Executive, Ministries of Education, Agriculture Score Big in Ruto’s Ksh4.263 trillion Budget

Kenya is on the verge of approving its largest budget in history, with the 2025–2026 Hustler Budget proposed at Ksh4.263 trillion, marking an increase from the previous year’s Ksh3.9 trillion.

While key sectors such as Energy, Infrastructure, and ICT are set to benefit significantly, others will see reductions as the government attempts to balance its expenditures.

Initially set at Ksh4.5 trillion, the budget was trimmed down by the Cabinet to Ksh4.2 trillion, reflecting adjustments in fiscal priorities. The budgetary allocations include Ksh3.096 trillion for recurrent expenditure, Ksh725.1 billion for development projects, Ksh436.7 billion to county governments, and Ksh5 billion for emergency contingencies. 

The budget delineates Ksh3.096 trillion for recurrent expenditure, Ksh725.1 billion for development projects, Ksh436.7 billion allocated to county governments, and Ksh5 billion set aside for the contingency fund. 

The Executive branch is slated to receive Ksh2.494 trillion, indicating a boost of approximately Ksh522.52 billion. Parliament’s allocation has seen a slight increase, while the Judiciary’s budget has been adjusted to Ksh25.749 billion from the previous Ksh27.749 billion, reflecting a reduction of Ksh2 billion.

A sectoral analysis reveals notable shifts in allocations compared to the 2024–2025 financial year. The Education sector emerges as a significant beneficiary, with an allocation of Ksh850.677 billion. 

This represents an increase from the previous year’s Ksh656.6 billion, reflecting a substantial boost of approximately Ksh194 billion. The enhanced funding is expected to support various educational initiatives, including infrastructure development and curriculum reforms.

Conversely, the Health sector faces a reduction in its budget. The current proposal allocates Ksh127 billion to healthcare, a decrease from the previous year’s Ksh147 billion, indicating a cut of Ksh20 billion. This reduction may impact ongoing health programmes and the implementation of Universal Health Coverage initiatives.

In terms of revenue generation, the government aims to collect Ksh2.835 trillion in taxes for the upcoming financial year, up from the projected Ksh2.6314 trillion in the current year. This target indicates an anticipated increase of approximately Ksh203.6 billion, reflecting the government’s strategy to bolster revenue through enhanced tax collection measures.

The Agriculture and Rural Development sector is allocated Ksh999.743 billion, marking an allocation increase from the previous year. The General Economic and Commercial Affairs sector is set to receive Ksh850.677 billion. 

Despite the ambitious revenue targets, the budget outlines a deficit of Ksh831 billion. To bridge this gap, the government plans to secure Ksh684.2 billion through net domestic financing and Ksh146.8 billion via net external financing.

To finance this record-breaking budget, the government plans to raise Ksh2.835 trillion in tax revenue, a notable increase from the projected Ksh2.6314 trillion in the current fiscal year. This means taxpayers can expect further pressure through heightened income tax and value-added tax (VAT), which will affect household incomes and the cost of basic commodities.

The 2025 Budget Policy Statement, tabled in Parliament on Thursday, will serve as the foundation for the upcoming Finance Bill. Lawmakers will now have the task of deliberating on the allocations and considering public input before passing the final version.