Inside President Ruto’s Sh2.88 Trillion Budget: Priorities, Politics and Public Pressure

Kenya, January 09, 2026 - President William Ruto’s administration is rolling out one of the most consequential national budgets in Kenya’s recent history, estimated at about Sh2.88 trillion for the first half of the 2025/26 financial year, with the full fiscal programme forming part of a larger Sh4.2 trillion expenditure plan approved by Cabinet and tabled for Parliamentary ratification.

A Budget Shaped by Economic Strain and Political Reality

The 2025/26 national budget framework was initially outlined in the Budget Policy Statement presented in June 2025, with total planned government spending sitting at Sh4.2 trillion, a modest reduction from earlier proposals after significant political pushback and economic stress that followed mass protests over controversial tax hikes.

This disbursement, including the Sh2.88 trillion component mentioned in oversight documents, covers the most immediate appropriations under the Appropriations Bill 2025, which President Ruto signed into law. It authorises the Treasury to release Sh1.88 trillion from the Consolidated Fund and use Sh671.99 billion collected as Appropriations in Aid by ministries, departments and agencies, to finance public services between July 2025 and June 2026.

Where the Money Comes From: Revenue, Taxes, and Borrowing

Kenya’s budget financing relies on a mix of: Tax revenue, projected ordinary revenue is expected to hit about Sh3.0 trillion, buoyed by strengthened tax administration and an expanded tax base. Borrowing, Kenya plans both domestic and external loans to fund deficits. The national debt servicing cost has ballooned in recent years, consuming significant portions of public expenditure.

Appropriations in Aid, monies collected by ministries that can be reinvested in services, including user fees and other levies approved under law.

The combination of larger projected revenues and borrowing is intended to reduce reliance on new tax hikes that provoked the Finance Bill protests of 2024, which led to the scrapping of proposed tax increases worth more than Sh346 billion after widespread public opposition.

Key Budget Priorities and Allocations

The broader 2025/26 budget highlights several national priorities:

Education

Education has traditionally been a major budget item. For example, previous estimates showed the sector receiving a large share (e.g., over Sh700 billion in earlier plans) to support school capitation, teacher salaries, TVET and higher education.