Government seeks additional Sh18.9 billion to fund shortfalls in 2024-2025 FY budget

Treasury CS John Mbadi during the 2025 Budget reading on June 12, 2025 at Parliament. [Elvis Ogina, Standard] The government is now seeking an additional Sh18.9 billion in its third Supplementary budget to address revenue shortfalls in the 2024/2025 financial year. According to a report tabled before the House, the government was grappling with a Sh253 billion revenue shortfall as of April 2024, having managed to collect only Sh2.2 trillion out of a targeted Sh2.5 trillion in revenue. This means that the National Treasury will now have to borrow funding to address the revenue gaps in the 2024/2025 FY budget. It also means that by the dint of the supplementary budget estimates III, the total 2024/2025 budget has increased to Sh3.6 trillion from Sh3.5 trillion. Notably, the request for additional funding comes just days after the National Assembly gave the green light for a Sh4.2 trillion budget for the 2025/2026 financial year "The below target performance in the total revenue was on account of a shortfall registered in the collections of ordinary revenue by Ksh195.3 billion and a shortfall in ministerial AIA of Sh57.7 billion," reads the report in part. Cabinet secretary John Mbadi, through the report, clarified that the current budget estimates were prepared to allow additional expenditure for both government and development partners, allow reallocations, provide for compensation to employees (personal emoluments) and gratuity, take care of adjustments of receipts of Appropriation in Aid (AIA) and re-align budgetary provisions to projected levels of absorption. He further admitted to challenges in resource raising during the 2024/2025 FY. "Since the approval of the financial year 2024/2025 supplementary estimates II, the National Treasury has received additional requests for funding to cater for emerging priorities and shortfalls under critical expenditures. Included in the Financial year's supplementary estimates No II is additional expenditure to cater for salaries shortfall, security-related interventions, among other emerging priorities," he stated. Further, the Supplementary III estimates come two months after the National Treasury in March approved additional expenditure of Sh34 billion under article 223 of the constitution, following the Supplementary Budget estimates II. It comprised Sh28.5 billion under recurrent expenditure and Sh5.5 billion under development. "Due to adjustments in the FY 2024/2025 supplementary NO II, some programs have exceeded the 10 percent threshold. The National Treasury is therefore requesting special approval of the expenditure adjustments which are beyond the 10 percent threshold in accordance with regulation 40 (9) of the Public Finance Management Regulations 2011," adds the report. And Under article 223 of the constitution, Ministries, Departments and Agencies (MDAs) that benefited from the Sh34 billion increment include the National Treasury which got an additional Sh5 billion for the leasing of Police Motor vehicles, State House Sh2.75 billion, National Police Service Sh1.15 billion, university education Sh1 billion and cash transfer Sh1 billion. Moreover, in the current Supplementary Estimates III, MDAs that got a financial boost include the National Treasury that got a Sh5.85 billion increase, the State Department for Social Protection and Senior Citizens with a Sh12.5 billion increase, the State Department for Housing Sh7.787 billion and the water and sanitation department Sh3.1 billion. The National Intelligence Services (NIS) got an additional Sh3 billion, the State Department for Lands and Physical Planning Sh1 billion, State Department for Information Communication Sh2.2 billion, State Department for Sports Sh1.69 billion, the Office of the President Sh60 million, Office of the Deputy President Sh100 million, National Police Service (NPS) Sh944.27 million and the State Department for Higher Education Sh3.47 billion. The Teachers Service Commission (TSC) got Sh3.3 billion. On the flipside, there were reductions in allocations such as the vote on the State Department for Basic Education which was reviewed downwards by Sh2.15 billion against the Sh140.6 billion that was allocated for the year, the State Department for Medical Services by Sh1.57 billion, the department for Roads Sh11.8 billion, transport by Sh1.675 billion, irrigation by Sh1.43 billion, State Department for Blue Economy by Sh1.21 billion, State Department for ASALs and Regional Development by Sh714. 9 million and the State Department for Economic planning budget which was reduced by Sh12.04 billion.

Government seeks additional Sh18.9 billion to fund shortfalls in 2024-2025 FY budget

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Government seeks additional Sh18.9 billion to fund shortfalls in 2024-2025 FY budget

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