Kenya can't succeed with public budgets alone- CS Mbadi

National Treasury CS John Mbadi during the rollout of the e-GP system at the Treasury Building in Nairobi on August 28, 2025. [Boniface Okendo, Standard]

Due to the continuous shrinking of traditional ways of financing the budget, the National Treasury Cabinet Secretary John Mbadi has admitted that public budgets alone cannot finance Kenya’s economic transformation.

While public financing is important, the CS has said, on its own, it cannot carry the weight of money chain, hence the need for longterm risk capital from private markets to fill the gap that banks or the exchequer cannot fill.

This while saying that the government is key to partnership with the venture capitals in the form of Public Private Partnerships.

“We can't succeed with public budgets alone. The bilaterals are not as beneficial as they used to be, and the multilaterals that we were used to, are also facing strained resources and they will never change,” CS Mbadi.

Speaking in Nairobi during the 9th Annual Venture Capital Conference by the East Africa Venture Capital Association (EAVCA), the CS noted that private sector will play a critical role in redefining reliance on traditional sources of budget financing.

According to the CS, private credit, venture capital and private equity are essential for transformation, in agriculture, affordable housing, manufacturing, the digital economy and climate-resilient infrastructure sectors.

The cabinet secretary further stated that, as a multiplier effect, private sector investments would create direct jobs, unlock opportunities for small suppliers and service providers, and also build ecosystems where young people can thrive.

The National Treasury says it is critical to shift the burden of capital mobilisation for productive investments in infrastructure, technology and enterprise growth to the private sector, which could then allow the government to focus its scarce resources on essential public services such as education, security and health.

East Africa's economies are not insulated from global shocks such as pandemics and commodity price swings to currency volatility and climate change.

“Public budgets tend to react to these shocks, leading to cuts in expenses,” Mbadi said, adding that private capital helps enterprises to adapt, innovate and recover faster.

“We have identified procurement as a source of leakages in expenditure rationalisation, this is why we are digitising procurement systems and which has received major pushbacks from the counties,” he said.

Speaking at the conference, Britam CEO Tom Gitogo urged venture capitalists to consider lowering some of their minimum lending tickets when need be.

“But as a growing economy, perhaps equally if not more important is the small tickets. This is because most businesses that are big today started off as small businesses. While we could do it directly, some of their infrastructures do not allow, as some of the funds they manage are huge ,” he said.

David Owino, the Board Chairman of EAVCA, said that harmonised environment regionally is essential for capital catalisation and businesses.

“By the number of debt fund that are coming into the country, Kenya is a viable market for debt investment,” Owino said, noting that Central Bank regulations on lenders are as a result of increased interest of people getting loans away from traditional systems.