Cabinet Approves Kiambu Road Expansion and New Pricing for Govt Projects

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. 

‍Cabinet Approves Dualling of Kiambu Road

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. 

The project will include bypasses, non-motorised transport lanes, commuter facilities, access roads, and several bridges, improving capacity and cutting travel time for motorists. 

‍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.

‍Cabinet Approves New Pricing Framework for Projects 

The Cabinet sitting on Tuesday approved a new pricing framework that aims to standardize the pricing of public infrastructure projects and curb inflated costs. 

The Cabinet approved a “Comprehensive Framework for Infrastructure Projects Pricing,” introducing a data-driven system that replaces Kenya’s precedent-based budgeting method. 

Drawing from the UK, Australia, and Singapore, the framework uses fundamental inputs—materials, labour, equipment, and local conditions—to determine project costs.

As detailed by the Business Daily, the reform targets projects such as roads, bridges, dams, and power plants, and is expected to cut cost overruns by up to 25 percent. 

The move follows audits revealing major projects, including Kenol-Sagana-Marua and Mombasa-Mariakani roads, overshot budgets by billions due to poor design, land acquisition delays, and flawed Variation of Price formulas.

Cabinet Waives Interest and Penalties on Land Settlement Loans

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.

Cabinet’s Decision on County Funding 

As reported in the Star, the Cabinet approved the Public Finance Management (Amendment) Bill, 2025, which is aimed at speeding up funding to counties.

The Bill splits the County Governments' Additional Allocations Bill into two: one for allocations from the National Government’s share of revenue and another for donor-funded loans and grants. 

This is expected to reduce bureaucratic delays, ensure timely disbursements, and improve service delivery. The reform also seeks to enhance coordination between national and county treasuries and promote accountability in resource use. 

‍Cabinet’s Approval of New Embassies

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. 

11 Conditions Set By World Bank for Kenya Before Accessing Ksh96B Loan

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.

Merging 33 State Agencies to Save Ksh118bn in Wage Costs - Budget Office

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. 

SBM Bank Kenya Records Ksh283 Million Profit After Year of Losses

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.