NAIROBI — Kenya’s new budget is raising eyebrows. Experts say the government’s Ksh.4.2 trillion spending plan for 2025/2026 is too ambitious, and may hit ordinary Kenyans hardest.
“It’s an overambitious budget,” warned Liban Guyo, Deputy Director at the National Cohesion and Integration Commission. “The Kenya Revenue Authority is expected to raise Ksh.2.75 trillion. But if history is anything to go by, that’s a tall order.”
Guyo, speaking to Citizen TV on Thursday, said the likely revenue shortfall would leave the government turning to both local and international lenders. That, he added, could mean more debt and new or increased fees for government services.
The Treasury has laid out plans to fund 64 percent of the budget—Ksh.2.7 trillion—through regular revenue collection. Another Ksh.560 billion is expected from levies and charges collected by government ministries and agencies, known as Appropriations-in-Aid.
Together, that brings in about Ksh.3.3 trillion, leaving a gap of nearly Ksh.900 billion. Even with projected grants of Ksh.46.9 billion, the deficit sits at around Ksh.876 billion—money that will have to be borrowed.
That level of borrowing is a red flag for many.
Tobias Alando, CEO of the Kenya Association of Manufacturers, said the government’s numbers only make sense if key economic sectors are supported.
“We need to be realistic,” Alando told reporters. “The manufacturing, agriculture, tourism, and service industries are critical. If they’re not incentivised, the government won’t hit its revenue goals.”
Alando pointed out a specific concern: when goods are shifted from zero-rated to tax-exempt status, manufacturers are unable to reclaim input VAT. That cost, he said, will be passed directly to consumers, driving up prices.
Neema Lois Wangui, a programme officer at Bajeti Hub, echoed the concern. She said the numbers on paper don’t reflect past performance.
“When we look at the government’s spending plans, we need to compare them with our actual revenue collection history,” she said. “We keep setting higher spending targets without increasing revenue in kind.”
The National Treasury has not publicly responded to the mounting criticism, but insiders suggest borrowing will remain the go-to strategy for closing the gap.
For Kenyans already struggling with a high cost of living and rising taxes, the road ahead looks rough.
The concern isn’t just about the numbers—it’s about trust. Can the government realistically meet these targets without piling more pressure on families and businesses?
With Parliament set to debate the estimates in coming weeks, and the Finance Bill already stirring public debate, the final shape of Kenya’s next budget remains unclear. But one thing is certain: people are watching closely.
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