Ruto’s PS Reshuffle, Pension Reforms, and Record Bond Returns - Today’s Money News

In Summary:

• President Ruto reshuffled his administration, nominating 14 new Principal Secretaries, reassigning six, and demoting others, while creating five new state departments. 
• The Retirement Benefits Authority (RBA) is pushing for pension reforms, including limiting early withdrawals and allowing KRA to collect unremitted pension funds, with Ksh57 billion in arrears currently unpaid.
• The High Court nullified a directive that restricted government advertising to KBC, ruling it illegal and anti-competitive, allowing ministries and state agencies to advertise across various media outlets.
• Dealers in precious metals and stones will be required to report cash transactions above Ksh1.9 million under new anti-money laundering laws aimed at removing Kenya from the FATF grey list.
• Kenya’s infrastructure bond investors have earned record returns, with outstanding IFBs rising to Ksh1.92 trillion. The most lucrative bond issued in 2024 offers an 18.46% interest rate.
• Co-op Bank reported a net profit of Ksh25.5 billion in 2024, up 9.8%, driven by digital transformation and an expanding loan portfolio, with mobile loans reaching Ksh76.7 billion.
• Treasury CS John Mbadi has proposed reducing Kenya’s 47 counties to eight to cut costs, citing high salary expenses; the move would require a constitutional amendment.
• Super Metro buses continued operating despite NTSA suspending their license over regulatory non-compliance. Super Metro has warned of paralyzing city transport if NTSA enforces the ban, while NTSA has advised passengers to avoid the buses.

In a report by Money254, President William Ruto has reshuffled his administration, nominating 14 new Principal Secretaries (PSs), reassigning six, and demoting others while creating five new state departments. No PS was dismissed, with some reassigned as ambassadors or advisers. For example, Prof Edwin Kisiangani, who has been serving in the ICT Ministry, has been dropped as PS and will now serve as a Senior Economic Advisor to the President. Other notable changes include Belio Kipsang and Julius Bitok swapping roles, and former Trade PS Alfred K’Ombudo being reassigned as Deputy Head of Mission in Brussels.

The Retirement Benefits Authority (RBA) is pushing for changes to the Retirement Benefits Act, including limiting early access to pension funds and granting the Kenya Revenue Authority (KRA) powers to collect unremitted pension deductions. According to The Business Daily, currently, Ksh57 billion in pension arrears remain unpaid, with an additional Ksh12 billion in lost investment income. The RBA wants to increase the lock-in period for pension funds, starting with a 50% restriction, to ensure Kenyans have adequate retirement savings. Meanwhile, only 38% of pension schemes have been cleared to handle National Social Security Fund (NSSF) deductions, with approvals delayed due to past legal uncertainties. 

In a report by The Daily Nation, the High Court has nullified a government directive that restricted public advertising in ministries and state corporations to Kenya Broadcasting Corporation (KBC). Judge Lawrence Mugambi ruled that the March 7, 2024, memo by Broadcasting PS Edward Kisiang’ani was illegal, as he lacked the authority to issue such a directive under the Public Procurement and Asset Disposal Act. The court found the policy discriminative, lacking transparency and competitiveness. The Law Society of Kenya (LSK) had challenged the directive, arguing that stakeholders were not consulted. The ruling means government advertising can now be distributed across multiple media outlets, impacting revenue flows in the media sector.

Dealers in precious metals and stones in Kenya will be required to report cash transactions above Ksh1.9 million under proposed amendments to the Proceeds of Crime and Anti-Money Laundering Act. The bill, tabled in Parliament by Majority Leader Kimani Ichung’wah, aims to help Kenya exit the Financial Action Task Force (FATF) grey list, which it was placed on in February 2024 due to weaknesses in combating money laundering and terrorism financing. The amendments will bring gold, silver, and diamond dealers under the same reporting obligations as banks. A 2022 evaluation by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) found limited oversight in the sector, which has been linked to illicit gold trade from the Democratic Republic of Congo. The grey listing has led to stricter scrutiny of Kenya’s financial system, potential investor concerns, and increased borrowing costs as reported in The Business Daily.

Super Metro buses continued operating despite NTSA suspending their license over non-compliance with Public Service Vehicle regulations. NTSA cited expired inspection certificates, road service licenses, and speed limiter violations across multiple vehicles, as well as concerns over driver qualifications and poor employment terms. According to The People Daily, the suspension follows public outcry after a conductor allegedly pushed a passenger out of a moving bus, leading to his death. Super Metro operators have warned they may paralyze city transport if NTSA disrupts their business. NTSA has cautioned passengers against using Super Metro buses.

In a report by The Business Daily, Kenya’s infrastructure bond investors have earned record returns as the government increased borrowing through tax-free securities. Central Bank of Kenya data shows that between January 2023 and February 2025, outstanding infrastructure bonds (IFBs) rose by a net Ksh533 billion to Ksh1.92 trillion. Over this period, the Treasury issued five IFBs, raising Ksh891 billion at interest rates between 13.84% and 18.46%, generating Ksh147.5 billion in annual returns for investors. The most lucrative bond, an 8.5-year paper issued in February 2024, pays 18.46% interest. IFBs accounted for 32.5% of Kenya’s total domestic debt stock as of February, with their uptake driven by higher returns compared to equities, real estate, and fixed deposits.

Co-op Bank reported a net profit of Ksh25.5 billion for 2024, a 9.8% rise from Ksh23.2 billion in 2023, driven by digital transformation, cost efficiency, and an expanding loan portfolio. According to The People Daily, the bank’s total operating income grew by 12.5% to Ksh80.6 billion, with net interest income increasing to Ksh51.5 billion. Customer deposits rose 12.1% to Ksh506.1 billion, while mobile loans through Mco-op Cash hit Ksh76.7 billion. The board proposed a Ksh1.50 per share dividend. Co-op Bank also expanded its network to 211 branches, including a new one in South Sudan.

In a report by The People Daily, Treasury CS John Mbadi has proposed reducing Kenya’s 47 counties to as few as eight, arguing the current structure is financially unsustainable. With nearly Ksh1 trillion spent on salaries from Ksh2.5 trillion in revenue, he suggests streamlining counties to cut costs and improve efficiency. However, such a move would require a constitutional amendment. Reports from the Controller of Budget show counties continue to overspend on travel and allowances, with Kitui, Busia, Kisumu, and Uasin Gishu leading in high travel expenses.