Kenya unveils 32.5 bln USD budget for 2025/26 to spur economic growth
John Mbadi, cabinet secretary for national treasury and economic planning, who tabled the budget statement before the National Assembly in the capital Nairobi, said the government seeks to foster sustainable economic growth to improve livelihoods and promote business and industrial prosperity.
"In 2024, the economy grew by 4.7 percent, supported by positive growth across all sectors except construction and mining," Mbadi said. "This growth was lower compared to 5.7 percent in 2023, mainly due to the adverse effects of floods in the second quarter and the anti-Finance Bill protests in the third quarter of 2024, which disrupted economic activities."
Despite the slowdown, Mbadi said that the Kenyan economy has remained resilient, recording an average growth rate of 5.2 percent in 2023 and 2024, outpacing global growth of 3.3 percent and sub-Saharan Africa's 3.8 percent.
Looking ahead, Mbadi said the economy is expected to maintain its growth momentum in 2025 and 2026, with projections at 5.3 percent per year, based on expectations of a stable macroeconomic environment in the medium term.
Mbadi said that the government aims to collect 25.6 billion dollars in revenue, equivalent to 17.2 percent of the gross domestic product (GDP), including 20.8 billion dollars in tax revenue, as well as non-tax revenue and grants.
He said the fiscal deficit is projected at 7.14 billion dollars, or 4.8 percent of GDP, to be financed through 2.22 billion dollars in external borrowing and the remainder from domestic sources.
The cabinet secretary said the government is committed to promoting access to quality and affordable healthcare through the Universal Health Coverage Program. Mbadi also highlighted investments in digital infrastructure to enhance connectivity and support the creative economy.
He said the budget proposals were developed through public consultations to address challenges experienced in 2024, when new tax measures met strong resistance from citizens.
Therefore, he said, the 2025/2026 budget focuses on easing the tax burden on Kenyans by broadening the tax base and improving tax compliance.
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Malaysiakini
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