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The Star
12-06-2025
- Business
- The Star
Kenya unveils 32.5 bln USD budget for 2025/26 to spur economic growth
NAIROBI, June 12 (Xinhua) -- Kenya on Thursday presented its 4.2 trillion shillings (about 32.5 billion U.S. dollars) budget for the 2025/2026 financial year, with proposals aimed at reigniting economic activity. John Mbadi, cabinet secretary for national treasury and economic planning, who tabled the budget statement before the National Assembly in the capital Nairobi, said the government seeks to foster sustainable economic growth to improve livelihoods and promote business and industrial prosperity. "In 2024, the economy grew by 4.7 percent, supported by positive growth across all sectors except construction and mining," Mbadi said. "This growth was lower compared to 5.7 percent in 2023, mainly due to the adverse effects of floods in the second quarter and the anti-Finance Bill protests in the third quarter of 2024, which disrupted economic activities." Despite the slowdown, Mbadi said that the Kenyan economy has remained resilient, recording an average growth rate of 5.2 percent in 2023 and 2024, outpacing global growth of 3.3 percent and sub-Saharan Africa's 3.8 percent. Looking ahead, Mbadi said the economy is expected to maintain its growth momentum in 2025 and 2026, with projections at 5.3 percent per year, based on expectations of a stable macroeconomic environment in the medium term. Mbadi said that the government aims to collect 25.6 billion dollars in revenue, equivalent to 17.2 percent of the gross domestic product (GDP), including 20.8 billion dollars in tax revenue, as well as non-tax revenue and grants. He said the fiscal deficit is projected at 7.14 billion dollars, or 4.8 percent of GDP, to be financed through 2.22 billion dollars in external borrowing and the remainder from domestic sources. The cabinet secretary said the government is committed to promoting access to quality and affordable healthcare through the Universal Health Coverage Program. Mbadi also highlighted investments in digital infrastructure to enhance connectivity and support the creative economy. He said the budget proposals were developed through public consultations to address challenges experienced in 2024, when new tax measures met strong resistance from citizens. Therefore, he said, the 2025/2026 budget focuses on easing the tax burden on Kenyans by broadening the tax base and improving tax compliance.
TimesLIVE
12-06-2025
- Business
- TimesLIVE
Kenya's budget to weigh revenue growth against public outrage
Kenya's finance minister will present a budget on Thursday aimed at boosting revenues to service debt while avoiding tax measures that triggered the kind of deadly protests that rocked East Africa's biggest economy last year. President William Ruto's administration has been struggling to narrow the fiscal deficit and govern under a heavy total debt-to-GDP ratio of about two-thirds, well above the 55% level considered a sustainable threshold. The government is seeking new sources of funding after last year's countrywide protests forced it to pursue austerity measures and scrap planned tax hikes worth more than 346 billion Kenyan shillings ($2.7bn). 'Kenyans cannot bear more tax,' finance minister John Mbadi said on Wednesday. 'For the first time, we have not added taxes in the current finance bill as has been the case before.' Critics have accused the government of using the budget to increase indirect taxes and infringe on privacy by empowering the tax authority to spy on people's bank accounts and mobile money transactions. But Mbadi said on Wednesday the revenue authority must be empowered to collect taxes to run the country. In place of hiking individual taxes, Mbadi is looking to widen the tax base, improve compliance and cut spending, said John Kuria, a tax specialist and partner at Kody Africa. 'They understand that people are not very happy, especially with the government and how the taxes are being used,' Kuria said. Despite government attempts to tighten expenditure and crack down on fraud, 'I think we're still going to have a significant funding shortfall,' he said. While the proposed budget outlines credible measures to reduce the fiscal deficit, the challenge lies in implementation, which Kenya has struggled with historically, said Shani Smit-Lengton, senior economist at Oxford Economics Africa. This often results in midyear revisions through supplementary budgets, which erode fiscal credibility, Smit-Lengton told Reuters via email. Kenya said in March it had applied for a new lending programme from the International Monetary Fund (IMF) after abandoning the final review on the previous IMF programme. In February it joined a fast-growing club of African nations that have gone to the market to borrow cash to pay off maturing debts in a bid to smooth out liabilities and ring-fence critical expenditures like health. 'This year, the stakes are higher: the government must demonstrate improved budget discipline to bolster its case for a new IMF programme, while also managing public sentiment to avoid social unrest. 'Achieving this balance will be critical to maintaining both investor confidence and domestic stability,' Smit-Lengton said, adding that the government's target of reducing the fiscal deficit to 4.5% in the next financial year was overly optimistic.
Time of India
26-05-2025
- Business
- Time of India
Kenya's government to sell more of its stake in Safaricom, finance minister says
NAIROBI: Kenya's government plans to sell more of its shareholding in telecom operator Safaricom , Finance Minister John Mbadi was cited as saying in Kenyan newspaper Business Daily on Monday. The government aims to raise 149 billion shillings ($1.16 billion) in the 2025/26 financial year through the sale of stakes in companies it has share in, including selling more of its ownership of Safaricom, Mbadi told the Business Daily in an interview. At present, the government owns a 35% stake in the operator after it sold a 25% stake in it via an initial public offering in 2008.
Zawya
28-02-2025
- Business
- Zawya
Kenya will wait to draw down $1.5bln UAE loan, finance minister says
Kenya will wait to draw cash from a $1.5 billion privately placed bond in the United Arab Emirates so that it can fit into its budget plans for this financial year, Finance Minister John Mbadi said on Friday. The East African nation has struggled with a surge in debt service costs in recent years following a borrowing spree and is seeking to put its financing on a more solid footing while talks are already underway with the International Monetary Fund over a new lending programme once the current one expires in April. "The reason why we have not done it is that we have to do it within our fiscal framework," Mbadi told Reuters, in reference to tapping cash from the UAE loan. Kenya has also raised $1.5 billion in a new 10-year dollar bond this week to manage upcoming maturities. By the end of June, Mbadi added, the government is expecting more than $950 million in funding from other external sources, including the World Bank, the African Development Bank, Italy and Germany. "We are still holding out to see exactly how much budget gap we will still have from the external finances before we draw the (UAE) money," said Mbadi, speaking by phone from Nairobi. The country's fiscal year runs from July 1 till June 30. Kenya's move to borrow from the UAE marks a new source of funding, after China scaled back its lending to Africa and a surge in Eurobond yields hindered frontier issuers. Kenyan President William Ruto has also moved to strengthen trade ties with the UAE since taking office in October 2022. The UAE lending, agreed last year, has an 8.25% interest rate and will be repaid in $500 million instalments in 2032, 2034 and 2036, Mbadi said. "We can use it partly for liability management, partly for budgetary support, or exclusively for budgetary support," he said. The government will use $900 million of the $1.5 billion bond issued this week to buy back a 2027-maturing Eurobond, Mbadi said, and will use the balance to retire syndicated loans that are falling due later this year. (Reporting by Duncan Miriri Editing by Gareth Jones)
Reuters
28-02-2025
- Business
- Reuters
Kenya will wait to draw down $1.5 bln UAE loan, finance minister says
CAPE TOWN, Feb 28 (Reuters) - Kenya will wait to draw cash from a $1.5 billion privately placed bond in the United Arab Emirates so that it can fit into its budget plans for this financial year, Finance Minister John Mbadi said on Friday. The East African nation has struggled with a surge in debt service costs in recent years following a borrowing spree and is seeking to put its financing on a more solid footing while talks are already underway with the International Monetary Fund over a new lending programme once the current one expires in April. "The reason why we have not done it is that we have to do it within our fiscal framework," Mbadi told Reuters, in reference to tapping cash from the UAE loan. Kenya has also raised $1.5 billion in a new 10-year dollar bond this week to manage upcoming maturities. By the end of June, Mbadi added, the government is expecting more than $950 million in funding from other external sources, including the World Bank, the African Development Bank, Italy and Germany. "We are still holding out to see exactly how much budget gap we will still have from the external finances before we draw the (UAE) money," said Mbadi, speaking by phone from Nairobi. The country's fiscal year runs from July 1 till June 30. Kenya's move to borrow from the UAE marks a new source of funding, after China scaled back its lending to Africa and a surge in Eurobond yields hindered frontier issuers. Kenyan President William Ruto has also moved to strengthen trade ties with the UAE since taking office in October 2022. The UAE lending, agreed last year, has an 8.25% interest rate and will be repaid in $500 million instalments in 2032, 2034 and 2036, Mbadi said. "We can use it partly for liability management, partly for budgetary support, or exclusively for budgetary support," he said. The government will use $900 million of the $1.5 billion bond issued this week to buy back a 2027-maturing Eurobond, Mbadi said, and will use the balance to retire syndicated loans that are falling due later this year.
