Elijah Ntongai, a journalist at TUKO.co.ke, has more than three years of financial, business, and technology research and reporting expertise, providing insights into Kenyan and global trends.

Kenya's National Treasury has proposed a KSh 4.4 trillion budget for the 2025/26 financial year, representing a notable increase from the budget in the 2024/25 financial year.

The draft proposal released by the Treasury and the accompanying Medium-Term Framework prioritises the implementation of the Bottom-Up Economic Transformation Agenda (BETA), a central focus of the Medium-Term Plan (MTP) IV under Kenya Vision 2030.

Treasury stated that BETA aims to drive economic recovery and promote inclusive growth by channelling investments into five key pillars expected to impact the economy and improve household welfare significantly.

These pillars include transforming agriculture for inclusive growth, supporting micro, small, and medium enterprises (MSMEs), advancing housing and settlement development, enhancing healthcare, and promoting the digital superhighway alongside creative industries.

These five pillars cut across ten socio-economic sectors. Below is a breakdown of the proposed budget allocations for the FY 2025/26:

In the draft proposal, the Treasury stated that the resource allocation for the BETA priority programmes will be undertaken through a value chain approach that will be divided into five clusters.

These clusters include finance and production economy, infrastructure, land and natural resources, social sectors, and governance and public administration.

The draft also identified nine key value chain areas for implementation in the 2025/26 FY, including Leather, Cotton, Dairy, Edible Oils, Tea, Rice, Blue Economy, Natural Resources (including Minerals and Forestry), and Building Materials.

"This process ensures there is no break in the cycle in the resource allocations for a value chain. The process will ensure adequate resources are allocated to any entity along the value chain and elimination of duplication of roles and budgeting of resources. Spending in these essential interventions is aimed at achieving quality outputs and outcomes with optimum utilizsation of resources," Treasury explained in the proposal.

Treasury expects the prioritisation of these key sectors and value chain points to raise economic vibrancy and tax revenues.

Meanwhile, the Treasury's 2025 Draft Budget Policy Statement revealed that the fiscal deficit will be financed by net external loans of KSh 213.7 billion and net domestic financing of KSh 545.8 billion.

Ruto's administration expects to collect KSh 3 trillion in ordinary revenue from taxes and levies, with counties set to receive KSh 442.7 billion.

The government will spend the entire amount to fund development expenditures even as it risks defaulting on its loans.

Proofreading by Otukho Jackson, a multimedia journalist and copy editor at TUKO.co.ke

Source: TUKO.co.ke