Treasury Cabinet Secretary John Mbadi is set to unveil the highly anticipated 2025/2026 national budget today at Parliament in Nairobi. The ambitious Ksh.4.2 trillion budget marks a critical moment in President William Ruto’s administration as the government outlines its financial priorities for the upcoming fiscal year.
Funding the Ksh.4.2 Trillion Budget
To finance the colossal budget, the government has outlined a combination of revenue streams, including ordinary taxes, grants, fees for public services, and borrowing. The Treasury has set a tax collection target of Ksh.2.7 trillion, covering 64% of the total budget.
In addition to taxes, the government plans to raise Ksh.560 billion through Appropriations-in-Aid, derived from government levies and service fees. Combined, these measures aim to generate Ksh.3.3 trillion in revenue.
Bridging the Deficit
Despite these efforts, the budget will leave a deficit of nearly Ksh.900 billion. The government intends to close this gap primarily through borrowing, with Ksh.592 billion sourced locally and Ksh.284 billion secured from international lenders.
Additionally, Kenya expects to receive Ksh.46.9 billion in grants, further supporting its financial strategy for the fiscal year.
Key Highlights of Mbadi’s First Budget
This will be CS John Mbadi’s debut budget presentation as the Treasury boss under the Kenya Kwanza administration. Stakeholders are eager to hear his strategies for balancing the need for development with fiscal responsibility.
Mbadi is expected to announce new revenue-raising measures, amid ongoing debates over taxation policies and access to customer data by the Kenya Revenue Authority (KRA).
Economic Challenges and Opportunities
The 2025/2026 budget comes against a backdrop of economic recovery efforts and global financial pressures. The government’s focus on local borrowing signals a commitment to reducing reliance on external debt, though critics argue this may strain domestic financial markets.
Conclusion
As Treasury CS John Mbadi presents the 2025/2026 budget, all eyes will be on the measures aimed at bridging the deficit, spurring economic growth, and addressing the concerns of taxpayers and investors alike. The ambitious Ksh.4.2 trillion proposal represents a bold step forward for Kenya’s financial roadmap.
