The National Assembly of Kenya has approved an allocation of Sh405 billion to county governments for the 2025/26 financial year, along with various other budget allocations. The Budget Policy Statement outlines strategic government priorities and emphasizes efficient resource utilization in a constrained fiscal environment to enhance public services and economic recovery.
The National Assembly of Kenya has approved the allocation of approximately Sh405 billion to county governments for the financial year 2025/26, following the endorsement of the Budget Policy Statement (BPS). This allocation is aimed at achieving equitable revenue sharing among the devolved units. Additionally, counties will receive Sh69.8 billion as part of the additional allocation in accordance with the Third Schedule of the report, which will also inform the upcoming County Government Additional Allocations Bill.
The budget ceiling for the National Government has been set at Sh2.5 trillion, with Sh2.4 trillion assigned to the Executive. The Parliament is allocated Sh49.5 billion, while the Judiciary will receive Sh26.7 billion. Moreover, the National Assembly has approved Sh7.9 billion for the Equalization Fund and an additional Sh3.5 billion to cover arrears, alongside Sh3 billion for public participation initiatives and Sh8.7 billion for the Office of the Auditor General.
The 2025 BPS outlines the government’s strategic priorities, the current economic situation, and a medium-term macro-fiscal outlook. It also offers a summary of government spending plans that will underpin the FY 2025/26 estimates. The document is intended to enhance public understanding of Kenya’s fiscal position and stimulate informed debate concerning economic and developmental issues.
The National Treasury anticipates that the measures put forth in the 2025 BPS will bolster efficiencies across the economy, foster a supportive environment for business growth, mitigate the cost of living, and improve the overall welfare of citizens. Officials are committed to reducing debt vulnerabilities through tax base broadening and improved compliance.
The BPS emphasizes the need for expenditure rationalization, aimed at enhancing public investment efficiency, targeting subsidies better, addressing weaknesses in state corporations, and improving public service delivery through digital means. Given the fiscal constraints, prioritizing resource allocation will be paramount to eliminate lower-priority expenditures in favor of essential service delivery programs. Ministries and agencies are urged to critically assess all existing or planned projects and pursue priorities that promote livelihood security, job creation, and economic recovery, as outlined in the BPS.
In summary, the National Assembly has approved significant allocations for county governments and public services for the 2025/26 financial year. The BPS provides a framework for managing resources effectively and focuses on enhancing economic efficiency, tax compliance, and prioritizing essential services. These measures reflect a concerted effort by the government to navigate fiscal constraints while fostering economic recovery and improving the quality of life for Kenyans.
Original Source: www.capitalfm.co.ke
