The Kenyan National Assembly has approved Sh405 billion for county governments in the 2025/26 financial year, alongside a budget ceiling of Sh2.5 trillion for the National Government. The BPS aims to enhance public understanding of finances while focusing on economic growth, expenditure efficiency, and prioritizing essential services amidst fiscal constraints.
The National Assembly of Kenya has approved an allocation of approximately Sh405 billion to county governments for the financial year 2025/26. This funding, identified within the Budget Policy Statement (BPS), includes an additional Sh69.8 billion, intended for various county-level initiatives. This allocation will serve as the foundation for the County Government Additional Allocations Bill for the upcoming fiscal year.
The budget framework sets the National Government budget ceiling at Sh2.5 trillion, with Sh2.4 trillion designated for the Executive. Parliament is allocated Sh49.5 billion, while the Judiciary will receive Sh26.7 billion. Additionally, Sh7.9 billion has been allocated for the Equalization Fund, along with an arrears payment of Sh3.5 billion. Funding for public participation initiatives totals Sh3 billion, and the Office of the Auditor General is allocated Sh8.7 billion.
The 2025 BPS outlines the government’s strategic priorities and macro-fiscal outlook while summarizing government expenditure plans for the fiscal year. Its goal is to enhance public understanding of Kenya’s financial situation and stimulate discussions regarding economic and developmental issues. The National Treasury emphasizes that the measures in the BPS aim to foster economic growth, reduce the cost of living, and improve the welfare of Kenyans.
To mitigate fiscal challenges, the government seeks to minimize debt risks through regulatory reforms that aim to expand the domestic tax base and ensure tax compliance. The focus remains on rationalizing expenditures to maximize the effectiveness of public investments, improving subsidies, and optimizing public service delivery through digital means.
Given the constrained fiscal context, careful prioritization of expenditures is essential. Ministries, Departments, and Agencies (MDAs) must reassess current and planned projects for the fiscal year, minimizing low-priority spending to prioritize high-impact service delivery. The BPS mandates Sector Working Groups (SWGs) to eliminate wasteful spending and redirect resources towards initiatives that promote job creation and economic recovery.
The National Assembly’s approval of Sh405 billion for county governments marks a significant step in fiscal planning for 2025/26. It highlights the government’s focus on improving public finance transparency and promoting economic growth while addressing fiscal constraints. The emphasis on expenditure rationalization and prioritizing high-impact projects will be crucial for sustaining a robust economic environment and fulfilling the needs of the population.
Original Source: www.capitalfm.co.ke
