Kenyan CEOs Face Ban From Employment & Jail Terms in New Rules

Hello and welcome to the Money News Roundup Newsletter, where we are covering new rules that may land CEOs in jail, looming cheaper electricity from three different sources, and Ksh30 billion tax-free gains for investors.

CEOs Stare at Seven-Year Jail Terms & Employment Ban

Chief executive officers (CEOs) running companies in Kenya risk serving jail terms or facing employment bans under new rules by the Financial Reporting Centre (FRC) aimed at curtailing terrorism activities.

The new guidelines require all companies to comply with the updated Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on Suppression of Terrorism) Regulations.

According to Business Daily, the rules require banks, insurance firms, casinos, accountants, real estate agents, and dealers in precious stones, among others, to immediately freeze funds and other assets belonging to individuals or entities listed under the UN resolutions on terrorism financing and the proliferation of weapons.

“Any person, including reporting institutions, should report any funds or assets frozen or any other action taken in compliance with the relevant prohibition requirements, including attempted transactions, within 24 hours. Reporting institutions are subject to supervision on targeted financial sanctions implementation, and in case of non-compliance the relevant supervisory authority (FRC, relevant supervisory body or self-regulatory body) can apply enforcement actions,” the rules state.

The penalties: If found in breach, individuals may face a warning letter, a Ksh3 million fine, a ban from employment in their sector, jail terms, suspension or restriction of firms in a specific activity, or cancellation of operating licenses.

Catch Up Quick: By December 2024, Kenya had foiled 47 terror attacks in two years, while a report implicated Non-Profit Organisations (NPOs) in funding terror activities through diversion of legitimate resources, raising funds for terrorists, developing operational relationships with employees, or concealing the movement and distribution of funds.

Cheaper Electricity for Kenyans in Geothermal and Nuclear Power Plans

Kenya will inject an extra 53 megawatts of geothermal power into the national grid by June 2026 at an average cost of Ksh8.9 per kilowatt-hour, making it the country’s third-cheapest source of electricity after hydropower and imports from Ethiopia, Business Daily reports. The additional capacity will come from the expansion of Olkaria I and OrPower 22 plants as the government pushes to lower power costs for households and businesses through renewable energy.

Meanwhile, Kenyans.co.ke reports that the government is accelerating plans to add nuclear power to the national grid in a move that could further reduce power costs. Energy Permanent Secretary Alex Wachira revealed that the government is moving to the second phase of nuclear development, with a target to have nuclear power on the grid by 2034.

Bond Investors Reap Ksh30B Tax-Free Interest

Investors are saving about Ksh30.7 billion in taxes each year from interest earned on infrastructure bonds (IFBs), which have surged in popularity due to their tax-free status and higher coupons compared to ordinary bonds, Business Daily reports.

IFBs now account for 41 percent of the government’s Treasury bond portfolio, up from 30 percent at the end of 2022, with their total value more than doubling to Ksh2.2 trillion.

The bonds, which carry tenors of between six and 25 years and coupons as high as 18.46 percent, have seen massive uptake, with recent issuances raising over Ksh200 billion each amid strong demand. Retail investors, including Saccos, self-help groups, and individuals, have also sharply increased their holdings, now controlling Ksh888.5 billion worth of government debt compared to Ksh288 billion in December 2022.

Ruto Launches Ksh6B Mombasa Commuter Rail to Ease SGR Transfers

President William Ruto on Wednesday, September 17, launched a new commuter train service linking the Standard Gauge Railway (SGR) terminus in Miritini to the Mombasa CBD. Developed at a cost of Ksh6 billion, the service will charge Ksh50 per trip and is expected to ferry about 5,000 passengers daily. This offers commuters a far cheaper option compared to matatus that charge between Ksh300 and Ksh400 and taxis that cost up to Ksh1,000 for the same stretch, Money254 reports.

The new link will also serve residents of Changamwe, Shimanzi, Mazeras, and surrounding areas, with Kenya Railways introducing a ‘park and ride’ facility for 100 vehicles. Kenya Railways board chairman Abdi Bare noted that the trains will be synchronized with the Madaraka Express to provide seamless last-mile transport, while President Ruto emphasized that the project is part of a wider plan to modernize Kenya’s railway system, according to Money254.

Nairobi Cuts Ksh39.8B in Pending Bills Amid Fraud Concerns

Nairobi County has slashed Ksh39.8 billion from its pending bills following an audit, raising questions over possible fake supplies that have previously cost City Hall billions. The Controller of Budget (CoB) reported that Nairobi’s supplier arrears dropped from Ksh121.8 billion to Ksh86.8 billion in the year to June, a 32.7 percent reduction that contributed to a nationwide dip in county pending bills. However, CoB Margaret Nyakang’o flagged the unexplained drop and demanded Nairobi explain how it reconciled its books, warning that inflated legal fees, a disputed bank loan, and questionable liabilities were among the items struck off.

Despite the purge, Nairobi still holds the largest stock of unpaid supplier arrears at Ksh86.8 billion, followed by Kiambu and Machakos, with total county debts standing at Ksh176 billion. Business Daily reports that the audit comes against the backdrop of widespread corruption, with past investigations exposing ghost suppliers, doctored invoices, and fraudulent payments at City Hall. Suppliers across the country continue to decry delayed payments, with many small businesses facing blacklisting, loan defaults, and asset seizures due to years of government arrears.

TSC Sets New Academic Rules for School Principals and Deputies

The Teachers Service Commission (TSC) has introduced new rules requiring secondary school principals and their deputies to hold a master’s degree in a relevant field under the Competency Based Education (CBC) framework. Head teachers and deputies in primary schools must now have at least a bachelor’s degree in education. Teachers seeking promotion will also need three years of service as deputy heads or in equivalent roles, completion of Teacher Professional Development (TPD) modules, and compliance with Chapter Six of the Constitution, Daily Nation reports.

Previously, a master’s degree was not compulsory for principals or deputies, though it gave an edge to those promoted to chief principals of national schools at job group D5. There are currently about 100 such principals. For deputy head roles in post-primary institutions, a bachelor’s degree remains the minimum requirement, alongside proven teaching competence and leadership experience.

African Manufacturers Push for Extension of U.S. Duty-Free Trade Deal

African manufacturers are lobbying the U.S. Congress for a one- to two-year extension of the African Growth and Opportunities Act (AGOA), a duty-free trade programme set to expire at the end of September. The initiative, launched in 2000 under President Bill Clinton, provides African nations with duty-free access to the U.S. market for thousands of products. Its future has been clouded by President Donald Trump’s tough tariff policies, raising fears over the survival of a scheme credited with supporting hundreds of thousands of jobs in sectors like textiles, automotive, and mining.

According to Reuters, delegations from Kenya and four other AGOA beneficiary countries visited Washington last week to press for the extension. Among those lobbying was Pankaj Bedi, chairman of apparel maker United Aryan, which supplies major U.S. retailers such as Target and Walmart. U.S. lawmakers have long viewed AGOA not just as a trade initiative but also as a strategic tool to counter China’s growing influence in Africa.

Court Upholds CMA Cap on Cytonn Investments

The High Court has upheld a Capital Markets Authority (CMA) directive that limited investments by Cytonn Asset Managers and the Cytonn High Yield Fund to 10 percent of their portfolios in Cytonn-related projects. Justice Helene Namisi dismissed a petition by Cytonn CEO Edwin Dande challenging the June 2020 restrictions, ruling that the case was prematurely filed and should first have gone to the Capital Markets Tribunal. She said the tribunal, being a specialised body of experts in capital markets law and finance, was the proper forum to resolve technical regulatory disputes.

According to Business Daily, the CMA argued the restrictions were necessary to protect investors, citing concerns that Cytonn entities owed investors Ksh5.7 billion and were under investigation for regulatory violations. Mr Dande had accused the regulator of harassment and inconsistent application of rules, but the court found no exceptional circumstances to bypass the administrative process. Justice Namisi warned against turning routine regulatory issues into constitutional disputes, stressing that proper judicial sequence must be followed.