Hunt for SACCOs’ Stolen Billions Begins

A forensic audit has exposed a Ksh13.3 billion fraud at KUSCCO, with top executives implicated in falsified financial statements and bribery. Meanwhile, motorists face potential new taxes and fuel price hikes

Author

Emily Mutai
February 14, 2025

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

This Week in Money News: A forensic audit has exposed a Ksh13.3 billion fraud at KUSCCO, with top executives implicated in falsified financial statements and bribery.

Meanwhile, motorists face potential new taxes and fuel price hikes, the government seeks an extra Ksh199.9 billion in spending, and Kenya's revenue shortfall raises concerns over debt sustainability.

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

Let’s dive in.

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NEWS RECAP

What happened this week

💰 KUSCCO Fraud Scandal
A forensic audit by PwC has exposed a Ksh13.3 billion fraud at KUSCCO, revealing falsified accounts, bribery, and forged auditor signatures. Several top officials, including former MD George Ototo, are under scrutiny, with four already charged.

Co-operatives Cabinet Secretary Wycliffe Oparanya advised SACCO members to prepare for the possibility that they might not recover their funds, urging them to adjust their financial statements accordingly.

  • Financial Misconduct: KUSCCO executives hid Ksh3.7 billion in expenses and misclassified losses to fake profits.

  • Legal Action: Authorities have arrested four officials, with more expected to face charges. Read More.

🚗 Motorists Face Higher Costs
Kenyan motorists could see increased expenses due to proposed new taxes on car insurance, road tolls, and emissions. Additionally, fuel prices are set to rise on Feb 14, driven by global oil price surges and geopolitical tensions.

  • New Taxes: The government aims to bridge a Ksh4.05 trillion road sector deficit through increased levies.

  • Fuel Prices: EPRA warns of an imminent fuel price hike due to rising global costs.

📉 Revenue Shortfall & Budget Adjustments
The government is facing a revenue gap of Ksh200 billion in the 2025/26 fiscal year, potentially widening the fiscal deficit. Meanwhile, an error in budget documents inflated additional spending approvals, raising transparency concerns.

  • Budget Deficit: The Parliamentary Budget Office projects a widening shortfall in revenue collection.

  • Spending Adjustments: The Cabinet approved an additional Ksh199.9 billion in spending, but an initial error misreported this as Ksh344.8 billion.

🏷️ KRA’s Missing Excise Stamps
The Auditor-General has flagged the disappearance of 9.68 million excise stamps, raising fears of tax evasion and counterfeit goods flooding the market.

  • Tax Evasion Risks: The missing stamps could lead to billions in lost revenue.

  • Regulatory Concerns: KRA has yet to account for the missing stamps, sparking alarm among manufacturers.

🏥 SHA Health Fund Struggles
The Social Health Insurance Fund (SHIF) is struggling to sustain operations, with only 4 million active contributors out of 18 million registered. This has left many Kenyans paying out-of-pocket for medical care.

  • Funding Shortfalls: Delays in SHIF implementation are affecting critical health services.

  • Healthcare Access: Kenyans face uncertainty as SHIF struggles to meet coverage expectations. Read More.

🏠 Affordable Housing Funds Parked in T-Bills
Due to delays in project implementation, the government has invested Ksh46 billion of the Affordable Housing Levy into Treasury bills instead of construction projects.

  • Idle Funds: The Controller of Budget has raised concerns over the slow rollout of housing projects.

  • Investment Strategy: Funds are earning returns in T-bills while awaiting project commencement.

 US USAID Suspension Sparks Forex Concerns
The US has suspended USAID funding to Kenya, impacting key sectors such as health, education, and agriculture. While concerns over forex reserves arise, the CBK maintains that inflows remain stable.

  • Aid Freeze: Key development projects could be affected by the funding suspension.

Forex Stability: CBK assures that remittances and tourism continue to support foreign reserves.

Want more news? Check out and subscribe to our daily news summary news letter here - Money News Roundup

MONEY TIPS & TOOLS

This week’s finance tips

Welcome to Money254's Money Tips! Here, we share quick and easy tips that make understanding and managing your money a breeze. We break down the tricky parts of your finances and the financial landscape, making it simple and clear for you. Stay tuned for helpful tips every week.

Losing My Job, Money and Girlfriend on Valentine’s Day

I’ve always been the kind of person who gets excited about Valentine’s Day - flowers, chocolates, catch a movie at a mall - all the mushy stuff. Two years back, though, I learned that expectations and reality don’t always align. I was a couple of months deep into a relationship. It had started off great - a proper, all-in kind of thing.

www.money254.co.ke/post/losing-my-job-money-and-girlfriend-on-valentines-day-money-and-me

With a Ksh3 Million Retirement Package, Where Do I Invest? I Don’t Want Anything Stressful

If you are approaching retirement or have recently retired, it's crucial to make wise investment choices to ensure financial stability and a comfortable lifestyle. A smart strategy involves striking a balance between protecting your principal and investing for future growth. Here is a comprehensive guide:

www.money254.co.ke/post/with-a-ksh3-million-retirement-package-where-do-i-invest-i-dont-want-anything-stressful-money254-cash-clinic

The Most Profitable Stocks at the NSE: January 2024 to Date

Despite the tough economic climate, several stocks on the NSE have continued to perform exceptionally well. In this article, we take a look at some of the highest returning stocks in terms of capital gains, by analysing price appreciation over the past year.

www.money254.co.ke/post/the-most-profitable-stocks-at-the-nse-january-2024-to-date-savings

All About the Cytonn Money Market Fund

This article offers information about CMMF, its features, and how investors can access it. The Cytonn Group has faced legal issues with regard to its subsidiaries - Cytonn High Yield Solutions and Cytonn Real Estate. The MMF is managed through a separate, regulated legal entity. The Cytonn MMF delivered an annualized return of 16.6%.

www.money254.co.ke/post/all-about-the-cytonn-money-market-fund-info

MONEY254 #MONEYTOK OF THE WEEK

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

Tony and the Money254 editorial team.

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