Kenya’s Finance Minister John Mbadi on June 12 tabled a KSh 4.29 trillion national budget for the 2025/2026 financial year, signaling a decisive shift toward fiscal discipline and economic recovery—without introducing new taxes. The move appears aimed at restoring public trust after last year’s unpopular tax hikes triggered widespread discontent and protests.
In his first budget address as Treasury Cabinet Secretary, Mbadi emphasized the government’s commitment to increasing revenue not by raising tax rates, but by tightening compliance, broadening the tax base, and improving efficiency in tax collection. “We are determined to build a sustainable fiscal framework without burdening Kenyans further,” he stated in Parliament.
A controversial but central pillar of the revenue strategy involves granting the Kenya Revenue Authority (KRA) access to personal financial data, including bank and mobile money transactions. The goal, according to the Treasury, is to curb chronic tax evasion, especially among high-income earners and informal sector players.
The proposal has already stirred debate among privacy advocates and citizens, with concerns mounting over data protection, surveillance, and potential misuse of personal financial information. “The balance between boosting compliance and protecting individual rights must be carefully maintained,” warned a Nairobi-based digital rights organization.
Despite these concerns, analysts have largely welcomed the budget’s pragmatic approach. Key highlights include a planned reduction in the fiscal deficit to 4.5% of GDP, down from the current 5%, and an ambitious 5.3% economic growth target for both 2025 and 2026.
Substantial allocations have been earmarked for infrastructure development, health, education, and national security. The government also intends to expand a centralized public payroll system to combat ghost workers and rein in the bloated public wage bill—a recurring issue in Kenya’s public finance management.
To support its spending plans, the government is actively engaging with the International Monetary Fund (IMF) to renew lending support and bolster budgetary stability. In a bid to diversify funding sources and align with global sustainability trends, the Treasury is also exploring the issuance of green and ESG-linked (Environmental, Social, and Governance) bonds.
While the budget is seen as a step in the right direction, many economists caution that its effectiveness will ultimately depend on transparent execution and stringent public debt management. Kenya’s debt stock remains a concern, even as the government signals a shift away from costly commercial borrowing.
“The framework is sound, but implementation is key,” said Patrick Njoroge, an economist with a Nairobi-based think tank. “If the government delivers on its efficiency targets and debt sustainability measures, this could be a turning point.”
As Parliament begins deliberations on the budget proposals, the focus will remain on whether the Mbadi-led Treasury can walk the tightrope between economic revitalization and public accountability—without triggering another wave of public backlash.
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