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

This week, the financial headlines were dominated by revelations from the Auditor General's report, exposing deep-rooted corruption — from the Ksh104.8 billion SHA project secretly controlled by private firms to Ksh5 billion in irregular withdrawals from the Contingencies Fund. The KUSCCO scandal also escalated, with saccos struggling to absorb losses and concerns over suspicious real estate deals.

At the same time, the Kenya Revenue Authority (KRA) ramped up reforms, shifting its tax focus to the informal sector, upgrading eTIMS for easier compliance, and confronting internal scandals like the disappearance of 9 million excise stamps.

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

⚕️ SHA Project Under Fire 

The Ksh104.8 billion Social Health Authority (SHA) system is facing scrutiny after the Auditor General revealed that the government neither owns nor controls the system—intellectual property rights belong to a private company. 

Kenyans pay:

• Ksh2 for every Ksh100 contributed to SHA.

• Ksh5 for every Ksh100 claimed by hospitals.

• 1.5% for tracking services. 

• The private firm stands to earn Ksh111 billion over 10 years, while the government is contractually barred from developing a competing system. Alarmingly, any contract disputes will be settled in London, not Kenya.

Other Items Included in the Auditor General report include:

1. 💸 Ksh5.03 Billion Irregular Withdrawals 

The Auditor General flagged Ksh5.03 billion in irregular withdrawals from the Contingencies Fund for the year ending June 2024. Funds meant for emergencies were disbursed for non-urgent uses, including:

• Ksh3.8 billion to the State Department for Arid and Semi-Arid Lands.

• Ksh130 million for public works, crop development, and livestock. Another Ksh1.07 billion from the Ministries of Defence, Internal Security, and Irrigation was disbursed without full audits.

2. 👮 Ksh5 Billion Insurance Scam 

A Ksh5 billion scam has rocked the National Police Service and Kenya Prisons Service. An investigation uncovered that despite group insurance cover for 141,961 officers, insurers failed to pay:

• 21 death claims worth Ksh43.5 million.

• 262 injury claims.

• 509 WIBA claims. The Auditor General slammed poor contract monitoring, raising fears of further losses.

3. 🌿 Kenya Prisons Land Grabs 

Thousands of acres of Kenya Prisons Service land have been illegally grabbed by individuals with fraudulent title deeds. The affected prison facilities include Kitale, Shimo la Tewa, Thika, Nakuru, Narok, Malindi, and Kisumu. An inter-ministerial committee has been formed to reclaim the land.

4. ⚖️ Counties’ Ksh21 Billion Legal Bill 

Counties have spent billions on private legal fees despite having in-house teams. Nairobi alone owes four lawyers Ksh6 billion—29% of pending legal bills. Irregular legal expenses were flagged in Nandi, Homa Bay, Kisumu, Kilifi, and Mombasa due to lack of proper documentation.

📊 Auditor General's Office Shake-Up? 

A proposed bill seeks to remove the Auditor General as head of the National Audit Office, replacing it with an Audit Advisory Board. Critics warn this could compromise public financial oversight, despite government claims of boosting efficiency.

💡 KRA Targets Informal Sector 

The KRA is shifting focus to businesses earning Ksh200 million and below, citing that this group—despite having 20 million PIN holders—contributes just 14% of domestic taxes. The new Micro & Small Taxpayers Department aims to boost transparency by tracking asset ownership and incentivizing fiscal invoicing.

🧾 KRA’s eTIMS Upgrade 

KRA has upgraded its electronic Tax Invoice Management System (eTIMS) for self-onboarding, eliminating manual approvals. With only 18.1% of registered firms using eTIMS in 2023, this move is expected to simplify tax compliance.

🔍 Missing Excise Stamps Scandal 

The KRA is investigating the disappearance of 9 million excise stamps—used to track goods like cigarettes—raising tax evasion fears. To combat corruption, KRA plans to equip staff with 350 body cameras and real-time monitoring tools.

🏚️ Kuscco Sacco Scandal Update 

Several saccos hit by the Kuscco fraud scandal—linked to Ksh13.3 billion in losses—are not fully booking losses, opting to stagger them over years which is against the  international standards on financial reporting. 

Saccos like Qona, Nyati, Sheria, and Mhasibu have made only partial provisions, while others including Stima, Kimisitu, Balozi, and Kenpipe have fully provisioned their exposures. The state has also instructed major saccos to lower dividend payouts to protect liquidity, raising concerns over the safeguarding of members’ funds.

🏠 Kuscco's Housing Project 

Kuscco's Kajiado housing project has raised eyebrows, offering homes priced at Ksh105 million for a Ksh5,000 deposit—raising concerns over financial irregularities and risks to buyers.

⚡ Potential Electricity Price Hike 

Kenya Power warns of a 30% electricity price surge if it agrees to pay Ksh63.8 billion wayleave charges for its distribution lines, which the county is demanding. Although power bills have eased recently, this dispute could push prices back up.

📉 Forex Trading Fraud

A trader was charged with diverting Ksh215.3 million meant for online forex trading for personal use. His company, Trade Sense’s, license has been suspended by the Capital Market Authority for 90 days as investigations continue.

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This week’s finance tips

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

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Tony and the Money254 editorial team.