More Pain for Kenyans Working in NGOs as Elon Musk Hints at USAID's Permanent Shutdown

In Summary

1. Investigations suggest an insider role in the six-day KRA system outage in November, which caused a rare drop in tax collections, impacting trade and exports.
2. NSSF contributions will rise this month, significantly increasing costs for employers and reducing disposable income for employees, with potential economic consequences.
3. A data breach at BRS exposed sensitive shareholder details of prominent figures, sparking concerns over data security and prompting investigations.
4. The Treasury's Pending Bills Committee approved Ksh206 billion for suppliers, prioritizing SMEs owed less than Ksh10 million, with plans for a supplementary budget.
5. The Treasury announced its first-ever domestic Treasury bond buyback, aiming to retire Ksh50 billion in bonds due to mature soon, shifting strategy from refinancing.
6. USAID faces potential closure following criticism from Trump and Musk, creating uncertainty over future US foreign aid and the agency's operational stability.

The troubles facing beneficiaries of USAID programs continue to compound. This is after President Donald Trump's close ally and advisor Elon Musk indicated that the current administration would completely shut it down. According to The Star, USAID’s future is in jeopardy after Musk criticized the agency, terming it “evil” and pushing for its shutdown. Both Trump and Musk argue that USAID's international spending does not provide sufficient value for American taxpayers, with Trump frequently targeting the agency in his criticism. At the moment, USAID is facing a temporary budget freeze for a 90-day window as President Trump considers whether foreign aid programmes are aligned with his agenda. However, should the budget cut be permanent, the implications could be dire for many Kenyans who benefit from its spending in key sectors of the economy. The development comes at a time when hundreds of Kenyans working for various USAID-allied NGOs are being let go. On Monday, the University of Nairobi (UoN) announced it was temporarily closing down the Fahari Ya Jamii programme and sent all employees on a three-month unpaid leave. Tens of other NGOs are also taking similar measures. USAID's website has been down, key employees have been locked out, and top officials have been placed on leave, creating widespread disruption. USAID, which provides billions in global humanitarian aid, may face restructuring or complete closure, sparking concerns about job losses and the future of US foreign aid.

In a report by the Business Daily, investigators suspect an insider job in the six-day Kenya Revenue Authority (KRA) system outage in November, which led to a rare decline in tax collections. The failure of the Integrated Customs Management System (iCMS) disrupted cargo clearance at key entry points, affecting trade taxes and delaying exports like tea. Treasury CS John Mbadi acknowledged ongoing investigations amid claims of sabotage, while KRA attributed the outage to aging infrastructure. The incident comes amid concerns over corruption within KRA, with past accusations of staff colluding with tax evaders and resisting digitization efforts to seal revenue loopholes.

In a report by Capital Business Treasury and Economic Planning CS John Mbadi has announced that the Pending Bills Committee has approved the payment of Ksh206 billion out of the Ksh663 billion owed by the government to suppliers. Addressing a Finance Bill 2025 public participation forum, Mbadi stated that the committee reviewed Ksh474 billion in liabilities before approving this amount, with priority given to SMEs owed less than Ksh10 million. He added that a supplementary budget is being prepared to settle these payments, while larger debts will be addressed in a subsequent budget. The initiative aims to inject liquidity into the economy and ease financial pressure on businesses.