Happy Holidays! Welcome to our 18th and final Money Weekly Roundup of 2023.

This week, it was revealed that 10 governors did not spend a single shilling of their allocations on development projects in the first quarter of the 2023/24 FY with recurrent expenditure gobbling up taxpayer funds.

This is as a challenging business environment continues to dampen employment prospects for Kenyans with more layoffs on the way and foreign companies either scaling down operations or exiting Kenya altogether.

While the economy is down, we’ve included some of our favorite finance tips to help you stay up through this festive period in our finance tips section below.

Let’s dive in!

What happened this week

⚠️ 10 Counties Spent Nothing on Development in Q1 2023/24 FY

A report by Auditor-General Nancy Gathungu reveals that ten counties allocated zero funds to development projects in the three months ending September 2023. Three more countries spent less than 1% on development.

• Non-Developing Governors: Notable governors who failed to allocate funds for development include; Johnson Sakaja (Nairobi), Wavinya Ndeti (Machakos), Gladys Wanga (Homa Bay), Cecily Mbarire (Embu), Gideon Mung’aro (Kilifi), and Ahmed Abdullahi (Wajir) among others.

• Public Finance Management Act: The act mandates that development spending should be at least 35% of the total budget.

• Salaries and Recurrent Spending: The majority of the counties' expenditure, totaling Ksh67.47 billion, went towards salaries and recurrent costs.

• Council of Governors Refutes Report: CoG defends governors blaming the failure to spend on development on lengthy procurement processes, settlement of pending bills, and Parliament’s failure to allocate counties additional funds.

• Partial Payments: Report shows only four counties - Embu, Kericho, Machakos, and Samburu - made partial payments on their pending bills. 

• Unauthorised Spending: Report also highlights a 134% increase over eight years in government ministries, departments, and agencies (MDAs) spending without parliamentary authorisation. Read More.

🚌🎄 Festive Traveling Costs Unaffected by Fuel Price Drop

Last week, fuel prices experienced their most substantial drop in over two years, with up to a Ksh5 decrease per litre attributed to a decline in global crude prices. Nevertheless, this has not been reflected in the cost of travel as Kenyans have not been spared the perennial festive fare hikes.

With bus fares having surged by 50% to 200%, many families find it challenging to balance basic needs with the luxury of holiday travel. The Matatu Owners Association says fare hikes are attributed not only to fuel costs but also to supply and demand dynamics, with fewer vehicles available. Read More.

🐥 110,000 Poor Families to Get Livestock Commercialisation Support

Over 110,000 poor livestock and pastoralist households are set to benefit from a programme targeted at helping them acquire livestock feeds and veterinary products to bolster their livelihoods.

The Kenya Livestock Commercialisation Project (KeLCoP) which hopes to increase the incomes of small-scale rural farmers, will be using an e-voucher system to facilitate access to items such as chicken mash, layers, mineral licks, and veterinary supplies.

The six-year project is jointly funded by the Kenyan government, the International Fund for Agricultural Development, Heifer International, financial institutions, and beneficiary communities. Read More. 

📉 A Tough Economy Continues to Impact Employment

The outlook on employment prospects as 2023 comes to a close continues to be bleak as more employers signal the possibilities of job cuts. Others are significantly scaling down or closing down operations entirely. 

• Mastermind Tobacco (K) Ltd Layoffs: Company intends to terminate approximately 1,000 employees after entering administration. The company faces financial challenges, leading to delayed salary payments and the cessation of cigarette production six months ago. 

• Layoffs at Technical University of Kenya (TUK): Varsity is planning staff layoffs to address financial challenges and mitigate a growing wage bill. Prof. Benedict Mutua recently assumed the role of vice chancellor.

• Decline in Jobs in Export Processing Zones (EPZs): Jobs created by firms in Kenya's EPZs significantly dropped to 2,127 from 12,891 in the year ending June. The apparel industry, a major contributor to EPZ employment, faced disruptions due to insufficient orders in export markets, particularly the US. Read More.

• Procter & Gamble (P&G) and GlaxoSmithKline (GSK) exiting Kenya: GSK is closing its manufacturing facility after almost 60 years, citing low sales, competition from local producers, and affordable generic medications. P&G plans to exit, attributing the decision to the high cost of doing business, dollar shortages, and declining sales. Read More.

🤑 A USD5 Billion Currency Error 

How seriously do you take your typos? As the recently dismissed Kenya Broadcasting Corporation (KBC) acting Managing Director Samuel Maina may tell you, quoting the wrong currency on a Ksh5 billion settlement offer can be very costly, if not embarrassing.

Maina was making an offer to settle a long-running dispute with Channel 2 of Dubai which had sued the state broadcaster for improperly terminating a contract entered between the two entities.

• Currency Misquote: Maina's letter to a London-based law firm, Denton, quoted the settlement offer as USD5 billion (Ksh769.5 billion) instead of the Ksh5 billion.

• Apology: Following the error, Maina issued an apology to the ICT ministry, acknowledging a "grievous misrepresentation of the figure quoted” indicating he’d taken corrective action by withdrawing the letter containing the USD figures.

• Consequences:  ICT CS Eliud Owalo ordered the termination of Maina's contract and initiated disciplinary action against him. Paul Macharia was appointed new acting MD after ratification by the KBC Board on Wednesday.

Want more details? Check our full weekly update here:

This week’s finance tips

Welcome to Money254's Money Tips! Here, we share quick and easy tips to help you understand and manage your money better. We break down the tricky parts of handling your cash, so it's simple and clear for you.

Money254 MoneyTok of the week:

It’s the holiday season! Time to spend money on things, experiences, and people. So, how can you figure out who is worth spending your hard-earned money on during this season? Watch the video to find out!

@money254hq

How to Know Who Is Worth Spending Your Money On. While the holidays inspire giving, with limited resources you have to prioritise. Who goe... See more

That’s a wrap for this week’s Money Weekly!

We are taking a break for the holidays, and will pick up with our next Money Weekly on January 12th.

Also, while we’re on break, remember that we can help you compare over 300 loans, savings accounts, current accounts, and more on our website if you’re thinking about your next product.

Happy holidays, and looking forward to reconnecting in 2024! ✨

Eric and the Money254 editorial team.