Kenya Hits 10-Year Low on Development Spending as Govt Breaks Borrowing Laws

Hello and welcome to the Money News Roundup, where we cover the latest data on government expenditure on borrowed loans. We also cover the latest updates from Safaricom's CEO on plans to split the company.

Kenya’s Debt Now Funding Salaries Over Development, Treasury Data Reveals

As reported in the Business Daily, the share of Kenya’s borrowed funds allocated to development projects has dropped to its lowest level in over a decade, revealing increased use of debt to cover recurrent expenses like salaries and pensions. 

Treasury data shows that in the fiscal year ending June 2025, Ksh582.9 billion (56.4% of the Ksh1.03 trillion borrowed) was spent on development, while Ksh451.3 billion (43.6%) went to recurrent spending. 

This contravenes the Public Finance Management Act, which mandates that borrowing be used solely for development. The previous year saw a lower figure of 33.2% of borrowed funds used for recurrent expenditure.

The shift stems from underutilization of development funds and increased domestic borrowing. Since 2017, the government has repeatedly flouted borrowing rules, with development spending persistently falling short. 

In contrast, the wage bill has surged to Ksh624.7 billion in 2025 from Ksh274.4 billion in 2013. Recurrent expenditure has risen 3.6 times since 2013, while development spending only grew 1.9 times.

Over the same period, national debt ballooned from Ksh1.85 trillion to Ksh11.81 trillion, driving annual interest payments up to Ksh995.1 billion. 

Safaricom CEO Speaks on Proposal to Split Telco

Safaricom CEO Peter Ndegwa has stated that the government is yet engaged Safaricom’s board on a proposal to split the company into three entities: telecommunications, M-Pesa, and a tower operator.

While Treasury Secretary John Mbadi has hinted at the move as a way to raise revenue, Ndegwa stated any restructuring would be board-led. 

As reported by Bloomberg, Ndegwa emphasized that Safaricom’s success lies in the integration of its telecom and mobile-money services. 

M-Pesa, which contributes over 40% of revenue, already operates independently within the company. The government, which owns 35%, may also sell shares. Safaricom’s 2008 listing raised Ksh51.7 billion, the most successful privatization to date in country.

DStv Loses 1M Customers in a Year

Over 84% of active DStv customers in Kenya dropped off in the year to June 30, driven by high subscription costs and economic hardship, pushing many to illegal streaming sites. 

Data from the Communications Authority of Kenya (CA) shows active DStv subscribers fell from 1.19 million to 188,824. 

As reported in the Business Daily, MultiChoice Kenya, which operates DStv, raised package prices by up to Ksh500 in November 2024 and again by up to Ksh700 in August 2025. For instance, the DStv Premium package increased from Ksh10,500 to Ksh11,700 within nine months. 

These hikes come amid stagnant incomes, forcing households to cut non-essential expenses. MultiChoice has raised prices five times in three years, struggling to maintain revenue in the face of rising digital competition and customer churn.

Why Isle of Man is Becoming Top Destination for Kenya Investors

Kenyan investments abroad surged from Ksh245 billion in 2022 to Ksh350 billion in 2023. A significant portion, Ksh79.8 billion, was channeled into the Isle of Man, a self-governing British Crown Dependency, making it the top destination for Kenyan foreign investment.

Citizen Digital reported that this remarkable inflow, a jump from zero in 2022, is attributed to the island's favorable financial environment.

The Isle of Man offers a zero percent corporate tax rate for most companies and a stable legal system based on British laws, providing strong protection for assets. 

This shift indicates a growing preference among Kenyan investors for globally connected financial environments.

Bolt to Introduce Parcel Delivery in Mombasa and Kakamega 

As reported by Business Daily, Bolt plans to expand its parcel delivery service, Bolt Send, to Mombasa, Kakamega, and other towns to tap into growing e-commerce market. 

Currently operating in Nairobi, Bolt Send is integrated into the main Bolt app, allowing users to book deliveries like rides, with real-time tracking and pricing based on distance and demand.

Country Manager Dimmy Kanyankole confirmed the phase-two rollout, maintaining the door-to-door model. Intercity deliveries may follow based on demand. 

Billionaire John Kibunga Becomes 3rd Largest Shareholder at Centum

Billionaire John Kibunga Kimani has increased his stake in Centum Investment Company to 11.06%, making him the third-largest shareholder.

In August, he raised his holdings to 73.6 million shares, valued at Ksh1.06 billion. This follows a March 2024 purchase of 27.9 million shares, which increased his stake from 6.87%.

Kimani is also a significant investor in other firms, holding a 33.35% stake in Kakuzi, making him the second-largest shareholder. His Safaricom shares are valued at Ksh899.2 million, and he also owns Kenya Airways shares. Read more.