The National Assembly of Kenya has approved Sh405 billion for county governments in the 2025/26 financial year, as part of the Budget Policy Statement. Key allocations include Sh69.8 billion for additional county support, and the overall budget ceiling is set at Sh2.5 trillion. The government aims to enhance economic efficiency, manage public finances effectively, and prioritize vital service programs amidst fiscal constraints.
The National Assembly of Kenya has approved an allocation of approximately Sh405 billion to county governments for the financial year 2025/26, following the endorsement of the Budget Policy Statement (BPS). In addition, counties will receive Sh69.8 billion from the Third Schedule of the Report, which will support the County Government Additional Allocations Bill for the upcoming fiscal year.
During the budget review, the National Government’s budget ceiling was set at Sh2.5 trillion. The Executive is allocated Sh2.4 trillion, Parliament will receive Sh49.5 billion, while the Judiciary’s budget is confirmed at Sh26.7 billion. Furthermore, the National Assembly has approved Sh7.9 billion for the Equalization Fund, with an additional Sh3.5 billion allocated for its arrears.
The budget also includes Sh3 billion for public participation initiatives and Sh8.7 billion for the Office of the Auditor General. These recommendations will underpin the Budget Estimates for the fiscal year 2025/26. The BPS details the government’s strategic priorities, showcases the economic situation, and presents a medium-term macro-fiscal outlook alongside government spending plans.
The publication of the BPS seeks to enhance public comprehension of Kenya’s financial landscape and stimulate discussions surrounding economic development. The National Treasury anticipates that the policy measures outlined will foster economic efficiency, bolster businesses, lower living costs, and improve the overall welfare of Kenyans.
To stabilize fiscal conditions, the government aims to minimize debt risks by implementing reforms that expand the domestic tax base and improve compliance rates. The BPS emphasizes that expenditure rationalization will focus on enhancing public investment efficiency, refining subsidies, and addressing issues within state corporations. It intends to boost social safety nets and improve fiscal risk management.
Given the tight fiscal framework, prioritizing resource allocation is crucial. Low-priority expenditures may need to be deferred to ensure the seamless execution of essential service delivery programs. “Ministries, Departments, and Agencies (MDAs) are therefore required to re-evaluate all the existing or planned activities, projects, and programmes to be funded in the FY 2025/26 and medium-term budget,” the BPS advises.
Sector Working Groups (SWGs) are encouraged to eliminate wastage and focus on strategies that protect livelihoods, generate employment, revive businesses, and support economic recovery.
The approval of Sh405 billion for county allocations signifies a commitment to support local governance and enhance public services in Kenya. The National Assembly’s endorsement of various budget provisions aims to improve public financial understanding and economic development. Strict prioritization and expenditure rationalization are necessary to effectively manage limited resources, ensuring the funds address critical service delivery needs while fostering economic recovery.
Original Source: www.capitalfm.co.ke
