By Laura Nyabang’a
The Cabinet Secretary for the National Treasury and Economic Planning, Hon. John Mbadi, has presented the 2025/2026 budget to the nation today. This event outlines the government’s fiscal priorities and allocations for the upcoming financial year.
The Kenyan government’s proposed KSh 4.2 trillion budget for the 2025/2026 fiscal year is under scrutiny, particularly when compared against the 2024/2025 performance. While the new budget aims for increased spending, up from KSh 3.92 trillion the previous year, it also projects a significant KSh 876 billion deficit.
“There were questions around openness and transparency in the budget-making process. And I think that is what we have done differently this time. Apart from what has for some time been done, where the budget process takes a particular route or pattern, this time we were more engaging with the public,” said CS John Mbadi.
This mirrors the challenges of the 2024/2025 budget, which faced a KSh 597 billion deficit. Revenue collection shortfalls by the Kenya Revenue Authority (KRA) have been a persistent issue, raising concerns about the feasibility of the new budget’s projections, despite the absence of new taxes. Both budgets heavily rely on borrowing to cover deficits.
A significant hurdle is the public’s lack of trust in how tax revenue is used, hindering compliance. Proposed solutions remain consistent: improved service delivery, tackling corruption, targeting tax evaders, and integrating the informal sector.
Despite these fiscal pressures, the economic outlook remains optimistic. The 2024/2025 budget projected 5.8% growth, while the 2025/2026 budget anticipates 5.3% growth, driven by agriculture and services. The government faces the ongoing challenge of balancing development ambitions with economic realities and public expectations.