NAIROBI, Kenya, February 11 – Cabinet has approved a Sh4.26 trillion budget for the 2025/26 financial year.
The budget, which is set to be presented to Parliament for further deliberation, allocates Sh3.09 trillion for recurrent spending and Sh725.1 billion for development initiatives.
Of the development allocation, Sh436.7 billion is earmarked for county government transfers, while an additional Sh5 billion is reserved for the contingency fund.
Overall, the expenditure represents 22.1% of Kenya’s Gross Domestic Product (GDP) and emphasizes funding for personnel emoluments and ongoing government projects.
The proposed budget comes amid an economic landscape still reeling from the fallout of the contentious 2024 Finance Bill.
That bill was largely rejected after widespread public opposition and deadly demonstrations resulted in the loss of hundreds of youths, prompting the government to re-evaluate its fiscal priorities.
In addition to the primary budget, Cabinet has also approved the proposed 2024/25 Supplementary Estimates, which authorize an extra Sh344.8 billion in expenditures.
This supplementary allocation breaks down into Sh199.0 billion for recurrent spending and Sh145.8 billion for development purposes.
According to State House, these funds will support various government projects, personnel compensation, revenue adjustments, and other emerging fiscal needs.
In 2024, President William Ruto declined to sign the Finance Bill—which aimed to raise Sh344.3 billion through additional taxes—following the widespread protests that accompanied it.
The revised budget and supplementary estimates are seen as key steps toward stabilizing the economy and addressing both recurrent and developmental priorities in a challenging fiscal environment.
