NAIROBI — Treasury Cabinet Secretary John Mbadi today tabled Kenya’s 2025/26 budget in Parliament, setting government spending at a record Ksh.4.2 trillion. It’s a bold financial blueprint—his first as Finance Minister—crafted in the face of rising debt, slowing growth, and public frustration over tax burdens.
The government plans to fund the bulk of the budget—nearly two-thirds-through taxes, fees, and grants. But a gap of Ksh.876 billion still remains. That, Mbadi said, will be plugged by borrowing, mostly from local lenders.
“We aim to collect Ksh.2.7 trillion through taxes,” Mbadi told lawmakers in the National Assembly. “This is 64 percent of what we need. We will raise the rest through levies, fees, grants, and responsible borrowing.”
According to the Treasury’s figures, an additional Ksh.560 billion will come from government service charges, known as Appropriations-in-Aid. Together with Ksh.46.9 billion in expected grants, that brings total revenue projections to just under Ksh.3.3 trillion.
That still leaves a significant shortfall.
To bridge the gap, the government plans to borrow Ksh.592 billion locally and another Ksh.284 billion from external lenders. These numbers reflect a heavy reliance on domestic markets—an approach that may increase competition with private sector borrowers and possibly push up interest rates.
A Nation Under Pressure
This year’s budget comes at a tense moment. Many Kenyans are feeling squeezed by the cost of living, while small businesses continue to struggle under tight credit conditions.
In the build-up to today’s presentation, Mbadi defended controversial plans to give the Kenya Revenue Authority (KRA) access to customer data, saying it was necessary to improve compliance.
“We can’t trust Kenyans to pay taxes at will,” he told reporters earlier this week. “We need to build a fair and efficient system.”
The move has sparked concern among privacy advocates and some opposition MPs, who say it may overstep legal boundaries.
Meanwhile, the Central Bank of Kenya has recently cut lending rates for the sixth time this year, hoping to free up credit for private enterprises and spur growth. But analysts say this alone won’t be enough to offset the pressure from rising taxes and borrowing.
A Delicate Balancing Act
President William Ruto’s government faces a tough balancing act—funding key programmes, managing debt, and protecting citizens from further financial pain.
This year’s budget is likely to be watched closely by both local and international observers, including credit agencies wary of Kenya’s growing debt pile.
Mbadi, appointed after Njuguna Ndung’u’s departure earlier this year, is under pressure to deliver a more transparent and efficient Treasury. His performance in this first major test may well define his legacy—and shape public trust in Ruto’s economic agenda.
As MPs prepare to debate the budget in the coming weeks, the country will be listening keenly. For many Kenyans, the numbers on paper must now translate into real change on the ground.
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