NAIROBI, Kenya, Oct 6 – Government revenue collection dropped by Sh25.1 billion in July to Sh212.6 billion, falling short of the Sh237.7 billion target, according to the National Treasury’s latest 2025 Budget Review and Outlook Paper (BROP).
The decline underscores Kenya’s continued fiscal strain, as expenditure pressures mount against sluggish revenue growth.
For the 2025/26 financial year, Treasury projects total revenue at Sh3.32 trillion, representing 17.2 percent of GDP, against total expenditure and net lending of Sh4.27 trillion (22.2 percent of GDP) — leaving a deficit of Sh900.9 billion or 4.7 percent of GDP.
The Treasury plans to finance the deficit through Sh287.4 billion in foreign borrowing and Sh613.5 billion in domestic financing.
“Due to adjustments in expenditure and revenue, the overall fiscal deficit, including grants, is projected at KSh900.9 billion (4.7 percent of GDP),” the report stated.
To boost revenue performance, the government will roll out a National Tax Policy and Medium-Term Revenue Strategy, strengthen tax administration, and expand non-tax revenues through reforms in state corporations and fees.
The Treasury also outlined spending reforms aimed at enhancing efficiency, including curbing non-essential expenditure, prioritizing completion of ongoing projects, expanding Public-Private Partnerships (PPPs), and improving pension management.
“The Government will continue implementing measures aimed at strengthening expenditure controls and enhancing the efficiency and effectiveness of public spending,” Treasury noted.
The shortfall comes amid tightening fiscal conditions and rising debt servicing costs, which continue to pressure Kenya’s public finances.
