News and Analysis
December 21, 2025
Hello and welcome to the Money News Roundup Newsletter, where we cover the latest Cabinet decisions, including approval for the dualing of the Kiambu Road. We also cover 11 conditions set by the World Bank for Kenya.
The Cabinet approved the upgrading of the 23.5km Muthaiga–Kiambu–Ndumberi road to a four-lane dual carriageway to ease traffic between Nairobi and Kiambu.
According to a statement from State House, the project will include bypasses, non-motorised transport lanes, commuter facilities, access roads, and several bridges, improving capacity and cutting travel time for motorists. It was not immediatel clear where the bypasses would be positioned.
Citizen Digital reported that the project had stalled after KeNHA cancelled an earlier tender that drew criticism for limiting bids to Chinese firms, raising concerns over compliance with procurement laws.
The International Monetary Fund (IMF) has cautioned countries such as Kenya and Ethiopia against potential currency risks from converting dollar-denominated Chinese loans into yuan to lower debt costs.
While the move may reduce borrowing expenses, the IMF warned it could expose nations to new vulnerabilities if not managed carefully.
As reported by Bloomberg, the lender urged governments to integrate such conversions into broader debt and reserve management strategies that balance cost and risk.
Kenya’s conversion of Chinese railway loans has already saved $215 million (Ksh27 billion) annually, while Ethiopia is negotiating to restructure $5.38 billion in Chinese debt. Analysts note that yuan lending may compel countries to diversify reserves, posing challenges for smaller economies reliant on dollar-based trade.
Kenya will open three new embassies in Vatican City, Denmark, and Vietnam after Cabinet approval. The Vatican mission will strengthen ties with the Holy See, enhance collaboration on peace, climate action, and humanitarian work, and boost engagement with Catholic institutions that run thousands of schools and health facilities in Kenya.
As detailed by Nation, the embassies in Copenhagen and Hanoi aim to expand Kenya’s diplomatic reach, deepen trade, cultural, and development partnerships, and promote cooperation in renewable energy, climate resilience, technology, manufacturing, and agriculture.
The World Bank has outlined seven laws and four policy reforms Kenya must implement before it can access a pending Ksh96.9 billion ($750 million) loan under the Development Policy Operation (DPO).
As reported by the Business Daily, key conditions include amending the Competition Act to tighten regulation of dominant firms, allowing refugees to register for mobile services such as M-Pesa, adopting a policy to ease urban congestion by promoting rail transport, and establishing guidelines for sustainability-linked bonds.
The lender also wants full implementation of e-procurement and the Treasury Single Account (TSA) to curb corruption and consolidate all government accounts at the Central Bank of Kenya. In addition, Kenya must publish regulations for the Conflict of Interest Act, Social Protection Act, County Licensing procedures, and update ICT and forestry laws.
The disbursement delay follows earlier freezes when Kenya failed to pass conflict-of-interest and social protection laws, both now enacted. The World Bank insists the conditions are non-negotiable. Kenya expects Sh170.5 billion from the DPO this financial year, with a similar amount projected annually to 2030.
The push comes as Kenya weighs a new IMF programme, amid efforts to reduce reliance on multilateral lenders by shifting towards market-based and sustainability-linked financing.
A software developer has lost a Ksh1.1 billion payout after the High Court overturned an arbitration award that had found Safaricom used his ideas to develop the M-Pesa Super App and M-Pesa Business App.
Justice ruled that Samuel Wanjohi, through Popote Innovations, was not entitled to the compensation because there was no signed contract between him and Safaricom. The court found the arbitrator’s award was based on “speculative financial assumptions” and an unsigned agreement, which violated public policy and the principles of fairness and legality.
As reported by Business Daily, Wanjohi had argued that Safaricom dropped their 2018 partnership to build a joint payment solution dubbed Popote Pay, then used similar concepts in its M-Pesa apps. The arbitrator agreed, granting him Ksh39.2 million in damages and Ksh902.7 million in revenue share.
However, Safaricom maintained it never executed the partnership deal and only reimbursed Popote’s development costs under a 2020 settlement agreement, which settled all obligations. The court concurred, noting that Safaricom’s email acknowledging receipt of a draft contract did not amount to an agreement.
The judgment nullifies the award, relieving Safaricom of the Kshh1.1 billion liability even as M-Pesa continues to drive its earnings, with revenue rising 14% to Ksh88.1 billion.
SBM Bank Kenya has reported a Ksh283.41 million net profit for the nine months to September 2025, reversing a Ksh1.34 billion loss a year earlier. The lender’s net interest income rose 95.5 percent to Ksh2.76 billion, while non-interest income grew 29.8 percent to Ksh1.54 billion.
Operating expenses slightly declined to Ksh3.89 billion as staff costs remained flat at Ksh1.75 billion. CEO Bhartesh Shah credited the turnaround to disciplined execution of the bank’s strategy, customer-focused innovation, and digital expansion.
The profit marks a major recovery for SBM, which had closed 2024 with a Ksh1.07 billion net loss despite capital injections.
The Parliamentary Budget Office (PBO) has noted that the merger of 33 State-owned entities into 15 could save billions in recurrent spending, with the firms set to spend Ksh118.54 billion on salaries and allowances this financial year.
As reported in the Business Daily, the Parliamentary Budget Office (PBO) notes the highest budgets are at Helb (Ksh41.54 billion), KeRRA (Ksh22.1 billion), Universities Fund (Ksh17.26 billion), and KURA (Ksh10.4 billion).
The mergers aim to cut duplication, reduce reliance on Treasury bailouts, and lower costs through reduced staff, shared ICT, and joint procurement. Voluntary retirement will be offered, mainly to staff nearing age 60.
PBO warns of resistance over autonomy, loss of skilled staff, and political pushback.
The Cabinet also approved a waiver of interest and penalties on outstanding land settlement loans to ease the burden on low-income settlers. The move follows recommendations by the Land Settlement Fund Board, which noted repayment challenges caused by economic hardship and low farm productivity.
The waiver will benefit settlers in 520 schemes across 26 counties, covering Ksh12.3 billion. Beneficiaries will now access title deeds, use them as collateral, and regularize long-overdue land accounts. Read more.
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