President William Ruto’s bottom-up economic transformation agenda will get a Sh257.31 billion shot in the arm in the coming financial year.
The budget summary for the 2024/25 financial year reveals that five key areas in poverty alleviation which feed into other thematic areas will get considerable spending in infrastructure and social services.
The estimates that put the total spending plan for the next financial year at Sh3.91 trillion, however, raises concern on the large allocation expected to go to debt service and recurrent spending.
Debt service has been allocated Sh1.8 trillion, representing 47 percent of the total budget while development spending will get only Sh687 billion, representing 18 percent of the entire haul.
Education and National Security will get Sh654 billion and Sh373 billion respectively, meaning the two sectors combined account for 55 percent of the total Sh1.88 trillion allocated to the 15 thematic areas.
Roads and Health, which play a key role in human development, follow at third and fourth positions getting Sh178.6 billion and Sh128.8 billion.
The Treasury trimmed the budget by Sh273.3 billion from the initial Sh4.18 trillion, a cut attributed to expected revenue shortfalls that will largely affect development spending losing Sh190 billion, representing 70 percent of the total reduction.
“Following the underperformance of revenues in the financial year 2023/24, the projected revenues in the approved 2024 budget policy statement (BPS) have been revised accordingly to reflect this reality on the baseline. Further, to remain on the fiscal consolidation path, there is a need to contain borrowing and rationalize expenditures to sustainable levels,” the National Treasury noted.
Projected revenue for the year will be Sh3.35 trillion being Sh81 billion more than the earlier estimated Sh3.43 trillion with the state setting an ambitious Sh2.91 trillion collection from taxes and investment income.
In the estimates, the treasury projects the budget deficit to drop to 2.9 percent of GDP (Sh514.7 billion) and will be financed almost equally by domestic and foreign sources.
