News and Analysis
October 16, 2026
Hello and welcome to the Money News Roundup Newsletter. Today, we cover the revised PAYE tax relief proposal ahead of a November Bill and the delays in transferring Hustler Fund pension savings to KNEST.
Treasury CS John Mbadi has revealed that the PAYE tax exemption will be increased from the previously proposed Ksh30,000 to Ksh32,800.
As reported by the Star, speaking during the Mashujaa Day 2026 Economy Thematic Week in Eldoret, Mbadi maintained that plans were still underway to introduce the proposed Bill in Parliament in November 2026.
He said the proposed amendment would ease financial pressure on low-income households.
"Because the economy has shown signs of improving, those Kenyans who are earning Ksh32,800 and below- why don’t we tell them to take all their salary and go?" the CS posed.
"That is an improvement from the Ksh30,000 we talked about,” Mbadi said.
While the CS revealed the increment for the lower-income earners, he did not highlight whether the increase would affect other salary bands.
From the initial plan, the government had proposed that no tax would be applied on the first Ksh30,000 of a salary while the next Ksh20,000 be taxed at 25%.
The proposed PAYE cuts were initially scheduled to be tabled in Parliament in February. However, the government postponed the proposal to the Finance Bill, which was only two months away at the time.
Billions of shillings deducted from Hustler Fund loans remain outside the Kenya National Entrepreneurs Savings Trust (KNEST), exposing a regulatory gap affecting retirement savings for informal-sector workers.
As reported by Nation, borrowers contribute 5% of their loans to savings, with 70% of the deductions earmarked for long-term pension savings and 30% for short-term savings.
The National Treasury reported that the voluntary pension programme mobilised just Ksh14.06 million in the year ended June 2026, against a target of Ksh3.6 billion, blaming the shortfall on the failure to transfer pension savings to KNEST.
Financial Inclusion Fund CEO Henry Tanui said existing regulations do not recognise KNEST, preventing remittances until the rules are amended.
Meanwhile, Hustler Fund savings reached Ksh5.8 billion by June 2026, although the amount attributable to pension savings remains unclear.
The government has launched a physical headcount of public servants, beginning with the Ministry of Education on October 19, 2026, amid investigations into suspected Ksh6.2 billion payroll fraud.
Nation reports that a memo dated October 16 directs employees to present original identification documents, KRA PIN certificates and appointment letters for verification through Wednesday, October 21. Employees who fail to undergo the exercise risk having their salaries stopped.
Public Service Cabinet Secretary Geoffrey Ruku said 84 human resource officials from the Kenya Prisons Service, police and Health Ministry had been implicated and barred from accessing the payroll system.
The officials must step aside for 30 working days as investigators examine suspicious payments, shared bank accounts and irregular employment records.
Kenya plans to break ground for a Ksh80 billion nuclear research reactor at Konza Technopolis in 2027. The project will be undertaken through a PPP.
As reported by KBC, Science, Research and Innovation PS Shaukat Abdulrazak said the facility would train engineers, technicians and scientists ahead of the country's nuclear power ambitions.
The reactor will also enable local production of molybdenum-99, used to manufacture radioisotopes for cancer diagnosis and treatment.
Nuclear Power and Energy Agency CEO Justus Wabuyabo said construction of a separate 2,000-megawatt nuclear power plant in Siaya is expected to begin in 2027, with electricity generation targeted for 2034.
Average MMF gross returns fell to 9.3% by October 15, 2026, from 9.9% a year earlier, reflecting declining interest rates on Treasury bills and bank deposits.
The Business Daily reports that of 26 funds tracked, 20 recorded lower annualised returns, while only six posted increases. Funds offering double-digit returns declined to 13 from 14.
Meanwhile, investors are shifting towards Special Funds, which offer exposure to alternative assets but carry higher risks.
Special funds’ share of collective investment scheme assets rose to 26.6% in June 2026, while MMFs’ share fell to 48.5%, signalling growing demand for diversified, higher-yielding investments.
The High Court has cleared the way for insolvency proceedings against Standard Group Plc over Ksh7.54 million in unpaid employee dues.
As reported by the Kenyan Wall Street, Justice Freda Mugambi dismissed the media company's application to block former employee Moses Onyango Ochola from pursuing the claim, ruling that the debt had been calculated and approved in 2025 but remained unpaid.
Standard Group argued that the amount required reconciliation, but the court found no specific disputed component or alternative figure. The ruling allows a statutory demand issued in March 2026 to remain in force, exposing the NSE-listed company to further insolvency proceedings if it fails to settle the debt.
Ukaguzi Sacco reported Ksh47.03 million in loan defaults in 2025, while recovery of a separate Ksh50 million investment in KUSCCO Limited remained uncertain.
Capital Business notes that the Sacco in its 2025 report classified Ksh3.27 million as losses and Ksh13.95 million as doubtful or substandard loans.
The Sacco’s loan book grew 6.68% to Ksh3.02 billion, while unpaid employer contributions reached Ksh98.85 million.
Operating income rose to Ksh510.90 million, exceeding budget by 31.5%. Membership increased to 2,455 from 2,376 in 2024.
First Assurance Investments Limited, linked to Prime CS Musalia Mudavadi and Lamu Governor Issa Timamy, has agreed to pay Ksh3 billion for Absa Group’s 63.3% stake in Absa Life Assurance and First Assurance Kenya.
As reported by the Business Daily, the deal, which awaits Competition Authority of Kenya approval, values the two insurers at approximately Ksh4.77 billion.
The transaction will see the investors reclaim stakes sold to Absa, formerly Barclays Africa, in 2015 for Ksh2.2 billion.
Absa is shifting towards bancassurance, distributing insurance products through banking partners instead of directly owning insurance businesses across several African markets.
The Kenya Ports Authority (KPA) is expanding infrastructure and investing in technology at the ports of Mombasa and Lamu to improve efficiency and accommodate growing regional trade.
As reported by Citizen Digital, projects include Dongo Kundu Berth One and Berth 19B, which is expected to increase annual container-handling capacity by 300,000 twenty-foot equivalent units (TEUs).
KPA is also introducing a modern Terminal Operating System and Smart Gate System to improve cargo tracking, security and turnaround times.
Chief Executive Officer William Ruto said the investments would strengthen Kenya’s position as a regional logistics hub. The Port of Lamu will complement Mombasa and support the LAPSSET Corridor, connecting Kenya to markets including Ethiopia and South Sudan.
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