NAIROBI, Kenya, May 22 – The proposed 2025/26 budget estimates have exposed significant underfunding across key public service institutions, raising concerns over the country’s ability to deliver on promised reforms and drive economic transformation under the Bottom-Up Economic Transformation Agenda (BETA).
According to the National Assembly Budget and Appropriations Committee’s report on the estimates, some of the most crucial departments — including Labour, Skills Development, and Public Service — face funding shortfalls despite being central to the government’s digitization, job creation, and service delivery plans.
The State Department for Labour and Skills Development was allocated Sh5.04 billion, Sh1.17 billion less than what was recommended in the Budget Policy Statement (BPS).
The shortfall could delay key programmes such as the construction of 47 digital hubs and the operationalisation of labour migration support systems aimed at boosting youth employment.
Similarly, the State Department for Public Service and Human Capital Development received Sh9.38 billion, a Sh514 million reduction from the BPS ceiling.
The committee flagged this cut as likely to undermine ongoing reforms, including the digitization of HR and payroll systems across government and the expansion of Huduma Centres.
At the same time, critical development projects across these departments are only 39 percent funded, with major backlogs in infrastructure rollout and delays in staff training.
For example, the National Employment Authority and the Kenya School of Government are both struggling to maintain operations due to inadequate funds.
Pending bills are another concern. The Public Service Department owes Sh1.5 billion in outstanding obligations — primarily NHIF contributions — while the Labour Department has Sh17.7 million in pending bills.
The Budget and Appropriations Committee has urged the National Treasury to prioritize the clearance of pending bills, ring-fence training budgets, and restore cuts to key development projects.
It also wants the Salaries and Remuneration Commission and Public Service Commission to receive full funding to support institutional reforms and compliance monitoring.
Despite the challenges, the budget features some wins. The Public Service Commission’s Sh3.69 billion allocation is Sh91.5 million above its BPS ceiling, which will enable it to push ahead with recruitment and public sector rationalization initiatives.
Still, the report reflects a broader struggle in balancing fiscal discipline with the need to invest in service delivery and employment generation.
