The Kenyan government recorded a significant increase in recurrent expenditure during the financial year 2025/26, with spending exceeding the original budget by Sh203 billion. Treasury Cabinet Secretary John Mbadi has called for a new legal framework to better synchronize national planning with budgeting processes.

Key Drivers of Budget Increase

Data from the Treasury indicates that recurrent expenditure, which covers salaries, utilities, and routine maintenance, rose to Sh1.673 trillion, surpassing an initial estimate of Sh1.470 trillion. This represents the largest deviation in at least five years and highlights the growing reliance on mid-year budget revisions.

Major government entities that contributed to the upward revision include:

  • Ministry of Defence: additional Sh24.43 billion
  • National Treasury: additional Sh24.94 billion
  • Internal Security: additional Sh18.01 billion
  • National Intelligence Service: additional Sh13.5 billion
  • State House: additional Sh9.57 billion
  • National Police Service: additional Sh9.11 billion
  • Executive Office of the President, Deputy President, and Prime Cabinet Secretary also received increased allocations.

Need for a Planning Law

CS Mbadi emphasized the absence of legislation that integrates national planning with budgeting as a root cause of these discrepancies. He explained that while Kenya has laws governing public finance management and procurement, there is no legal framework guiding long-term national planning.

"If you don't plan well, then you cannot have a good budget and even a good financial plan," Mbadi stated, underscoring the importance of the proposed Planning Bill. The bill aims to embed long-term financial planning and priorities into the budget process before submission to Parliament for debate and approval.

Budget Flexibility and Supplementary Appropriations

The Constitution and Public Finance Management regulations allow for some flexibility in spending, permitting up to a 10 percent increase beyond approved budgets under specific circumstances. Supplementary budgets must be presented to Parliament within two months of any unapproved withdrawals from the Consolidated Fund.

Despite efforts to make the 2025/26 budget more realistic, unforeseen factors such as the Middle East conflict and lower-than-expected revenue collection by the Kenya Revenue Authority necessitated supplementary budgets.

Government's Fiscal Discipline Commitment

The push for improved planning aligns with President William Ruto's pledge to end borrowing for recurrent expenditure. In his 2022 inaugural address, the President stressed the importance of keeping recurrent spending below revenue levels to promote fiscal sustainability and national savings.