New Payroll System for Civil Servants, Govt's 110K Jobs, SACCOs Face Mass Deregistration

Hello and welcome to the Money Weekly Newsletter, where we are zooming in on the Ksh4.29 trillion budget.

But first, a word from our sponsoring partner, Umba Microfinance Bank.

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On Thursday, CS John Mbadi performed the annual ritual of carrying a briefcase for half a kilometer from the Treasury Building to Parliament, which contained a budget estimated at Ksh4.29 trillion.

In his address, Mbadi announced the rollout of the Unified Human Resource Management System, which is aimed at streamlining the payroll for all government employees.

Aim: He noted that the new system, set to be implemented before the end of July this year, aims to eliminate fraud in payroll, especially ghost workers.

What Mbadi is Saying: "The Government will fully implement the Unified Human Resource Management System across all Public Sector entities by July 2025. This initiative is part of broader efforts to enhance Public Sector efficiency, improve management of the wage bill, and ensure the effective utilization of public funds."

Budget Winners and Losers

Kenya's defence emerged among the winners in the budget, themed 'Stimulating Sustainable Economic Recovery for Improved Livelihoods, Job Creation, Business, and Industrial Prosperity in Line with the Bottom-Up Economic Transformation Agenda.' Education was a top loser.

• Here are the winners:
  Alcohol manufacturers - Excise duty for manufacturing halved
  Reduced mortgage interest
  Construction - Excise duty on billets and wire rods reduced
  Leather manufacturing - Duty remissions granted on tannery chemicals
  Withholding tax reduced from 3% to 1.5%

• Losers
  25% excise duty on plastic imports
  Excise duty slapped on foreign digital app providers

Allocations

1. Education - Ksh702 billion

2. National security - Ksh253.8 billion

3. Health Ministry - Ksh138.1 billion

4. Agriculture Ministry - Ksh82.8 billion

Of Note: The government allocated Ksh464.8 billion to improve security, covering Ksh202.3 billion for defence, National Police Service (Ksh125.7 billion), National Intelligence Service (NIS) (Ksh51.4 billion), Correctional Services, through the Kenya Prisons Service, have been allocated Ksh38.1 billion, and lastly, the Internal Security and National Administration has been allocated Ksh32.5 billion.

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

Budget 2025/26

• The Salaries and Remuneration Commission (SRC) will review allowances and benefits for government employees in upcoming Collective Bargaining Agreements to align them with the Public Service Allowances Policy Guidelines, in response to the current economic climate.

• While the government has committed to paying exam fees for 2025 candidates, the CS revealed plans to review the current subsidy programme, proposing a shift to a targeted approach based on students’ family backgrounds. This could see parents from well-off households paying part of the fees, as the Treasury and Ministry of Education explore cost-sharing options to reduce the financial burden on the state.

Catch Up on More News

WEEKLY MONEY TIPS

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

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