Cabinet Approves Ksh.4.2 Trillion Budget for 2025/26 Financial Year to Drive Economic Growth
Cabinet Approves Ksh.4.2 Trillion Budget for 2025/26 Financial Year
In a landmark decision, the Cabinet has approved the 2025 Budget Policy Statement (BPS), setting a Ksh.4.2 trillion budget for the 2025/26 financial year. The approval, which came during a special Cabinet meeting on Tuesday, outlines key priorities aimed at driving Kenya’s economic growth, fiscal stability, and sustainable development.
The approved budget allocates Ksh.3.09 trillion for recurrent spending, Ksh.725.1 billion for development, Ksh.436.7 billion for county transfers, and Ksh.5 billion for the Contingency Fund. The budget reflects the government’s continued commitment to fiscal discipline and sustainable economic policies.
The BPS highlights six major priorities that will shape the government’s strategy for the year. These include:
- Reducing the cost of living
- Eradicating hunger
- Creating jobs
- Expanding the tax base
- Improving foreign exchange balances
- Fostering inclusive growth
These goals will be achieved through strategic investments in key sectors, strengthening production, improving market access, and attracting both local and foreign investments. The government is also focusing on revenue mobilization and enhancing tax compliance through the Medium-Term Revenue Strategy, which will leverage technology to close revenue loopholes.
To ensure financial efficiency, the Cabinet introduced a zero-based budgeting system for the 2025/26 fiscal year. This approach requires that all expenses be justified for each new financial year rather than being carried over from the previous period. The system aims to improve cash flow and optimize the use of public funds.
The Cabinet has approved the scaling of Public-Private Partnerships (PPPs) to improve public service delivery, a move that will foster collaboration between the government and private entities to meet the growing demands for infrastructure and services.
In a bid to support essential development initiatives, the Cabinet has approved an additional Ksh.344.8 billion for critical projects, offsetting the gap left by the withdrawal of the Finance Bill 2024. The surplus budget allocation will help ensure that priority programs are funded and implemented without delay.
The approval of the Ksh.4.2 trillion budget signifies the government’s ambitious plans to boost the economy, address key challenges such as high living costs, and pave the way for long-term sustainable development.
As Kenya moves forward with this budget, all eyes will be on how the government delivers on its economic priorities and manages the fiscal measures necessary for growth and stability.
Cabinet Approves Ksh.4.2 Trillion Budget for 2025/26 Financial Year to Drive Economic Growth