Govt Says Housing Levy Contributions Not Enough, Seeks More Taxpayer Funds 

Hello and welcome to the Money News Roundup Newsletter, where we break down PS Charles Hinga’s remarks on why Housing Levy collections are still insufficient to fund the government’s affordable housing targets. We also cover the latest court ruling stopping Tanzania from imposing excise tax on Kenyan-made matchboxes.

Govt Says Housing Levy Contributions Not Enough, Seeks More Taxpayer Funds 

Housing PS Charles Hinga has stated that collections from the 1.5% Housing Levy are insufficient to support the government’s target of building 200,000 houses annually.

As reported by NTV, Hinga noted that the government requires about Ksh400 billion each year to meet the target, yet the Housing Levy currently generates only about Ksh100 billion annually.

As a result, the State Department for Housing is seeking an additional Ksh150 billion allocation in the 2026/2027 Budget.

The Kenya Kwanza administration introduced the 1.5% Housing Levy to help finance the construction of affordable housing projects across the country. 

Official data by the Kenya National Bureau of Statistics (KNBS) shows that 6,738 housing units valued at Ksh 7.2 billion had been completed in 2025 compared to 1,655 housing units valued at Ksh 4 billion in 2024. 

Treasury Wants VAT on M-Pesa and Other Payment Platforms

The National Treasury is seeking to introduce a 16 per cent Value-Added Tax (VAT) on Kenya’s 42 payment service providers, including M-Pesa, Airtel Money and Pesapal, a move likely to raise money transfer charges for consumers.

Treasury Director-General for Budget Albert Mwenda told the Business Daily that the VAT would apply to companies supplying ICT services that facilitate payments, including tills and paybills, and not directly to customers. 

However, analysts say the cost will ultimately be passed to users through higher transaction fees.

Tax experts have also warned the proposal could slow digital payment growth and hurt low-income Kenyans who rely heavily on mobile money services. 

Safaricom has previously opposed similar tax proposals, arguing they disproportionately affect users without access to traditional banking.

M-Pesa currently has 37.91 million users in Kenya and processed 46.4 billion transactions worth Ksh41.7 trillion in the year to March 2026. Safaricom earned a record Ksh182.7 billion from M-Pesa during the period.

Mohammed Dewji Invests Ksh6.5 Billion in Mombasa as Regional Court Rules Against Tanzania

Tanzanian conglomerate MeTL Group, owned by wealthy businessman Mohammed Dewji, plans to invest Ksh6.5 billion ($50 million) in a soft drinks plant in Mombasa, marking its first major expansion into Kenya and setting up competition with Coca-Cola and PepsiCo in the local market.

As reported by the Business Daily, the plant, expected to break ground within 12 months, will produce MeTL’s beverages including Mo Cola, Mo Xtra and Mo Malto.

Dewji said the company aims to target low-income consumers through cheaper products, with a 300ml bottle of Mo Cola expected to retail at about Ksh15 compared to the industry average of Ksh40.

Dewji said Kenya remains attractive due to its position as East Africa’s largest economy.

Besides beverages, MeTL is also exploring investments in Kenya’s energy and hospitality sectors, including power production and hotel construction.

According to Forbes, Dewji is the richest man in East Africa with an estimated net worth of Ksh271 billion.

He becomes the latest Tanzanian businessman to make a major expansion into Kenya. In 2024, Amsons Group, associated with Tanzanian tycoon Edha Nahdi, acquired a majority stake in Bamburi Cement in a deal valued at Ksh23.5 billion. Nahdi has also bought a significant equity stake in EAPC estimated at Ksh 718 billion. 

Earlier in the year, Tanzanian businessman Rostam Aziz acquired a controlling stake in the Nation Media Group at an undisclosed sum. Aziz has also expanded in Kenya through Taifa Gas. 

Still in Tanzania, the East African Court of Justice has temporarily barred Tanzania from collecting excise duty on Kenyan-made safety matches, in a case that could shape future trade disputes within the East African Community.

As reported by Capital Business, the court issued an interim injunction preventing the Tanzania Revenue Authority from enforcing a Tsh400 (Ksh19.85)-per-kilogram excise levy introduced under Tanzania’s Finance Act 2025 on imported Kenyan safety matches.

The order, issued by the court’s First Instance Division in Arusha, will remain in force until a case filed by Match Masters Limited is fully heard and determined.

Judges noted the dispute raises concerns over discriminatory taxation against imported goods, which could violate EAC trade regulations. 

Uganda Plans First Sukuk Bond to Fund Ksh409 Billion SGR Project

Uganda is in advanced stages of issuing its first sovereign Sukuk bond to help finance the Ksh409.16 billion (€2.7 billion) Standard Gauge Railway (SGR) project aimed at improving regional connectivity in East Africa.

The Islamic bond will finance 15 per cent of the railway project, while Export Credit Agencies and Development Finance Institutions will cover the remaining costs.

As reported by Eastleigh Voice, Uganda’s Deputy Secretary to the Treasury Patrick Ocailap is leading a regional investor roadshow across Kenya, Tanzania and Zanzibar to attract interest ahead of the issuance.

The SGR network is expected to connect Mombasa to Kampala through Malaba before extending to Rwanda and the Democratic Republic of Congo.

Uganda has already started work on the 270-kilometre Malaba-Kampala section and appointed Citibank as lead arranger for the financing.

Kenya is also exploring plans to electrify its existing SGR line to support regional integration.

TRIFIC Launches Ksh4.8 Billion Dollar-Denominated Green REIT

The Two Rivers International Finance and Innovation Centre (TRIFIC) has launched a Ksh4.8 billion ($37.3 million) green, dollar-denominated Income Real Estate Investment Trust (I-REIT) to finance commercial real estate expansion within its Nairobi special economic zone.

As reported by Capital Business, the offer opened on May 13 and will close on June 12, with proceeds set to fund the acquisition of the TRIFIC North Tower and support the construction of more green-certified office towers.

TRIFIC said the REIT targets both institutional and retail investors seeking stable foreign currency returns from export-oriented businesses operating within the zone. The minimum investment has been set at Ksh129,000 ($1,000).

The REIT is expected to list on the Nairobi Securities Exchange on June 23.

The TRIFIC North Tower, currently 92 per cent occupied, hosts multinational firms including technology companies, outsourcing firms and professional service providers operating in Kenya’s growing global services sector.

Co-op Bank Posts Record Ksh11.37 Billion Q1 Profit

Co-operative Bank of Kenya has reported a record pre-tax profit of Ksh11.37 billion for the first quarter ending March 2026, marking an 18.1 per cent increase from Ksh9.63 billion posted during the same period last year.

As reported by Kenyans.co.ke, Profit after tax rose by 21.3 per cent to Ksh8.41 billion, which the lender described as its strongest quarterly performance ever.

The bank said the growth was driven by gains under its 2025–2029 “Good to Great” strategy. Total assets increased by 14.3 per cent to Ksh884.6 billion, while customer deposits grew 16.6 per cent to Ksh612.2 billion.

Net loans rose to Ksh436.8 billion, while operating income climbed 13.6 per cent to Ksh24.05 billion.

The lender also reported strong subsidiary performance, with Kingdom Bank and Co-optrust Investment Services posting significant profit growth during the quarter.

Mogo Expands to 36 Counties

Mogo Auto Limited expanded operations to 36 counties in 2025 as demand for motorcycle financing among informal workers continued to rise.

According to the company’s latest ESG report, motorcycle loans remain its core business, serving over 42,500 customers with most loans supporting income-generating activities in the boda boda and delivery sectors.

As reported by the Kenyan Wall Street, Mogo said 93 per cent of motorcycle-financing customers are self-employed, while about 75 per cent of all customers earn income through informal activities.

Parent company Eleving Group reported a 34.6 per cent rise in revenue from flexible vehicle financing products to Ksh2.8 billion,  driven largely by Kenya’s boda boda market.

The lender also issued over 100,000 smartphone loans and financed more than 240 electric motorcycles as it expanded digital lending and asset recovery systems across Kenya.