Kenya, 24 October 2025 - Kenya’s promise of austerity has hit a wall.
New data from the National Treasury shows the cost of running national government offices jumped by 31 percent in the first quarter of the 2025/26 fiscal year, despite repeated assurances from President William Ruto’s administration that it was cutting waste and tightening spending.
According to official expenditure reports reviewed by Business Daily Africa, ministries, departments and state agencies spent KSh 366.5 billion between July and September 2025, up from KSh 280.09 billion over the same period last year.
The increase represents an additional KSh 86.4 billion in recurrent expenses, covering salaries, allowances, maintenance and administrative costs.
Where the Money Went
The Teachers Service Commission (TSC) led the surge, with its expenditure rising to KSh 88.5 billion, a jump of 8.1 percent from last year, mainly due to ongoing teacher promotions and wage adjustments.
The National Police Service also recorded a 12.5 percent rise in recurrent spending, attributed to ongoing security operations and fuel costs, while the Ministry of Defence saw its budget rise by nearly 17.9 percent as regional deployments and logistics expenses grew.
Treasury data further shows that while government expenditure is rising, revenue collection underperformed. The Kenya Revenue Authority (KRA) collected KSh 553.7 billion in the quarter, well below its target, tightening fiscal space for development and debt repayment.
Promises vs Reality
The surge comes less than six months after President Ruto’s administration announced new austerity measures, including freezing non-essential travel, capping hospitality budgets, and merging duplicate parastatal roles.
“We cannot live beyond our means,” the President said during his June 2025 budget address, pledging to redirect public funds from recurrent expenditure to development.
Yet the latest Treasury numbers tell a different story. Analysts say the mismatch between rhetoric and reality underscores a broader struggle to curb public-sector inefficiency and political spending pressures.
Public finance expert Dr. X.N. Iraki mentioned that government austerity in Kenya “often collapses under political realities,” with wage demands, patronage hiring, and security costs making fiscal restraint difficult to sustain.
A Heavy Cost for Citizens
The rise in recurrent expenditure comes at a time when many Kenyans are tightening their own budgets amid a high cost of living and a depreciating shilling.
“When the government spends more on itself and less on development, citizens end up carrying the burden,” said Kwame Owino, CEO of the Institute of Economic Affairs (IEA), in an earlier analysis.
“You can’t preach austerity while public payrolls keep expanding.”
With total external debt surpassing US$45 billion, fiscal experts warn that ballooning operational costs could derail Kenya’s debt sustainability and force further domestic borrowing, driving up interest rates and crowding out private investment.
Parliament’s Role and Accountability
Despite Treasury proposals to cut recurrent spending from KSh 1.73 trillion to KSh 1.72 trillion, Parliament eventually approved KSh 1.47 trillion, still above the level needed to reverse the rising trend.
Opposition legislators have accused the government of masking political spending through supplementary budgets, while the Auditor-General’s office has flagged weak monitoring of travel, hospitality, and procurement budgets in several ministries.
“The government must show leadership from the top,” said Nandi Senator Samson Cherargei on X.
“You can’t talk about belt-tightening while expanding offices and hiring more advisors.”
The Bigger Picture
The renewed rise in recurrent costs mirrors a persistent structural issue in Kenya’s public finance system, where over 65 percent of the national budget goes to paying salaries and maintaining government functions, leaving little for development projects.
Economists say unless the Treasury enforces stricter spending discipline and enacts civil service reforms, Kenya risks sliding back into a cycle of debt-financed consumption, undermining its fiscal credibility with global lenders.
“We are living in a contradiction,” said economist Dr Sarah Ochieng, a policy analyst based in Nairobi.
“The government is promising austerity, but the numbers show expansion. This is not sustainable.”
Bottom Line
Kenya’s fiscal story remains one of paradox, a government urging citizens to tighten belts while its own keeps loosening.
For the Ruto administration, the next budget cycle may be the real test of whether austerity is policy or politics.
