. Investigators have identified rogue M-Pesa agents who act as the final cash-out nodes in this digital laundering chain, turning stolen virtual funds into physical currency. In one 2024 case in Eastlands, a syndicate of former call-centre employees was arrested after siphoning KSh 27 million from unsuspecting users — all through identity swaps and internal credential misuse. AI has since helped trace such insider leaks, tagging compromised agent IDs and disabling accounts that exhibit duplicate fingerprints. But even as the system grows smarter, so do the fraudsters, adapting to its logic, learning from its lags, and exploiting the tiniest cracks in Kenya’s fintech armor.

The war against M-Pesa fraud has thus become as much psychological as it is technological. For every line of defense built by machine learning, a counter-strategy emerges in the human domain — manipulation, deceit, and insider temptation. Regulators and investigators now warn that Kenya’s digital integrity hinges not only on code, but on culture — ethics, awareness, and enforcement. Safaricom has begun rolling out human-centered safeguards: community alerts, biometric verification pilots, and tighter collaboration with law enforcement. But the real test is whether ordinary Kenyans, from traders to teachers, can trust a system where the threat no longer comes from distant hackers but from within their own networks. The digital revolution gave Kenya financial freedom; now it must reckon with the predators it empowered. In our next post, we’ll explore the growing debate between privacy and security — and how Kenya’s AI revolution is forcing a reckoning over who really controls your data.

References:

Techcabal Safaricom fires 113 employees over fraud as internal cases rise

Techcabal How Safaricom’s AI exposed money laundering in Kenya’s betting boom

Rest of World M-Pesa has been huge for Kenya’s economy — and for scammers

Techpoint Africa Investigating M-PESA fraud cases in Kenya

The FATF Fallout — Kenya’s Grey Listing and the Regulatory Reckoning

When Safaricom deployed its AI compliance engine, it wasn’t just about technological advancement — it was about survival. Behind the polished rollout was a growing alarm: Kenya had been placed on the Financial Action Task Force’s grey list in February 2024, forcing a reckoning over AML/CFT deficiencies exposed by international watchdogs. The grey listing exposed severe gaps: weak beneficial ownership disclosure, minimal prosecutions of money laundering, and under-regulation of sectors at high risk, including gambling, real estate, non-profit organisations, virtual assets, and law firms. Safaricom, already under pressure, recognized that its standing as the country’s digital financial backbone (through M-Pesa) meant that mere innovation would not suffice without credible compliance. The company’s AI overhaul was not a strategic choice — it was a compliance lifeline in a context where global trust, investor confidence, and even Kenya’s regional financial status were on the line.

The government’s response post-grey-listing was fast but fraught. On 17 June 2025, Kenya passed the new Anti-Money Laundering and Combating Terrorism Financing Act, strengthening the mandate of the Financial Reporting Centre (FRC) to oversee not just banks but non-financial businesses, regulated gambling operators, and high-risk non-profit entities. New requirements for beneficial ownership transparency, risk-based supervision, enhanced due diligence for high-risk customers, and stricter reporting of suspicious transactions were added. Yet, FATF’s June 2025 monitoring statement makes clear: Kenya is still under close watch. The list of obligations under “increased monitoring” remains long: non-financial entities must be better regulated; virtual asset service providers must be accounted for; suspicious transaction reports must rise; enforcement must reach even the high and powerful. The risk is no longer about drafting laws, but whether those laws bite.

But the FATF fallout isn’t only about compliance checkboxes—it’s rewriting Kenya’s fintech ecosystem. Startups, betting firms, M-Pesa agents, virtual asset operators are now navigating a regulatory terrain that demands transparency in ownership, speed in auditing, and an ever-watchful AI lens on behavior. The pushback has begun: fears of overreach, regulatory burden, and challenges for small operators. Still, for the first time in years, Kenya’s financial credibility is being rebuilt around enforceability—not just promise. As the Act takes effect and the global community watches, the real question is whether the government will apply these laws impartially — especially against the well-connected and politically exposed. Because grey-listing may be a stain, but it’s also the mirror revealing whether Kenya’s institutions have the courage and capacity to be truly accountable in a cashless, borderless world. Stay tuned for our next post as we continue to explore these developments and their implications!

References:

Institute for Security Studies Risk and reward of Kenya’s push to reverse FATF grey-listing

The FATF Jurisdictions under Increased Monitoring – 13 June 2025

Thomson Reuters AI, other technology the “only answer” to AML challenges in evolving threat landscape, says ACAMS report

ENACT IFFs and money laundering / Can anti-money laundering amendments get Kenya off FATF’s grey list?

The AI Awakening — Safaricom’s New War on Illicit Finance

When Safaricom quietly switched on its new artificial intelligence engine earlier this year, no one expected it to rattle the country’s most powerful industry — or expose a side of M-Pesa no one was supposed to see. Within days, the system began lighting up with digital red flags: strange betting transactions looping through ordinary wallets, micro-deposits disguised as gaming payouts, and accounts moving small amounts in patterns too precise to be random. What the algorithms were seeing wasn’t play — it was laundering. Billions of shillings were silently being rinsed through Kenya’s favorite mobile platform, hidden beneath the guise of everyday betting. For weeks, engineers watched in disbelief as the AI’s alerts mapped a web of financial deception so intricate it blurred the line between entertainment and organized crime. The revelation shook Safaricom’s compliance teams — and soon after, the regulators who realized that Kenya’s most celebrated innovation had also become its most sophisticated laundering highway.

Inside Safaricom, a quiet revolution had begun. The company wasn’t just fighting fraud — it was reprogramming its financial DNA. The AI core, built in partnership with advanced compliance auditors and data scientists, doesn’t merely track transactions; it learns human behavior. It detects hesitation, timing anomalies, and wallet relationships that no manual audit could ever spot. What began as a compliance upgrade quickly turned into a forensic awakening — a self-learning system capable of catching what criminals believed was invisible. But the move also triggered backlash. Betting firms, some major ones, protested account freezes and accused Safaricom of overreach. Yet for Safaricom, this was no longer about risk — it was about survival. The same technology that made M-Pesa a lifeline for millions had made it a target for laundering syndicates. Turning AI loose on that frontier was less a choice than an inevitability.

Now, the discovery has thrown Kenya’s digital economy into uncharted territory. Regulators are scrambling to keep up, data privacy watchdogs are asking hard questions, and compliance officers are quietly celebrating the first real glimpse into the scale of illicit flows buried within mobile money. For the first time, artificial intelligence isn’t just assisting Kenya’s war on financial crime — it’s leading it. The system doesn’t sleep, doesn’t flinch, and doesn’t forget. And as it continues to learn, one thing is certain: the era of hidden money on M-Pesa is ending — but the reckoning it has triggered is only beginning. Stay tuned for the next post in this six-part series, where we will delve deeper into the implications of these changes.

References:

Techcabal How Safaricom’s AI exposed money laundering in Kenya’s betting boom

The Kenyan Wall Street How Safaricom is Leveraging AI to Bolster M-Pesa Security and Efficiency

Citizen Digital Father, son arrested for conning M-Pesa operators over Ksh.200K in Nairobi

KBC M-pesa outage on Monday as Safaricom adopts AI to tame fraud

Understanding Kenya’s Investment Landscape Amid Fiscal Strain

Kenya’s economy is presenting investors with one of its most complex puzzles yet: macroeconomic stability on the surface, undercut by a fiscal storm brewing beneath. Inflation stands at a steady 4.6%—comfortably within the Central Bank of Kenya’s target range—granting policymakers room for monetary easing. GDP data also reflects resilience, with Q2 2025 growth at 5.0%, led by agriculture and a robust services sector. Yet behind these encouraging numbers lies a sobering reality: fiscal dominance. With interest payments now consuming roughly a third of all tax revenue, the government’s borrowing appetite is crowding out private credit. Commercial banks, chasing high-yield government paper, have little incentive to lower lending rates for businesses, leaving private sector credit growth crippled at barely 3.3%, down from 13.9% just a year ago.

This squeeze is not just an abstract statistic; it defines the contours of Kenya’s medium-term investment landscape. The government projects a 5.3% full-year expansion, but global institutions remain unconvinced. The IMF and World Bank forecast growth at 4.8% and 4.5% respectively, citing weak private sector consumption, a sluggish credit channel, and a high risk of debt distress. Kenya’s fiscal constraints are now the single most powerful determinant of its economic trajectory, leaving the Central Bank’s rate cuts largely ineffective. The implication for investors is clear: headline GDP growth masks a structural imbalance where state borrowing sets the price of credit and private enterprise takes a back seat.

The balance of risk and opportunity lies in how investors position themselves. Kenya’s external buffers—rising remittances, strong agricultural exports, and narrowed current account deficit—are encouraging, but remain fragile, as all three are highly exposed to global downturns. For fixed income investors, short-duration government paper offers yield but carries sovereign risk that cannot be ignored. For equities, defensive plays in export-driven agribusiness, technology, and digital services stand out, while firms reliant on domestic mass-market credit may falter. Direct investment opportunities exist in renewable energy, climate-linked finance, and tech, sectors less tied to domestic fiscal strain. For corporate strategists, survival hinges on operational efficiency, alternative financing, and robust risk management to cushion external shocks. Kenya stands at a decisive juncture: without credible fiscal consolidation, its growth story risks becoming a cycle of constrained resilience. For investors, the key lies not just in reading the numbers, but in recognizing the limits of resilience when credit and capital are structurally captured by the state.

References:

KNBS Inflation Rate (CPI)

CNBC Africa Kenya’s inflation rises slightly in September on food, transport

World Bank Group Despite Improvements, Kenya’s Fiscal Path is Fragile Amid High Debt Vulnerabilities and Weak Revenue Growth