Nairobi is abuzz with discussions surrounding Kenya's recently unveiled Ksh.4.29 trillion budget for the 2025/2026 financial year. Presented to the National Assembly on Thursday by Treasury Cabinet Secretary John Mbadi, this ambitious spending plan aims to stimulate economic recovery and job creation under the Bottom-Up Economic Transformation Agenda (BETA). However, beneath the headlines of significant allocations to key sectors, lies a stark warning from the Treasury CS regarding the nation's burgeoning public debt and the looming specter of a fiscal crisis.
The proposed budget, the largest in Kenya's history, earmarks substantial funds for critical areas. Education takes the lion's share, receiving Ksh.658.4 billion. This massive investment includes Ksh.387.2 billion for the Teachers Service Commission (TSC), Ksh.58.9 billion for free primary and secondary education, and a crucial Ksh.58.5 billion for higher education loans and scholarships. National security is also a major beneficiary with Ksh.464.9 billion, directed towards the operations of the National Police Service, the Kenya Defence Forces, and the National Intelligence Service, complete with allocations for leasing police vehicles and modernization programs. Infrastructure development, vital for economic growth, is set to receive Ksh.318.1 billion for roads, railways, air transport, and energy projects, while county governments are slated to receive Ksh.474.9 billion, ensuring devolved services are supported. The health sector, too, sees a significant allocation of Ksh.133.4 billion, funding hospitals, emergency care, vaccines, and the crucial rollout of Universal Health Coverage.
Despite these seemingly robust allocations, CS Mbadi's address was punctuated by a stark warning concerning Kenya's rising public debt, which now exceeds Ksh.10 trillion. He candidly acknowledged that the government is operating within a shrinking fiscal space, stating, "We face constraints on account of public debt accumulation. Progressively, our debt-carrying capacity has narrowed." This sobering reality, he emphasized, demands tighter financial discipline, strategic planning, and more efficient revenue mobilization to avert a deeper fiscal crisis. Mbadi stressed the urgent need for tough decisions, including streamlining public spending, directing borrowed funds towards productive investments, and curbing waste and inefficiencies within government operations. Watch whole finance bill reading proceeding here.
These warnings from the Treasury CS directly translate into real-world implications for ordinary Kenyans, fueling widespread economic frustration. Reports indicate that the budget contains subtle but impactful cuts that will hit citizens directly. Concerns are mounting over the potential reintroduction of exam fees in the education sector, a move that could burden parents already grappling with high living costs. In the health sector, there are fears of a failure to plug crucial funding gaps, Furthermore, civil servants are bracing for potential impacts on their perks, contributing to a general sense of unease about the nation's economic trajectory. Experts also highlight concerns that the budget's ambitious revenue targets, historically unmet, might lead to increased borrowing or further tax burdens on an already strained private sector.
While the government maintains that the 2025/2026 budget has been carefully crafted to balance revenue generation with economic growth, incorporating feedback from recent public consultation forums (barazas), public scrutiny remains intense. Civil society groups and economists are vocal in their calls for a more transparent budgeting process that truly prioritizes essential services while ruthlessly eliminating wasteful or redundant expenditure. They warn that without meaningful structural reforms and an unwavering commitment to fiscal responsibility, Kenya risks slipping deeper into a debt trap, potentially compromising future growth and the well-being of its citizens.
As Nairobi grapples with these financial realities, the national budget stands as a critical document, a delicate balance between ambitious development goals and the stark necessity of fiscal prudence. The coming months will reveal how these allocations and warnings translate into tangible impacts on the lives of Kenyans, as the nation strives to navigate its economic future under the shadow of mounting debt.
