Civil Society Raises Alarm Over Kenya’s Fiscal Crisis
Four out of ten Kenyans live in poverty, and many more risk slipping into destitution unless urgent action is taken to manage public resources prudently. This warning came from Diana Gichengo, Director of Transparency at the Institute of Social Accountability (TISA), during a press briefing by the Okoa Uchumi Campaign.
The coalition of civil society organizations urged the government to allocate resources wisely, as essential public services, including agriculture, education, and health, continue to deteriorate.
Against this backdrop, Okoa Uchumi submitted its recommendations on the 2025 Budget Policy Statement (BPS) and the Medium-Term Debt Strategy (MTDS) to the National Treasury, National Assembly, and Senate. Their key concerns included Kenya’s ballooning public debt, widening fiscal deficit, and lack of transparency in budget formulation.
“The burden of Kenya’s fiscal position falls heavily on citizens, with the fiscal deficit for FY 2025/26 projected at Ksh. 831 billion (4.3% of GDP). However, our computation indicates the deficit could be as high as 5.1%,” the coalition stated.
The coalition also expressed outrage over findings in the Auditor General’s report released on March 4, 2025, which exposed massive wastage and loss of public resources.
The report flagged critical deficiencies in implementing the Social Health Insurance (SHI) and Social Health Authority (SHA) initiatives, mismanagement of the Hustler Fund, and irregular compensation through court awards.
The coalition warned that the government’s excessive expenditure, including budgeted and legislative corruption, was the real problem—not revenue collection.
Annet Nerima, Program Manager at the Kenya Human Rights Commission, raised concerns over Kenya’s rising national debt-to-GDP ratio, projected to exceed sustainable levels at 63.6% against the 55% debt anchor. She highlighted that 82.3% of borrowing would come from domestic sources, raising fears of private sector stagnation.
“This situation encourages banks to prefer investing in government securities rather than facilitating employment creation by lending to private enterprises,” she noted.
She also questioned why interest rates remain high despite government borrowing, warning that domestic borrowing might be indirectly funding corruption.
The Okoa Uchumi Campaign flagged inconsistencies in the BPS and MTDS documents, noting a Ksh. 73 billion variance in expenditure figures and discrepancies in nominal GDP projections. They accused the government of inflating GDP figures to downplay the fiscal deficit.
“We are lost as to the intention of these conflicting figures from the government,” the coalition stated, calling for transparency in Kenya’s economic data.
The coalition further criticized the government’s unrealistic revenue projections of Ksh. 2.83 trillion, warning that this could lead to additional taxation or more borrowing.
“Punda Amechoka,” they declared, emphasizing that citizens and businesses could not bear additional taxes.
They urged the government to cut unnecessary expenditures instead of overburdening Kenyans with taxes. Employers and employees alike have voiced concerns that further tax increases would cripple household budgets and business investments.
Mark Amani of Kongamano La Mapinduzi emphasized the need for transparency and accountability in public finances, urging Parliament to compel the Executive to disclose funds allocated to SHA, NHIF, and the Hustler Fund.
“The ownership and cost justification of the SHA technology system must be publicly disclosed,” he demanded, calling for the immediate cancellation of all SHA/SHI contracts due to procurement irregularities.
The coalition also condemned the Public Audit Amendment Bill 2024, describing it as a deliberate attempt to weaken the Office of the Auditor General (OAG) and limit its independence.
Wanja Maina, Lead at Hummingbird Grassroots Center, noted that 67.5% of the Consolidated Fund Services allocation in FY 2025/26 would go to debt servicing rather than development projects.
She urged the government to prioritize debt management and ease monetary policy to reduce interbank lending rates, allowing the private sector to access affordable credit.
“A balanced revenue mobilization strategy should focus on tax compliance and efficiency rather than introducing new tax burdens,” she stated.
The coalition also called for greater public participation in the budget-making process to enhance transparency and accountability. They emphasized that resource allocation should prioritize agriculture, micro, small, and medium enterprises (MSMEs), and social welfare to boost economic resilience.
“Investing in agriculture improves food security and job creation, while supporting MSMEs drives innovation and economic growth,” they noted.
The Okoa Uchumi Campaign urged Parliament to scrutinize discrepancies in the BPS and MTDS, demanding that the National Treasury provide accurate fiscal projections and conduct a forensic audit of Kenya’s public debt.
“The government must take immediate action to secure Kenya’s economic future through prudent public finance management,” the coalition stated.
They also called on Kenyans to remain engaged in the budget process and revenue-raising measures to hold the government accountable.
