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Treasury has drafted the Budget Policy Statement for the Financial year 2025/26 that shows the allocations to key government sectors.
The document outlines the government’s economic policies, revenue projections, and expenditure priorities for the upcoming financial year.
It serves as a blueprint for budget formulation, guiding allocating resources to different sectors in line with the government’s economic agenda.
The BPS must be submitted to Parliament by February 15 of each year. It provides a medium-term outlook (three years) for revenue collection, expenditure management, and debt sustainability.
According to the document, Treasury estimates that the budget is expected to be Sh4.49 trillion in the coming financial year.
With revenue projections set at Sh3.52 trillion, the government aims to strengthen tax collection and curb expenditure wastage to ensure efficient resource utilization.
However, the Sh759.4 billion budget deficit, accounting for 3.9% of GDP, wil be financed through external and domestic borrowing.
Below are the proposed allocations to key sectors and priorities based on the Bottom Up Economic Agenda.
Education Sh718.8 billion
Education is the highest-funded sector.
The key priority spending areas are:
Expansion of CBC implementation.
Teacher recruitment and training programs.
Infrastructure upgrades in schools and universities.
Increased funding for Technical and Vocational Education and Training (TVET).
Enhancing bursary and scholarship programs.
Healthcare Sh204.9 billion
Priority Spending Areas:
Expansion of the Taifa Care and the Social Health Authority (formerly NHIF).
Upgrading healthcare facilities across counties.
Strengthening maternal and child healthcare services.
Investing in digital health infrastructure and e-health systems.
Boosting local pharmaceutical and vaccine production.
Infrastructure, Transport, and Energy Sh554.8 billion
Priority Spending Areas:
1,098.06 km of new road construction.
62 new bridges to improve connectivity.
Completion of phase 1 of the Nairobi Railway City project.
Expansion of Kenya’s electricity grid, targeting 1.44 million new connections.
Development of green energy projects, including solar and wind farms.
Deployment of 38,871 km of high-speed fibre optic cable.
Agriculture and Food Security Sh86.1 billion
Priority Spending Areas:
Distribution of subsidized fertilizer to 1.5 million farmers.
Expansion of irrigation schemes, including Mwea, Bura, and Lower Nzoia.
Support for dairy, coffee, and tea farmers through cooperative financing.
Investment in fisheries and aquaculture development.
Construction of agro-processing facilities in various counties.
Security and Defence Sh279 billion
Kenya faces emerging security threats, necessitating increased investment in border surveillance, counterterrorism, and police modernisation.
Priority Spending Areas:
Modernisation of police and military equipment.
Recruitment and training of new security personnel.
Strengthening cybercrime and intelligence capabilities.
Enhancing national border security infrastructure.
Expansion of police housing and welfare programs.
Governance, Justice, and Law Enforcement Sh267.7 billion
The judiciary and governance sector will receive funding to enhance judicial efficiency, combat corruption, and ensure access to justice.
Priority Spending Areas:
Judicial infrastructure development and case backlog clearance.
Implementation of electoral reforms ahead of the 2027 elections.
Strengthening anti-corruption frameworks and agencies.
Enhancing legal aid services for vulnerable populations.
Expansion of e-Government services for efficiency.
Social Protection and Welfare Sh78.7 billion
To address poverty, unemployment, and inequality, the government is expanding social safety net programs.
Priority Spending Areas:
Cash transfer programs for the elderly and vulnerable groups.
Youth and women empowerment initiatives.
Disability inclusion and social welfare programs.
Enhancing sports, arts, and cultural investments.
Support for orphans and vulnerable children.
Digital Economy and ICT Sh140.8 billion
Priority Spending Areas:
Expansion of public Wi-Fi hotspots in urban and rural areas.
Digitization of government services to improve efficiency.
Support for fintech, e-commerce, and digital startups.
Cybersecurity investments to protect Kenya’s digital infrastructure.
Skills development in the ICT sector through training and incubation programs.
Affordable Housing and Urban Development Sh90 billion
Priority Spending Areas:
Construction of 217,654 affordable housing units.
Slum upgrading projects in major cities.
Development of modern market spaces in urban centres.
Expansion of mortgage access to low-income earners. Improvement of waste management and sanitation in informal settlements.
Environmental Conservation and Climate Action Sh134.2 billion
In response to climate change threats and environmental degradation, the government has allocated funds to promote sustainability and green energy.
Priority Spending Areas:
Expansion of Kenya’s tree-planting initiative (target: 15 billion trees by 2032).
Climate resilience programs to mitigate floods and droughts.
Investment in waste recycling and clean energy projects.
Conservation of wildlife and marine ecosystems.
Strengthening carbon trading mechanisms for revenue generation.
County Government Allocations Sh442.7 billion
Counties will receive funding to support local development initiatives and enhance service delivery in health, agriculture, and infrastructure.
Priority Spending Areas:
Equitable share for county governments.
Support for county healthcare and UHC implementation.
Expansion of county roads and infrastructure.
Investment in county-based industrial and agro-processing projects.
Enhancing county-level disaster preparedness and response.