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

This Week in Money News: Kenyan banks have blocked a proposed system integration that would allow the Kenya Revenue Authority to access customer data in its bid to curb tax evasion.

Meanwhile, significant shifts are underway in Kenya’s financial sector as reforms, budget challenges, and infrastructure projects take center stage. From major health sector reforms to increased debt burdens and funding strategies, the news highlights both fiscal pressures and initiatives.

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

🏥 SHA Reforms

The Ministry of Health announced major reforms to the Social Health Authority (SHA) on Feb 18 after public outcry over implementation issues.

• Reforms include a targeted campaign to boost Social Insurance Fund (SHIF) contributions from self-employed and unemployed Kenyans by tracking mobile money transactions, electricity bills, vehicle records, and tax returns.

• Kenyans with irregular incomes will be allowed to use loans from the Hustlers Fund under Insurance Premium Financing (IPF).

• ICU funding is set to rise from Ksh4,448 to Ksh28,000 per day, and cancer treatment coverage may increase from Ksh400,000 to Ksh550,000 per household per year.

• SHA officials claim these changes were driven by the State House without proper consultation.

💰 Treasury Overdraft Surge

The Treasury borrowed Ksh27.8 billion from the Central Bank of Kenya (CBK) last week—the largest weekly overdraft since December—to manage cash flow pressures.

• This borrowing pushed the government's outstanding overdraft to Ksh63.05 billion, which is 1.06% of domestic debt, with interest charged at a CBK rate recently lowered to 10.75%.

• Overdraft costs surged 87% in the fiscal year ending June 2024 amid declining revenue flows.

• Kenya’s domestic debt now stands at Ksh5.95 trillion, raising concerns over CBK reliance.

🏦 KRA Data Access Dispute
Kenyan banks have blocked a system integration that would allow the Kenya Revenue Authority (KRA) to access customer data, a move aimed at curbing tax evasion that has sparked fierce opposition from bankers.

• Legal Backing: Empowered by a December legal amendment, the KRA wants access to 38 banks’ systems.

• Bankers’ Concerns: Banks argue the integration lacks legal safeguards and could violate data protection laws.

• Past Setbacks: The Treasury’s previous attempt to grant KRA unfettered access via the Finance Bill 2024 was dropped following mass protests.

• Alternative Measures: Despite the block, the KRA continues to leverage various databases—bank statements, car ownership records, and utility bills—to track tax compliance.

🛣️ Usahihi Expressway Financing

Everstrong Capital aims to raise Ksh129.2 billion from Kenyan pension funds to finance the 440-kilometre Usahihi Expressway, part of a $3.5 billion project connecting Nairobi and Mombasa.

• Construction is slated to begin in December 2025 through a Public-Private Partnership (PPP) with the Kenya National Highways Authority (KeNHA).

• Experts doubt whether pension funds, which have grown to Ksh2 trillion by mid-2024, will commit such large exposures due to their conservative strategies.

• The funding gap may be filled by commercial banks, Saccos, unit trusts, high-net-worth investors, green bonds, and climate finance, with toll fees to recoup construction costs.

🚗 Road Tolling Revival

The government has revived its plan to impose tolls on major roads to address a critical funding gap in road maintenance and development.

• The draft Road Tolling Policy 2025, open for public consultations from Feb 24, targets an annual maintenance need of Ksh253 billion and a development shortfall of Ksh5.146 trillion over the next decade.

• Current collections from the Road Maintenance Levy Fund fall short at Ksh100 billion, and a recent High Court ruling lifted bans on tolling key highways like the Thika Superhighway and Nairobi Southern Bypass.

• The policy includes proposals for toll discounts to ease the burden on motorists.

📊 Rising Public Debt

Kenya's public debt has now exceeded Ksh12 trillion, with Ksh1.85 trillion earmarked for repayment in the 2024/25 financial year.

• Between September and December 2024, the government borrowed an average of Ksh572 million daily, totaling Ksh68.7 billion.

• Loans were secured from China, Italy, Germany, and France for road projects across multiple counties, with some loans extending repayment to 2045.

• This has raised concerns over the nation's growing debt burden.

🩺 Intern Doctors' Pay Cut

The Ministry of Health will reduce intern doctors' monthly pay from Ksh206,000 to Ksh70,000 starting July 2025, affecting 1,247 interns.

• This move follows an advisory from the Salaries and Remuneration Commission and a ruling by Lady Justice Maureen Onyango, aimed at fitting intern costs within the approved budget under the Public Finance Management Act.

• The Kenya Medical Practitioners Pharmacists and Dentists Union (KMPDU) has issued a 30-day strike notice, with demonstrations set for March 18, 2025, condemning the cut as a step backward for healthcare funding.

👨‍⚖️ Pay Increase for Top Officials

The President, Deputy President, and top judges will see pay increases starting July, with the top two offices' annual salaries rising from Ksh36 million to Ksh42 million.

• Judges' salaries are set to increase by Ksh500 million, bringing their total pay to Ksh3.6 billion.

• This decision comes as the government pushes for budget cuts and revenue mobilization to manage a rising public wage bill, which now stands at Ksh1.7 trillion, while other state officers’ salaries remain unchanged.

• Concerns are mounting over Kenya’s escalating wage bill, which is nearing Ksh2 trillion.

🏠 Kuscco Property Auctions

The interim management of Kuscco has launched an auction for 80 houses and plots across Kitengela, Kisumu, and Thika to recover loans from defaulting members.

• Acting MD Arnold Munene stated that properties will be sold at no less than 75% of their market value as part of efforts to recover funds under the Kuscco Housing Fund, which launched a Ksh1.5 billion real estate project in 2013.

• A PwC forensic audit revealed years of mismanagement and diverted payments, plunging Kuscco into a Ksh12.5 billion insolvency and leading to the arrest of several former top officials.

• As of December 2023, Kuscco had a loan balance of Ksh3.93 billion across 1,962 members, with further auctions expected as legal processes continue.

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MONEY TIPS & TOOLS

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.