Greetings and welcome to the second Money Weekly Roundup of 2025! 

This week, counties were barred from offering bursaries for primary, secondary, and tertiary education, with these now under the National Government.

Meanwhile, MPs are urging the SRC to reinstate salary raises frozen in 2024, pushing for fairness in public service pay reviews

As always, we’ve included some of our favourite personal finance articles in our Finance Tips section below.

Let’s dive in.

NEWS RECAP

What happened this week

🏫 County Bursaries Restricted Amid Legal Challenges

A directive from the Controller of Budget restricts counties from offering bursaries for primary, secondary, and tertiary education. These functions now fall under the National Government unless specific intergovernmental agreements are made. 

• This comes as uncertainty looms for over 246,000 KCSE students awaiting university placement details amid a court ruling that nullified the 2023 funding model. The Ministry of Education has yet to announce government-sponsored placement applications, and KUCCPS has provided no updates on slots or the selection process. More.

🍭 Sugar Prices Set to Increase by 4%

Starting February 1, sugar prices will rise due to a 4% Sugar Development Levy (SDL) on both local and imported sugar. 

• The levy, introduced under the Sugar Development Levy Order, 2025, will fund operations of the Kenya Sugar Board (KSB), research, infrastructure, and support for sugarcane farmers. This comes alongside recent excise duty hikes, adding pressure on consumers despite a 25% drop in sugar prices last year.

🚚 Advance Tax Deadline for Commercial Vehicles Nears

The Kenya Revenue Authority (KRA) has set January 20 as the deadline for advance tax payments on commercial vehicles, with rates based on load and passenger capacity. The penalties for non-compliance are steep, urging vehicle owners to comply.

• Tax rates depend on vehicle type, with vans, pick-ups, and lorries taxed at Sh2,500 per ton of load capacity (minimum Sh5,000 annually) and passenger vehicles charged Sh100 per passenger capacity per month (minimum Sh5,000 annually). 

🚧 Why the Nairobi-Nakuru Toll Road Project was Canceled

The government terminated a Ksh150 billion contract with French contractors for the Nairobi-Nakuru-Mau Summit Toll Road, citing unsustainable service fees. Talks are underway with Chinese investors as the project, key to regional trade, seeks a new path forward.

• Treasury reports revealed that the project’s service fees over 13 years would require additional borrowing, deemed unsustainable given tight public finances. The French contractors had planned to recover their investment through toll fees over 30 years.

🌍 Kenya Pursues Regional SGR Expansion

Kenya is exploring a UAE partnership to extend the Standard Gauge Railway to Uganda and South Sudan. The project aims to boost regional trade and integration, alongside a Ksh6.8 billion UAE-backed food security investment and a landmark trade agreement.

• President William Ruto announced a feasibility study agreement during his visit to Abu Dhabi, where he also secured the UAE’s investment in the Galana-Kulalu food security project valued at Ksh6.8 billion.

📈 T-Bill Rates Drop as Treasury Raises Ksh48.5 Billion

Treasury bills saw lower rates in the latest auction:

• 91-day T-bill: 9.59% (from 9.82%)

• 364-day T-bill: 11.33% (from 11.37%)

The Central Bank of Kenya accepted Ksh24.44 billion, rejecting costly bids, while also raising Ksh48.5 billion through reopened bonds.

• The National Treasury has raised Ksh48.5B from a heavily oversubscribed bond sale, surpassing its Ksh30B target as CBK reopened its 15-year and 25-year bonds. The CBK accepted bids worth Ksh23.75B and Ksh24.73B for the two bonds, offering yields of 14.2% and 15.68% respectively, while rejecting Ksh10.5B in high-priced bids to maintain lower borrowing costs. 

🪙 Crypto Adoption Rises Amid Dollar Shortages

Kenyan firms increasingly use cryptocurrencies like Tether (USDT) for foreign supplier payments to hedge against a weakening shilling. The Kenya Revenue Authority (KRA) collected Ksh10 billion in crypto taxes in 2023, as local adoption continues to rise despite CBK’s restrictions.

• According to a report by the International Monetary Fund (IMF). Stablecoins, digital assets backed by physical currencies such as the US dollar, are being used to hedge against currency depreciation and settle international transactions. An estimated 730,000 Kenyans, primarily under 40 years old, are engaged in cryptocurrency investments, typically transacting amounts below Ksh100,000. Despite a prohibition by the Central Bank of Kenya (CBK) on banks partnering with crypto-related entities, the adoption of cryptocurrencies continues to rise. 

• The Kenya Revenue Authority (KRA) collected Ksh10 billion in crypto-related taxes in 2023, with the market handling Ksh42.4 trillion between 2021 and 2022. The Capital Markets Authority (CMA) and CBK are exploring regulations to manage the sector's growth and mitigate potential risks.

🏦 State Offices Request Ksh1.6 Billion for Upgrades

President Ruto’s and Deputy President Kindiki’s offices seek Ksh1.6 billion for refurbishments, signaling a potential return to high spending amid fiscal constraints. Proposed upgrades include repairs, specialized facilities, and communication systems.

• This follows the reinstatement of non-essential expenditures in the wake of the collapsed Finance Bill 2024. Refurbishment projects, projected to cost Ksh19 billion by 2027, aim to enhance government facility standards despite ongoing fiscal constraints.

🪙 MPs Demand Pay Hike Amid Public Scrutiny

Members of the National Assembly are urging the new Salaries and Remuneration Commission (SRC) to implement pay rises that were halted in June 2024 following youth-led protests. 

• MPs, earning Ksh725,502 monthly, were set for a raise to Ksh739,600. The new Salaries and Remuneration Commission faces pressure to review public service pay amid concerns over fairness.

MONEY TIPS & TOOLS

This week’s finance tips

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

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