The Institute of Public Finance (IPF) is pushing for the urgent strengthening of linkages between budget planning and execution ahead of June tabling of 2025/26 KSh 4.3 trillion budget, noting that the weak link has denied the public sufficient returns on resources.
- •In its analysis ahead of the budget, the IPF notes several systemic gaps, including low development budget absorption, a growing stock of pending bills, now totaling KSh 706 billion, and continued overlaps and duplications in government functions across multiple sectors.
- •In the FY2025/26, a KSh 4.3 trillion budget will presented by the government, representing a 10 percent increase from the revised KSh 3.9 trillion budget estimates in FY 2024/25.
- •The 2025 Budget Policy Statement (BPS) underscores a continued commitment to fiscal consolidation, with a notable rise in debt servicing obligations, which are projected to consume over Ksh. 1.37 trillion.
The think tank’s analysis of Key Performance Indicators (KPIs) within the education sector reveals that spending is not translating into value or equity. Basic education is one of the largest recipients of public funds yet there is slow execution of the Competency-Based Curriculum reforms, poor learning outcomes, and stagnating infrastructure expansion. In the State Department for Higher Education and Research, the development budget absorption rate was at a low of 49% in FY2023/24.
In the General Economic and Commercial Affairs (GECA) sector, inefficiencies persist not only in the State Department for Investment Promotion but also in tourism, where recurrent spending on administration remains high while performance indicators tied to job creation and visitor numbers have plateaued. IPF argues that these trends point to a broader failure to enforce performance-based budgeting, with many programmes continuing to receive funding despite weak results and poor monitoring frameworks.
“These inefficiencies undermine service delivery and slow progress on key national priorities. Strengthening alignment between resource allocation and sector performance, while addressing these gaps, is critical as the government navigates a tight fiscal environment and seeks to deliver on its socio-economic transformation agenda,” the Institute of Public Finance said while presenting its annual National Shadow Budget for FY2025/26.
IPF has hailed the government’s decision to adopt zero-based budgeting and the implementation of Public Investment Management (PIM) regulations, which is a significant policy shift that, if fully implemented can improve efficiency, reduce wastage, and ensure that allocations align with outcomes.
