Kenya’s National Assembly Approves Sh405 Billion Budget for Counties in 2025/26
On March 12, 2023, the National Assembly approved Sh405 Billion for counties in the 2025/26 fiscal year, with additional allocations for the Equalization Fund and public initiatives. The BPS aims to clarify Kenya’s economic situation and improve public understanding of fiscal policies while prioritizing essential services amid a tighter fiscal environment.
On March 12, 2023, the National Assembly of Kenya approved a budget allocation of approximately Sh405 Billion for county governments as part of the financial year 2025/26 Budget Policy Statement (BPS). In addition to the equitable share, counties will receive Sh69.8 Billion under the County Government Additional Allocations Bill for the fiscal year.
The National Government budget ceiling has been set at Sh2.5 trillion, allocating Sh2.4 trillion to the Executive, Sh49.5 Billion to Parliament, and Sh26.7 Billion to the Judiciary. Furthermore, the Equalization Fund has been allocated Sh7.9 Billion, along with Sh3.5 Billion to settle arrears. Additionally, Sh3 Billion has been allocated for public participation initiatives and Sh8.7 Billion for the Office of the Auditor General.
The 2025 BPS outlines the strategic priorities of the Government, assessing the economic situation and providing a medium-term fiscal outlook alongside government spending plans. Its publication aims to enhance public comprehension of Kenya’s finances and stimulate discussion on economic development matters.
The National Treasury anticipates that the measures within the 2025 BPS will improve economic efficiency, foster a supportive environment for business growth, reduce the cost of living, and enhance the welfare of Kenyans. A tighter fiscal stance aims to mitigate debt risks through tax base expansion and compliance improvement.
The BPS emphasizes rationalizing expenditures to enhance public investment efficiency and better target subsidies and transfers. In light of a constrained fiscal framework, prioritization in resource allocation is essential to eliminate low-priority expenditures, facilitating more crucial service delivery programs. “Ministries, Departments and Agencies (MDAs) are therefore, required to re-evaluate all existing or planned activities, projects, and programmes…” as stated in the document.
The recent approval by the National Assembly of a Sh405 Billion allocation for county governments marks a significant step in Kenya’s financial planning for the 2025/26 financial year. The comprehensive allocations across various sectors reflect a commitment to improving economic efficiency and prioritizing essential services amid fiscal constraints. By emphasizing the need for rationalized expenditures, the BPS aims to enhance the well-being of all Kenyans while ensuring that low-priority projects are deferred in favor of critical programs.
Original Source: www.capitalfm.co.ke
