The Cabinet has given the green light to the 2025 Budget Policy Statement (BPS), setting the total national budget for the 2025/26 financial year at Ksh 4.2 trillion. The statement, which will be submitted to Parliament for further scrutiny, emphasizes key government priorities such as economic growth, fiscal discipline, and sustainable green development.
According to the BPS, the total expenditure for the financial year is projected to account for 22.1% of Kenya’s Gross Domestic Product (GDP).
Budget Allocations Breakdown:
- Recurrent Expenditure: Ksh 3.09 trillion
- Development Projects: Ksh 725.1 billion
- County Transfers: Ksh 436.7 billion
- Contingency Fund: Ksh 5 billion
Under the Division of Revenue Bill 2025, the National Government has proposed a shareable revenue of Ksh 2.8 trillion. Of this amount:
- County Governments will receive Ksh 405.1 billion as their equitable share.
- An additional Ksh 10.6 billion will be allocated through the Equalisation Fund.
The county allocation aligns with constitutional provisions, representing 25.8% of the most recent audited revenue of Ksh 1.57 trillion from the 2020/21 financial year. The funds will be distributed using the Third Basis Formula, as outlined in the County Allocation Revenue Bill 2025.
Additional County Funding
Beyond the equitable share, the County Government Additional Allocation Bill 2025 proposes an extra Ksh 69.8 billion, sourced as follows:
- Ksh 12.89 billion from the National Government
- Ksh 56.91 billion from development partners
With these additional resources, total county transfers for the 2025/26 fiscal year will amount to Ksh 474.87 billion, reinforcing county development and service delivery.
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