*Today’s News Highlights* ▪ *High taxes, inflation weaken private sector growth in January* Kenya’s private sector activity expanded for a fourth running month in January, the first time in two years, on improving circulation of money and mild inflationary pressures which helped sustain output and demand for goods and services. The pace of expansion in activities such as output, new orders, and employment was, however, slower than the previous two months, according to a monthly survey based on feedback from about 400 companies. The Stanbic Kenya Purchasing Managers Index (PMI) — which monitors performance in key sectors of agriculture, manufacturing, construction, wholesale & retail, and services — slipped slightly to 50.5 from 50.6 in December. ▪ *More than half of businesses in Kenya see rise in costs on high taxes, inflation* Over half of the businesses in the country expect their primary operational costs to rise this year, largely pushed by high taxes, unfavourable government policies and inflation, a new private sector survey indicates. The 2025 Business Barometer survey done by the Kenya National Chamber of Commerce and Industry (KNCCI) reveals that 55 percent of firms now expect their costs to rise, up from 54 percent in November last year, highlighting a growing pessimism about the improvement of the business environment. ▪ *Treasury set to review PPP plan after Adani* The Treasury is set to review the suitability of processes used to identify public-private partnership (PPP) deals, amidst the fallout from the cancellation of projects linked to the Adani Group. President William Ruto was forced to cancel the proposed Jomo Kenyatta International Airport (JKIA) deal with the Indian conglomerate in November, following public outrage over the impact of the transaction including the potential for job losses. The exchequer has now sought consulting services to review its PPP framework, including the suitability of procurement methods. ▪ *Banks face CBK fines for not cutting cost of loans* The Central Bank of Kenya (CBK) will impose daily fines on banks as punishment for failure to cut interest rates in the latest effort by the regulator to unlock cheaper credit for businesses. CBK Governor Kamau Thugge said yesterday the regulator has started physical inspection of banks to expose and punish those that are reluctant to reduce cost of loans in line with cuts on the benchmark rate. He spoke on a day the regulator lowered its benchmark rate by 50 basis points and reduced the cash holdings to free up billions for banks to lend to customers trying to cope with a cash crunch. ▪ *US firm eyes pension billions for Kenya Expressway* US infrastructure investment manager Everstrong Capital has started a race to woo capital from local pension funds for the construction of the planned 440-kilometre Nairobi-Mombasa Expressway. In a new development, Everstrong Capital has struck a deal with CPF Capital & Advisory—a subsidiary of CPF Financial Services which manages pension funds—in a bid to woo billions of shillings from retirement benefits assets. _Courtesy: Business Daily_ https://whatsapp.com/channel/0029VaBcBIRAzNbtD1l1eA1k