NAIROBI, Kenya Mar 12 – County governments are set to receive about Sh405 Billion as equitable share of revenue in the new financial year after the National Asssembly approved the Budget Policy Statement (BPS) for the 2025/26 financial year.
The devolved units, according to the BPS, will also receive Sh69.8 Billion as part of county additional allocation as per the Third Schedule to the Report, which shall form the basis for the County Government Additional Allocations Bill for the FY 2025/2026.
MPs set National Government budget ceiling at 2.5 trillion Shillings, where the Executive will recieve Sh2.4 trillion, Parliament as given a ceiling of Sh49.5 Billion Shillings and the Judiciary’s ceiling has been set at Sh26.7 Billion.
The National Assembly okayed Sh7.9 billion for the Equalization Fund kitty and an additional Sh3.5 Billion as the arrears to Equalization Fund.
The House approved the allocation for the public participation initiatives at Sh3 Billion while the Office of the Auditor General has been allocated Sh8.7 Billion.
Once approved by the House, these recommendations shall form the basis for FY 2025/2026 Budget Estimates.
The 2025 Budget Policy Statement outlines the strategic priorities of the Government, highlights the current state of the economy, provides macro-fiscal outlook over the medium term together with a summary of Government spending plans as a basis for the FY 2025/26.
The publication of the 2025 BPS aims to improve the public’s understanding of Kenya’s public finances and guide public debate on economic and development matters.
The National Treasury says the policy measures outlined in the 2025 BPS are expected to improve economy-wide efficiencies, create an enabling environment that supports growth in businesses and investment, reduce the cost of living as well as enhance the wellbeing of all Kenyans.
The tight fiscal stance is expected to reduce debt vulnerabilities through implementation of reforms to broaden the domestic tax base and improve tax compliance.
“Expenditure rationalization will continue to focus on enhanced efficiency of public investments, better targeting of subsidies and transfers, addressing weakness in state corporations, and digital delivery of public services. Social safety nets and fiscal risk management framework will be enhanced,” read the docket.
In view of the constrained fiscal environment, prioritization during resource allocation will be critical in ensuring low-priority expenditures are dropped or deferred to give way to high-priority service-delivery programmes.
“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. Sector Working Groups (SWGs) are required to eliminate wasteful expenditures and pursue priorities which are aimed at safeguarding livelihoods, creating jobs, reviving businesses and economic recovery,” the BPS stated.