News and Analysis
January 23, 2026
Hello and welcome to the Money News Roundup Newsletter, where we cover tax reliefs the government will introduce in the Finance Bill 2026 for farmers. We also cover NCBA’s explanation on why it settled on Netbank from other suitors.
Agriculture Cabinet Secretary Mutahi Kagwe has announced tax relief measures for agricultural exporters set to be included in the Finance Bill 2026. Key measures include cutting input VAT for agricultural exporters from 16% to 8%.
As reported by Citizen Digital, the bill, which will be tabled in Parliament in March, will also include removing excise duty on packaging materials such as kraft paper, and scrapping export promotion levies.
The bill will also allow faster offsetting of VAT refunds against future tax liabilities and offer special tax treatment for long-standing 100% exporters, enabling them to operate similarly to EPZs and SEZs.
Additional proposals include rationalising regulatory levies and easing logistics costs through expanded air freight capacity. The reforms are expected to unlock billions of shillings in tied-up capital across horticulture, tea, coffee and livestock value chains.
The proposals also aim to ease cash-flow pressure, support reinvestment and protect jobs in the export sector.
“We are fixing the exporter ecosystem deliberately and permanently. The Finance Bill 2026 will ensure that exporters of agricultural produce are competitive, liquid and able to reinvest in Kenya,” he stated.
Kenya Pipeline Company (KPC) has pledged to pay investors 50 percent of its net profits as dividends ahead of its initial public offering (IPO) on the Nairobi Securities Exchange (NSE), signalling an effort to position the State-owned fuel transporter as an attractive income-generating stock.
As reported by the Business Daily, the IPO will see the government sell a 65 percent stake, raising Ksh106.31 billion.
According to KPC, the 50 percent dividend payout will be declared and paid subject to available distributable reserves, sufficient liquidity, funding covenants, statutory requirements, and regulatory approvals.
The policy aims to attract yield-seeking retail investors, who often prioritise companies with sustainable and growing dividend streams.
Historically, KPC has paid higher dividends to the government, including Ksh5.9 billion (78.8% of net profit) in 2025 and Ksh7 billion (94.5%) in 2024.
Management says the new policy balances rewarding investors with funding critical capital projects, including pipeline upgrades, storage expansion, and new infrastructure investments.
The IPO, which opened on Monday and closes on February 19, 2026, involves the sale of 11.81 billion shares at Ksh 9 per unit.
The minimum amount of shares one can buy is Ksh100.
KPC operates the country’s fuel pipeline network, benefiting from rising petroleum consumption, efficiency gains, and regulated tariffs.
In 2025, most Kenyan banks cut borrowing costs, with Absa Bank Kenya, Citibank N.A. Kenya, and Middle East Bank leading the reductions.
Absa slashed its average lending rate by 5.2 percentage points to 13.75 percent, while Citibank lowered rates by 5.16 points to 10.17 percent, and Middle East Bank cut rates by 4.93 points to 17.07 percent.
Overall, 34 of 38 banks reduced loan costs, including top lenders Equity Bank Kenya and KCB Bank Kenya, whose rates fell to 14.96 percent and 15.24 percent, respectively.
Four smaller banks, including UBA Kenya and Kingdom Bank, increased lending rates despite cuts to the Central Bank of Kenya (CBK) benchmark rate, which fell from 11.25 percent in December 2024 to nine percent.
The rate adjustments followed CBK’s revised risk-based loan pricing regime, effective December 1, 2025, where banks price loans using either the Central Bank Rate (CBR) or the overnight interbank rate, renamed Kenya Shilling Overnight Interbank Average (Kesonia), plus a creditworthiness-based premium.
Lower interest rates boosted private sector credit growth to 6.3 percent in November, the fastest in 19 months, while non-performing loans fell to 16.5 percent. The revised pricing model is set to be fully operational by March 2026 for all loans, improving transparency and accessibility for borrowers. Read more
NCBA Group has said it chose South Africa’s Nedbank Group as a strategic investor after rejecting other suitors, citing a desire to avoid business disruption and preserve its brand, staff and systems.
NCBA chief executive John Gachora said the board prioritised a deal that would not require a painful integration process, dismissing speculation that the lender was in talks with Standard Bank through Stanbic Holdings.
Nedbank has offered to acquire a controlling 66% stake in NCBA in a deal valued at Ksh109.9 billion, to be settled through a mix of cash and shares. Shareholders holding 71.2% of NCBA support the transaction.
As reported by the Business Daily, Gachora said Nedbank’s lack of operating banking subsidiaries in NCBA’s markets made the deal attractive, allowing NCBA to retain its identity, board structure and staff.
Under the partnership, Nedbank plans to use NCBA as its anchor investment to expand across East Africa.
Kenyans can now file tax returns with the help of WhatsApp chatbot without visiting Kenya Revenue Authority (KRA) offices, as the agency expands digital access to tax services.
As reported by Kenyans.co.ke, KRA Commissioner General Humphrey Wattaga said the 24-hour chatbot offers 15 services, including tax filing guidance, PIN management, ETIMS invoicing and tax queries.
Taxpayers can access the service by saving the official KRA WhatsApp number +254 711 099 999 and sending “Hi” or “Menu” to begin. The bot verifies identity and provides step-by-step guidance on filing returns via the iTax portal, including required documentation.
The rollout is part of KRA’s wider technology upgrade using artificial intelligence and data analytics to improve efficiency and revenue collection. KRA is targeting Ksh2.968 trillion in revenue in the 2025/26 financial year, up 15.4% from Ksh2.572 trillion collected in 2024/25.
The Competition Authority of Kenya (CAK) has approved Zenith Bank Plc’s proposed acquisition of 100% of Paramount Bank Limited, clearing the Nigerian lender’s entry into Kenya’s banking market.
As reported by TechCabal, the approval is conditional on Zenith retaining all 78 Paramount Bank employees for at least 12 months after completion. CAK said the deal raises no competition concerns, noting Zenith has no existing operations in Kenya and Paramount’s market share will remain unchanged.
Zenith, valued at Ksh261 billion, is pursuing expansion beyond West Africa as Kenyan banks face tougher capital rules. Under new regulations, minimum core capital rose from Ksh1 billion to Ksh3 billion in December 2025 and to Ksh 10 billion by 2029.
The deal now awaits approval from the Central Bank of Kenya and Nigerian regulators.
Cash held outside the banking system grew faster in the 2024/25 financial year, with currency in circulation rising by 7% year on year to Ksh 357.02 billion, according to the Central Bank of Kenya (CBK). The stock of currency increased by Ksh23.2 billion in the year to June 2025, up from 5.6% growth in the previous year.
As reported by the Kenyan Wall Street, CBK data also shows that commercial banks withdrew more cash from the central bank than they deposited, resulting in net outflows of Ksh23.23 billion, a reversal from net inflows recorded in 2023/24.
While overall cash movement slowed, withdrawals continued to exceed deposits. Currency inflows fell 7.8% to Ksh476.32 billion, while outflows declined 6.6% to Ksh499.56 billion.
Banknotes accounted for over 98% of the increase, with notes in circulation rising by 7.1% to Ksh345.64 billion, while coins rose modestly to Ksh11.38 billion.
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