National Treasury Cabinet Secretary John Mbadi addresses Bunge la Mwananchi members at Jevanjee Gardens in Nairobi on February 3, 2025.
The National Treasury has planned a series of meetings in various regions across the country to collect views on the 2025-2026 budget.
National Treasury Cabinet Secretary John Mbadi on Tuesday said the public meetings were part of governments’ connection with the ordinary people to listen to them on what they want and don’t want to be included in the next financial year’s budget.
The Treasury CS is expected to present the Budget Policy Statement (BPS) to the National Assembly before February 14, outlining government’s expenditure for the 2025-2026 financial year which kicks off in July.
But even before Parliament starts conducting its own public participation, Mr Mbadi said he would personally go and listen to the people as he answers their questions on various government tax measures just like he did on Monday at at Jevanjee Gardens.
The CS acknowledged that the State's failure to listen to the people was the main reason why the 2024-2025 Finance Bill was rejected by President William Ruto after sustained protests by the young people.
According to the plan, after the Nairobi engagement, which happened at Jevanjee Gardens on Monday, the CS will hold similar meetings at the Coast, then Northern Kenya, Western and Nyanza will have one forum before concluding with Eastern and Central regions.
The dates and the venues for the meetings are still being worked on before being released to the respective regional leaders for planning and coordination.
“I will personally attend these informal meetings and listen to the people on the ground on what they want or don’t want included in the next year’s budget. I believe it is part of the disconnect that was missing on the government side on last year’s Finance Bill that was rejected,” Mr Mbadi said.
“We want to do things differently this year and part of that includes carrying everyone along at the initial stage of the budget making. As a government, we have no option but to listen to the people.”
The second strategy that the Treasury seeks to employ is the revision of revenue projection to a more realistic figure, not to strain the government by looking for money already in the budget but is not there in actual sense.
“We must have an honest discussion about our revenue projection and make it as realistic as possible. When I meet the budget committee over this, we will discuss it and have a way forward,” Mr Mbadi said.
The minister said over projection of revenue collections means that the government must find a way of raising the amount budgeted, a factor which leads to the increasing taxes.
He said the over-ambitious plan of revenue collection as normally stated in the budget has always put Kenya Revenue Authority (KRA) under pressure to collect more.
Latest report indicates that the Taxman missed the collection target in the first quarter ended December by Sh163 billion due to the rejection of the Finance Bill, 2024.
The authority raised Sh1.07 trillion in the same period which has below the Sh1.23 trillion target that it was supposed to collect in order to be on the safe side of meeting the Sh2.47 trillion targeted for the full financial year ending June 2025.
Mr Mbadi attributed the missing of target to over-projection of revenue collection even in the face of a rejected Financial Bill.
“We have now seen the effect of over projection of revenue collection. We missed our target in December but I have looked at the January figures and they are looking good,” Mr Mbadi said.
He said even the overall budget for the 2025/2026 has been reduced by Sh183 billion to Sh2.835 trillion.
The third strategy according to the CS is reduce depending on external sources of income and borrowing to finance the budget
The external net financing for the 2024-2025 budget is Sh255 billion, a figure Mr Mbadi has said the government is projecting to reduce to Sh213 billion in the 2025-2026 Financial Year
“We want to reduce the dependence on external sources to finance our budget so that when such funds become scarce, we are not exposed to expensive loans from the International Monetary Fund (IMF) or the World Bank,” Mr Mbadi said.
He pointed out with the ongoing various pronouncements being made by the new US President Donald Trump, there are chances that funding to both World Bank and IMF may reduce hence the country must reduce depending on such avenues to always finance its budget.
In its fourth strategy, the Treasury is also seeking to increase collection of non-tax revenues from Ministries, Departments, and Agencies (MDAS) as part of ensuring the government has enough funds to run its activities.
“Our MDAs just need to be efficient in the collection of the revenue without necessarily raising the fees charged,” Mr Mbadi said.
According to Mr Mbadi the fifth strategy will largely revolve around fiscal, expenditure and borrowing discipline by the government in order to avoid wastage of public resources.
During the last week retreat with MPs at Naivasha, Mr Mbadi assured the lawmakers that the global economy has stabilized, with growth projected at 3.2 percent in 2024 and 3.3 percent in 2025, a growth he said will have a positive impact on the country’s economy.
Mr Mbadi further said that the Kenyan shilling has so far stabilized against the dollar and is within the Sh128-130 range since January 2024, a significant improvement from Sh160.8 in January 2024 to Sh129.4 in January 2025.
