News and Analysis
May 20, 2026
Hello and welcome to the Money News Roundup Newsletter, where we cover Kenya’s drop in the latest IMF rankings of Africa’s largest economies. We also break down matatu operators’ demand for fuel price cuts.
Kenya has dropped to the 7th largest economy in Africa after Angola overtook it in the latest rankings released by the International Monetary Fund (IMF).
As reported by Kenyans.co.ke, Kenya’s Gross Domestic Product (GDP) rose from Ksh18.14 trillion (USD 140 billion) in January to Ksh19.1 trillion (USD 147.26 billion). Despite the growth, Angola reclaimed the 6th position with a GDP of Ksh19.74 trillion (USD 152.35 billion), pushing Kenya one place down.
South Africa remains Africa’s largest economy with a GDP of Ksh62.2 trillion (USD 479.96 billion), followed by Egypt at USD 429.65 billion and Nigeria at USD 377.37 billion. Algeria ranks fourth with USD 317.17 billion, while Morocco closes the top five at USD 194.33 billion.
Within East Africa, Kenya still maintains the lead, followed by the Democratic Republic of Congo with a GDP of Ksh15.99 trillion (USD 123.41 billion) and Ethiopia at Ksh15.74 trillion (USD 121.53 billion).
Tanzania’s GDP was put at Ksh12.3 trillion (USD 94.89) and Uganda at Ksh9.5 trillion (USD 73.37 billion).
Matatu operators are demanding a Ksh46 reduction in diesel prices as the seven-day suspension of their planned strike nears expiry.
As reported by Nation, transport sector stakeholders say the Ksh10 reduction announced by the government is insufficient and insist they will only call off the strike if the remaining Ksh36 cut is implemented.
The operators are also demanding fuel liberalisation, the disbandment of the Energy and Petroleum Regulatory Authority (EPRA), the return of fuel subsidies and an end to alleged bribery by traffic police officers.
Matatu Owners Association chairperson Albert Karakacha said rising fuel prices, expensive spare parts, taxes and loan repayments are hurting the sector.
The government is expected to hold further talks after President William Ruto returns from an official trip to Kazakhstan.
In the current pricing cycle, Diesel is retailing at Ksh232.86, while Petrol retails at Ksh214.25 per litre.
KRA is seeking powers to tax at least 60 percent of unexplained retained earnings under proposed amendments in the Finance Bill 2026 aimed at curbing tax avoidance.
As reported by the Business Daily, the proposal targets companies that fail to justify why profits were not distributed to shareholders as dividends. Local shareholders pay a 10 percent withholding tax on dividends, while foreign investors pay 15 percent.
Under the changes, if KRA assesses Ksh1 billion as unexplained retained earnings, it could tax a minimum of Ksh600 million.
Tax experts warn the proposal could expose firms to higher taxes and pressure companies to issue dividends even when they need funds for expansion, debt repayment or business stability.
Analysts also fear the changes could discourage reinvestment and force firms to rely more on borrowing.
Banks expect the Central Bank of Kenya (CBK) to raise its benchmark lending rate(currently 8.75%) next month as inflation and fuel prices continue to rise.
As reported by the Business Daily, the Kenya Bankers Association said higher consumer prices and pressure on the Kenya shilling could force CBK to increase the Central Bank Rate (CBR) for the first time since February 2024.
Inflation rose to 5.6 percent in April, the fastest pace in seven years, following global oil price shocks linked to the Iran conflict.
A higher CBR could increase borrowing costs, slow private sector credit growth
NCBA Group posted a net profit of Ksh6 billion in the first quarter of 2026, marking a nine percent increase from Ksh5.5 billion recorded during the same period last year.
As reported by Capital Business, the lender attributed the growth to higher operating income, increased customer deposits and expansion in digital lending despite a sharp rise in provisions for bad loans.
Profit before tax rose to Ksh7.4 billion, while operating income increased by 15 percent to Ksh20 billion. Customer deposits grew to Ksh544 billion as total assets hit Ksh741 billion.
NCBA said digital loan disbursements rose by 27 percent to Ksh391 billion during the quarter.
In related news, KCB Group posted profit after tax of Ksh17.8 billion in Q1 of 2026. Its pre-tax profit of Ksh24.4 billion for the first quarter ended March 2026, marking a 15.3 percent increase from Ksh21.2 billion recorded during the same period last year.
As reported by the Standard, the lender attributed the growth to higher operating income, strong subsidiary performance and increased customer deposits despite a tough business environment.
Total operating income rose by 8.5 percent to Ksh53.6 billion, while the balance sheet expanded to Ksh2.3 trillion. Customer deposits also grew by 15.7 percent to Ksh1.7 trillion.
KCB said subsidiaries outside Kenya contributed nearly 30 percent of total earnings. The Group also reported improved asset quality, with non-performing loans declining to Ksh217.8 billion from Ksh233.3 billion recorded last year.
BasiGo has started local production of electric vans retailing at Ksh5.8 million as demand grows from public transport operators and schools.
As reported by Business Daily, the company began assembling 23 units last month at the Associated Vehicle Assemblers (AVA) plant in Mombasa and plans to produce at least 120 units by the end of the year.
BasiGo CEO Moses Nderitu said the 18-seater vans offer more flexibility compared to buses and are suitable for schools, PSVs, corporates and government institutions.
The government has launched a nationwide crackdown on milk hawking, warning that the unregulated sale of raw milk poses serious health risks and undermines Kenya’s formal dairy sector.
As reported by Eastleigh Voice, Agriculture CS Mutahi Kagwe said milk sold outside regulated systems cannot be traced or tested, exposing consumers to diseases and poor-quality products. The crackdown is part of broader dairy reforms that include the distribution of 230 bulk milk coolers worth Ksh1.43 billion to cooperatives nationwide.
As reported by the Business Insider, African exporters have regained duty-free access to the US market after the African Growth and Opportunity Act (AGOA) was extended through 2026.
President Donald Trump signed a proclamation restoring tariff-free trade benefits for eligible African countries after the programme briefly lapsed in late 2025, creating uncertainty for exporters.
The renewed framework allows African nations to continue exporting products such as textiles, agricultural goods and manufactured products to the US without import duties.
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