Hello and welcome to the Money Weekly Newsletter, where Treasury CS John Mbadi has confirmed every investor's fears: Money Market Fund (MMF) returns have been declining and are not expected to rebound anytime soon.

While engaging with digital media publishers on Friday (just before this newsletter was approved for release), the CS confirmed that the falling interest rates were a result of the government’s decision to borrow from the public at reduced interest rates, noting, "It is better for the economy as a whole."

What Mbadi is Saying: "The interest rates have been going down, especially the rate at which the government has been borrowing. When I came in, the government was borrowing at 16%. Right now, it is going below 9% for 91-day Treasury Bills.

"The money market is not as lucrative as it used to be. I know some of you in the money market are wondering, 'What has Mbadi done?' It is better for the economy as a whole but may not be good for an individual investing in the money market."

Catch Up Quick: Money254 has covered the top-performing MMFs based on their net returns for April 2025—check them out [here]. Gulfcap MMF offered the highest returns at 11.84%.

Bonus: At the same event, Mbadi also explained that some tax exemptions were ineffective, calling for the state’s direct involvement in certain sectors, such as construction through affordable housing.

"If today, I register that I am putting up affordable housing in Ngara and enjoy exemptions on materials like cement and steel, how will the government ensure that the VAT-free cement actually ends up in Ngara and not at a commercial building in Karen? Is that possible?" he questioned.

"Some of these exemptions don't achieve the intended purpose. We are just allowing tax leakages, and someone has to bear that cost, which ends up being the ordinary Kenyan who isn’t privileged enough to cheat."

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Here is a quick recap of the top money news for the week:

NEWS RECAP

What happened this week

Knight Frank’s Wealth Report: Kenyan Edition

• According to the Wealth Report 2025, Kenya's wealthy investors prefer South Africa for its mature and diverse property market, strong infrastructure, and access to advanced financial services, offering broader opportunities and long-term value. While some diversify into stable markets like Canada and Europe, Kenya remains a key hub due to rapid urban growth, improving infrastructure, and local market familiarity.

• The report further showed that Kenya's super-rich are investing in art, classic cars, and wine for high future returns. Art tops the list, seen as a valuable, inflation-proof asset, with growing global demand for Kenyan and African pieces.

Trump Wants 5% Cut From Money Kenyans in US Send Home

A new proposal by the Trump administration, outlined in The One, Big, Beautiful Bill, seeks to impose a 5% excise tax on money sent abroad, including remittances to Kenya. If passed by the US Congress, the tax could cost Kenyans in the US an estimated Ksh17 billion annually, potentially reducing remittance flows—an essential source of income for many families in Kenya.

A Phone Comes With Health Insurance

M-KOPA has launched the M10 smartphone, packed with features and bundled with a Ksh30,000 annual hospital cash cover at no extra cost. If you're admitted to a hospital, you'll receive Ksh1,000 for every night spent there. What could be better than that?

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MONEY TIPS & TOOLS

This week’s finance tips

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MONEY254 #MONEYTOK OF THE WEEK

Returns on Bonds, T-bills & MMFs to Fall Further After New Govt Policy

Returns from investments like MMFs, T-Bills, and government bonds may soon drop following a new Treasury directive. State agencies and parastatals can no longer make competitive bids on government securities—they’ll now accept whatever rate CBK offers.money254 #MoneyManagement #Per

@money254hq

𝐑𝐞𝐭𝐮𝐫𝐧𝐬 𝐨𝐧 𝐁𝐨𝐧𝐝𝐬, 𝐓-𝐁𝐢𝐥𝐥𝐬 & 𝐌𝐌𝐅𝐬 𝐭𝐨 𝐅𝐚𝐥𝐥 𝐅𝐮𝐫𝐭𝐡𝐞𝐫 𝐀𝐟𝐭𝐞𝐫 𝐍𝐞𝐰 𝐆𝐨𝐯𝐭 𝐏𝐨𝐥𝐢𝐜𝐲 Returns from investments like MMFs, T-Bills, and government bonds m... See more

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

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Tony and the Money254 editorial team.