The government plans to cut spending in the 2025/2026 budget to curb debt vulnerability while ensuring essential public services remain funded.
This after the Cabinet revised the proposed 2025/2026 budget from Ksh 4.5 trillion to Ksh 4.2 trillion.
The Cabinet plans to rationalize expenditure, boost revenue mobilization, and enhance tax compliance.
President William Ruto chaired a Special Cabinet meeting on Tuesday, where the Cabinet revised downwards the proposed 2025/2026 budget by Ksh 300 billion.
This is equivalent to 22.1pc of Gross Domestic Product (GDP). Of the amount, Kshs 3.1 trillion will be spent on recurrent expenditure, Ksh 805 billion for development projects.
Counties will share out KSh 436.7 billion and Ksh 5 billion to cover unforeseen expenses.
The government says the proposed FY2025/2026 budget will focus on reducing the cost of living, creating jobs, expanding the tax base, and strengthening foreign exchange reserves to spur inclusive growth.
To improve financial management, the government will implement zero-based budgeting, transition to accrual-based accounting, and fully operationalize IFMIS asset inventory management.
It will also adopt a Treasury Single Account to streamline cash flow and expand public-private partnerships to fund key projects.
Meanwhile, the Cabinet has approved an additional Ksh 199.9 billion in the Supplementary Estimates II for the 2024/25 fiscal year.
The cash will address government and externally financed projects, personnel emoluments, budget realignments, and revenue adjustments.
