The National Treasury has unveiled Kenya’s proposed budget for the 2025/2026 financial year, totaling KSh 4.29 trillion, or 22.3 percent of the country’s Gross Domestic Product (GDP).
Treasury Cabinet Secretary, speaking during budget for the financial year 2025-26 in Parliament, he emphasized that the budget seeks to balance fiscal responsibility with sustainable development amid continued global economic uncertainties.
Development expenditures, including allocations to both domestic and foreign finance projects, contribute to the fund, and equalization fund, will amount to 63.2 billion. Equivalence to 3.6 percent of GDP. Total unofficial to county government is projected at 4 hundred and 74.9 billion, of which, equitable share, is 405.1 billion.
Fiscal deficits, including grants, is projected at 923.2 billion, which is equivalent to 4.8 percent of GDP, down from estimated 997.5 billion, or 5.7 percent of GDP, in financial year 2025.
The fiscal deficit for the financial year, 2025/2026, budget will be financed by net external borrowing of 287.7 billion, equivalent to 1.5 percent of GDP, and net domestic borrowing of 600, that’s 5.5 billion, which is equivalent to 3.3 percent of GDP.
Public debt is projected to remain with this acceptable debt for some of the medium term. In present value terms, the debt with GDP is projected progressively decline, from 63 percent to 2024, towards the debt anchor of 55 perennial, or minus 5 percent of GDP, plus or minus 5 percent of GDP, or 728.
To support the projected decline in debt levels, the national pressure will continue implementing various reforms, as guided by the medium term, debt management strategy, including liability management, liability management operations, continuous swing use of conventional loans from multinationals, by national, and limited commercial sources, such as international, bond, and so on.
Additionally, reforms targeted to support domestic market development, will eventually reduce the cost of public debt, while sustaining fiscal consolidated efforts to ensure debt remains with international levels.
Further, the government will explore emerging funding with internationals, that’s what, that’s for a bond, sustainability like bonds, and environmental, social, and governance debt instruments, to fund budget deficit and manage public debt.
This strategic approach will not only diversify our finance, but also strengthen international partnerships and promote sustainable growth. The government is keen on sustaining transparent and improving efficient and public debt services.
