The National Assembly of Kenya has approved an allocation of Sh405 billion to county governments for the FY 2025/26, alongside a Sh69.8 billion additional allocation. The national budget is set at Sh2.5 trillion, with specific provisions for the Equalization Fund and public participation initiatives. The 2025 Budget Policy Statement outlines government priorities and economic forecasts, aiming to enhance public understanding of finances and promote efficient resource management.
The National Assembly of Kenya has approved a substantial allocation of approximately Sh405 billion to county governments for the fiscal year 2025/26. This allocation forms part of the Budget Policy Statement (BPS) approved by the Assembly, which also includes an additional Sh69.8 billion earmarked for counties. This amount is supported by the Third Schedule to the Report, which will aid in formulating the County Government Additional Allocations Bill for the upcoming financial year.
In laying out the national budget, Members of Parliament have set a ceiling of Sh2.5 trillion for the National Government, with allocations of Sh2.4 trillion to the Executive, Sh49.5 billion to Parliament, and Sh26.7 billion to the Judiciary. Incorporating different components, the National Assembly also sanctioned Sh7.9 billion for the Equalization Fund and an additional Sh3.5 billion to settle arrears for this fund.
Further, Sh3 billion has been designated for public participation initiatives, while the Office of the Auditor General received an allocation of Sh8.7 billion. These budgetary recommendations, contingent upon final approval by the House, will underpin the FY 2025/26 Budget Estimates.
The 2025 BPS outlines the strategic objectives of the Government, analyzing the current economic climate and forecasting macro-fiscal trends. It aims to enhance public comprehension of Kenya’s public finances and to facilitate informed discussions on economic and developmental issues.
According to the National Treasury, the policy measures proposed in the BPS are intended to enhance efficiency across the economy, cultivate an environment conducive to business and investment growth, alleviate living costs, and improve the quality of life for Kenyans. Furthermore, a cautious fiscal approach is anticipated to mitigate debt risks through ambitious reforms aimed at expanding the domestic tax base and improving tax compliance.
The BPS emphasizes the importance of expenditure rationalization, which aims to maximize public investment efficacy and optimize subsidies and transfers. The document highlights the necessity of improving the management of state-owned enterprises and advancing the digital delivery of public services. In this context, resource prioritization is deemed essential, ensuring that lower-priority expenditures are deferred in favor of crucial service-delivery programs.
The BPS mandates Ministries, Departments, and Agencies (MDAs) to reassess their planned activities and projects for the fiscal year and the medium-term budget. Sector Working Groups (SWGs) are instructed to curtail wasteful spending while focusing on initiatives that promote livelihood security, job creation, business recovery, and economic revival.
In summary, the National Assembly’s approval of the Sh405 billion allocation to county governments is aligned with the strategic objectives defined in the budget policy framework for 2025/26. The emphasis on fiscal discipline, priority allocation, and efficiency in expenditures highlights the government’s commitment to sustainable economic recovery and resilience. Overall, the structured resource distribution aims to foster growth and support the livelihoods of Kenyans amidst financial constraints.
Original Source: www.capitalfm.co.ke
