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

This week, a new report has revealed Nairobi’s most expensive neighborhoods, with Upperhill topping the list at Ksh522.7 million per acre. Ruaka also stands out, surpassing affluent suburbs like Karen, Kitisuru, and Runda with land prices hitting Ksh111.2 million per acre.

In parallel, the Central Bank of Kenya (CBK) is offering investors tax-free infrastructure bonds with attractive returns of 13.938% and 14.399%. With a subscription deadline of February 12, these bonds are expected to support the government’s domestic borrowing goals for the 2024/25 fiscal year.

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

🏗️ Land Prices Surge in Ruaka

Land in Ruaka is now more expensive than in Nairobi suburbs such as Karen, Kitisuru, and Runda, costing Ksh111.2 million per acre compared to Ksh69 million, Ksh98.2 million, and Ksh93.3 million, respectively.

• In Nairobi suburbs, Upperhill leads with Ksh522.7 million per acre, while Kiserian is the lowest rising in Nairobi Satellite towns at Ksh12 million per acre.

• Land prices in Nairobi’s satellite towns grew by just 1.0% in Q4 2024, the slowest rate in 18 months, due to economic challenges and high interest rates. 

🏠 Decline in Kenya's Homeownership Rates

Kenya's homeownership rate has fallen from 64% in 2013 to 61% in 2024, driven by urban migration and rising rentals.

• Urban homeownership dropped from 30% to 23%, and rural ownership decreased slightly from 88% to 86%.

• Factors like high mortgage rates and limited affordability have hindered government housing initiatives, leaving Nairobi with an urban homeownership rate of just 7.7%.

💡 Tax Reform Proposals

Public finance experts, including KRA Chairman Ndiritu Muriithi, are advocating for a predictable tax regime to ease compliance and reduce public dissatisfaction.

• They propose eliminating the annual Finance Bill’s introduction of new tax measures, citing the need for long-term fiscal strategies to foster a stable tax environment.

📊 Shift in Treasury Bill Strategy

The National Treasury plans to phase out the one-year Treasury bill to reduce reliance on short-term debt and enhance monetary policy efficiency.

• The new strategy introduces one or two-year Treasury bonds as alternatives and focuses on reducing short-term securities' share in domestic debt.

💰 Tax Collection Shortfall

KRA missed its tax collection target by Ksh163.46 billion in the first half of the 2024/25 financial year, raising Ksh1.07 trillion against a Ksh1.23 trillion target.

• Despite a Ksh23.15 billion increase in collections compared to 2023, challenges persist with tax administration and public dissatisfaction over new levies.

📈 TransCentury's Recovery

TransCentury reported a Ksh375 million net profit for H1 2024, driven by factors such as a stronger shilling, tax credits, and a 12% revenue increase.

• The announcement boosted its share price by 31% to Sh0.72, though rising operating and finance costs remain a concern.

🌍 U.S. Withdrawal from WHO

The U.S. withdrawal from the WHO leaves a budget gap of over $1.2 billion, threatening critical health programs in Africa.

• Kenya is seeking alternative partnerships and focusing on strengthening domestic health financing to mitigate the impact.

💹 CBK Infrastructure Bonds

The CBK aims to raise Ksh70 billion through reopened 14-year and 17-year tax-free infrastructure bonds with attractive coupon rates of 13.938% and 14.399%.

• Investors have until February 12 to participate, supporting the government’s domestic borrowing goals for the 2024/25 fiscal year.

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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.

MONEY254 #MONEYTOK OF THE WEEK

𝐄𝐱-𝐇𝐨𝐭𝐞𝐥 𝐌𝐚𝐧𝐚𝐠𝐞𝐫 𝐅𝐢𝐧𝐝𝐬 𝐍𝐞𝐰 𝐂𝐚𝐥𝐥𝐢𝐧𝐠 𝐚𝐬 𝐚 𝐓𝐚𝐱𝐢 𝐃𝐫𝐢𝐯𝐞𝐫 𝐢𝐧 𝐍𝐚𝐢𝐫𝐨𝐛𝐢

Meet Linda, a single mother of two girls and a taxi driver in Nairobi. After the challenges brought on by the pandemic in 2019, Linda transitioned from her career in the hotel industry to becoming a hustler on Nairobi's streets.  With the support of a friend who helped her get her PSV badges and a car, Linda found flexibility in her work hours, which allowed her to balance motherhood and her job.

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

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Tony and the Money254 editorial team.