Mbadi pushes back on calls to cut State's wasteful spending

National Treasury Cabinet Secretary, John Mbadi during a media engagement on the Finance Bill 2026 in Nairobi. [Benard Orwongo, Standard]

National Treasury Cabinet Secretary John Mbadi has pushed back against calls by Kenyans to cut back government spending.

Mbadi on Thursday dismissed calls by a cross-section of Kenyans to curb government spending, terming the upcoming 2026-27 spending plan a “very inflexible budget”.

He even went on to provide a breakdown of how every shilling will be spent over the current financial year to June 30 in a bid to show that cutting spending by even a shilling would result in denying Kenyans crucial services. 

This is despite his own past acknowledgement that Kenya has no further borrowing headroom to fund an ever-widening budget deficit, while taxing Kenyans more to increase revenues and continue the state’s wanton spending is also proving untenable as Kenyans push back against higher taxes. 

“What we have is a very rigid budget… we have a budget with very limited space to manoeuvre. I hear people talk a lot about cuts here and there. There is very little to cut,” said Mbadi when he appeared before the National Assembly’s Budget and Appropriations Committee (BAC). 

At the meeting, he broke down his spending plans for the current financial year, where he noted that altering spending plans would leave critical public services such as health and education without funding. 

The government expects revenues to be in the region of Sh3.6 trillion, of which Sh1.5 trillion will go to the Consolidated Fund Service that caters to first-charge items such as public debt service, which includes interest payments and principal redemptions; pensions and gratuities; and salaries for constitutional and independent offices. 

Mbadi explained that the balance of about Sh1.5 trillion has to be shared between paying the public sector wage bill, which is nearly Sh1 trillion annually, and counties that take at least Sh420 billion. 

He also said this is even before critical services such as health, education and security have been allocated any funds. 

“I can go on and on. What I can say is we have a very inflexible budget,” said Mbadi.  

Mbadi also took aim at Kiharu MP Ndindi Nyoro, who earlier in the week had made a presentation to the same committee, presenting areas where the government could cut unnecessary spending, which he said had the potential to save up to Sh100 billion. 

Among the areas that Nyoro noted would help reduce government spending is foreign travel, where he said limiting travel by government to only critical areas could spare money that can be redeployed elsewhere to reduce the cost of living for Kenyans, but also reduce the need to borrow to fund budget holes or tax Kenyans more. 

He also suggested cutting the National Government Constituencies Development Fund (NG-CDF) by Sh2 billion, saying the fund, as well as other taxpayer institutions, should reduce spending during these dire times.

He noted that despite the difficulties that Kenyans are going through, some government entities have seen their allocations increase by up to 25 per cent over the current financial year. 

This week’s proposals by Nyoro are in addition to earlier suggestions that the government should temporarily reduce taxes on petroleum products, including scrapping Value Added Tax (VAT) and reducing the Road Maintenance Levy (RML) to Sh18 per litre of diesel and super petrol from the current Sh25. 

Mbadi, however, dismissed Nyoro’s proposals as populist and stated that they were not based on facts.  

“One of our friends is telling us to cut. He said we cut money from foreign travel and CDF,” said Mbadi at the meeting with BAC, during which he also dismissed savings made by cutting foreign travel as “paltry and would not do anything meaningful”. 

“If we remove the entire budget for foreign travel and make sure no one leaves this country for one year, how much cash will we be saving? It is Sh8.5 billion,” he said, adding that this would instead compromise the work done when government officials travel to represent Kenya.  

He went on, noting that “you talk so loudly like you want people to believe that you are the one who is learned, and you do not even talk with facts.”

Mabdi also appeared to bait MPs, noting that they too spend a substantial amount on foreign travel that would also be cut. 

“Out of that Sh8 billion, Parliament consumes Sh3 billion, and the executive consumes only Sh4.9 billion, out of which foreign affairs consumes Sh2.9 billion … foreign affairs without travelling – what sort of foreign affairs would that be?” he posed to the MPs. 

“So you see, when you see people standing here (before the committee), and they make wild statements on how we can save money by cutting on foreign travel, making Kenyans think that Kenya is a travelling nation and that all we have is a government that spends so much on foreign travel. It’s a myth … Sh8.5 billion for the whole government, including the judiciary and national, including executive, all the ministers. We are not spending so much.” 

Mbadi had earlier in the week at a different forum defended State House’s spending, also noting the Sh17 billion that State House is spending over the current financial year is marginal, which, if redeployed elsewhere, could not make a meaningful change.

The State House’s budget increased from Sh8.5 billion in the initial budget for the 2025-26 financial year to Sh17 billion in the first supplementary budget, which means it spends Sh43 million a day.  

Estimates by the Ministry of Education show that building a classroom costs between Sh800,00 and Sh1.2 million.

A fully equipped health centre with a bed capacity of 200 costs an estimated Sh50 million, going by different health centres put up by several county governments.  

“Many Kenyans want the State House budget to be reduced, but that money is very small and can’t even cover education,” said Mbadi. 

On Thursday, Mbadi’s resistance to adopting a slimmer budget was backed by MPs, an indication that Nyoro’s proposals are likely to flop when they are finally put to the legislators.

Other than the size of the budget, which has to be approved by Parliament, the MPs also have a major say in the taxation of petroleum products, as revisions on taxes have to go through Parliament.  

“There is really no place to cut. Even if we tried to cut, we would not find anywhere to cut. We have cut our development allocation by Sh100 billion,” said Atandi.

“We cannot cut foreign travel, we cannot cut CDF, we cannot cut salaries.” 

The MPs who make up the membership of the Budget and Appropriations Committee appeared to show support for Mbadi, with the chair noting that the “committee is aligned” with the proposals Treasury under Mbadi had made.

Other members of the committee commended Mbadi for democratising Treasury as well as leading public participation forums while making presentations on the budget that are devoid of jargon and easily understood by Kenyans, unlike other finance ministers.  

Despite pushback against calls to downsize and tighten the government’s belt, it is not lost on Mbadi that he will at some point have to make the decision to cut spending. 

Mbadi, in a recent press briefing, noted that Treasury is aware that it cannot raise taxes and also noted that there are limited options to borrow.