Trump Cancels Ksh7B Road Deal for Kenya

Hello and welcome to the Money News Roundup Newsletter, where we are covering Trump’s cancellation of Ksh7 billion BRT deal signed by President William Ruto and the Biden administration. We also cover why Kenyans are opting for the long-term government bonds.

Trump Cancels Ksh7B Road Deal for Kenya

US President Donald Trump cancelled a Ksh7.76 billion ($60 million) deal that Kenya had signed with former President Joe Biden to fund the Nairobi’s Bus Rapid Transit (BRT) project.

Treasury disclosures show that the Millennium Challenge Corporation (MCC) Threshold Programme has now been earmarked for termination.

As reported by Business Daily, the agreement, signed on September 19, 2023, in New York and activated in May 2024 during President Ruto’s state visit to Washington, was set to run until June 2027. 

It aimed to boost urban mobility, strengthen institutions, and provide safer, climate-friendly transport options for Nairobi’s underserved communities. The US was to contribute Ksh5.8 billion, with Kenya adding Ksh1.56 billion.

The MCC grant was a core part of the Kenya–US climate and transport partnership, supporting safer pedestrian infrastructure, gender-inclusive transit, and the acquisition of buses for Nairobi’s planned BRT network. 

However, Trump’s administration, following his January 2025 return to office, has moved to reverse several Biden-era deals, overhaul USAID, and cut billions in global assistance. Kenya is among the countries hit hardest, with terminated US contracts now exceeding Ksh108 billion.

The cancellation directly affects BRT Line 2 (Simba), planned to connect Rongai, Bomas, the CBD, Ruiru, Thika, and Kenol. The broader Nairobi BRT project, intended to ease congestion and modernise transport, has stalled due to persistent funding gaps and delayed contractor payments.

Kenyans Settle for Long-term Bonds for Higher Returns

Investors are flocking to long-term Treasury bonds as returns remain high despite falling interest rates.

 In November, CBK reopened four bonds—two 15-year papers, a 20-year, and a 25-year—paying between 12 and 14.2 percent, far higher than the 7.8–9.4 percent offered on T-bills.

As in the Business Daily, the government received bids worth Ksh208.75 billion and accepted Ksh107.6 billion, with strong uptake from pension funds and retail investors seeking better yields amid declining returns on unit trusts and fixed deposits.

The shift follows CBK’s continued rate cuts, which have lowered the Central Bank Rate from 13 percent in August 2024 to 9.25 percent. 

As a result, banks and money market funds have reduced returns, driving more investors toward longer-term government securities.

State House Spends Double Its Quarterly Budget in 3 Months 

As reported in the Daily Nation, State House spent Ksh4.32 billion in the first quarter against a target of Ksh1.92 billion, exceeding its budget by 125 percent and signalling pressure on President William Ruto’s fiscal consolidation plan amid revenue shortfalls. 

Treasury data shows recurrent spending overruns across key offices, including the Office of the Deputy President, which used Ksh1.11 billion against a Ksh743 million ceiling.

 Security agencies also overshot budgets: the National Police Service by Ksh5.59 billion, the Internal Security by Ksh6 billion, and the National Intelligence Service by over Ksh5 billion.

The Treasury has pledged tighter expenditure controls, but the first-quarter figures reveal weak enforcement. While Article 223 allows limited overspending, several departments appear to have far exceeded these provisions, raising fresh concerns over fiscal discipline.

Uganda to Own Part of Kenya Pipeline in New Plan

Kenya has formally invited Uganda to acquire a major stake in the Kenya Pipeline Company (KPC), with President William Ruto announcing that Kenya will divest up to 65% of the strategic fuel transporter. 

Ruto said Uganda, private investors, and East African citizens will be able to buy shares starting in March, marking a historic shift toward shared regional ownership.

As reported by Capital FM, He emphasized that KPC is a regional asset crucial to East Africa’s energy security and that Uganda has already signaled readiness to co-invest.

The joint ownership plan aligns with wider regional projects, including the extension of the Eldoret–Kampala pipeline and future links into Rwanda and the DRC. Ruto said this cooperation will cut transport costs and strengthen East Africa’s economic integration.

Why Govt’s Power Projects to Supply Electricity Will Delay

Kenya risks delays in completing six major electricity transmission lines due to a funding shortfall of Ksh49.6 billion ($383.23 million). 

Ketraco has secured Ksh53 billion ($411.17 million) of the Ksh102 billion ($794.40 million) needed, raising concerns over meeting the 2030 deadline. The projects—spanning 1,709km and 4,166 MVA in substation capacity—are crucial for strengthening the national grid, evacuating wind power from Loiyangalani, and boosting electricity imports from Uganda.

Past delays caused by funding gaps, stalled compensation, and bankrupt contractors heighten the risk of setbacks. 

Ketraco is now banking on Public-Private Partnerships to bridge long-term financing needs, with Africa50 and PowerGrid India set to begin construction on two key lines, including the 400kV Lessos-Loosuk route. Read more.

30,000 Teachers to Undergo Mandatory Retraining 

More than 30,000 secondary, Special Needs Education, and vocational teachers will undergo mandatory refresher training from December 1–19, 2025, as the Ministry of Education prepares for the transition of 1.1 million Grade 9 learners to Grade 10 in January 2026.

The training will cover all 55 learning areas and specialised pathways under the Senior School CBE framework, including STEM, Social Sciences, and Arts and Sports.

TSC, supported by KICD, KNEC, CEMASTEA, and KISE, will conduct face-to-face sessions with residential training for SNE and ASAL teachers.

As reported in the Daily Nation, this final phase targets the remaining 10 percent of teachers yet to be trained, complementing the 300,000 already retooled.

Meanwhile, the government is racing to address infrastructure gaps, including building 1,600 new laboratories before the 2026 transition.

3,000 Tenants Ordered to Vacate Houses for Govt to Build Affordable Houses

As reported by Citizen Digital, 3,000 residents of Makongeni have five days to vacate as the government prepares to demolish the estate for redevelopment under the Affordable Housing Program.

Some families who received the Ksh150,000 compensation have already begun relocating, though many say the amount is too little to start over.

Long-time residents have accused the government of disrupting their lives, while others say they have yet to receive any funds due to verification delays.

Parents worry about securing new homes and schools for their children. Tenants who depended on landlords receiving compensation fear they will be left stranded. 

The government insists all verified households will be paid and promises residents first priority to purchase homes once the new Makongeni is completed.