The National Treasury and Economic Planning has released its Statement of Actual Revenues and Net Exchequer Issues for the period ending 30th September 2025, painting a mixed picture of Kenya’s public finances at the close of the first quarter of the 2025/2026 financial year.
The report, published in the latest Kenya Gazette, shows that the government collected and borrowed a total of KSh 1.03 trillion, representing about 23 percent of its annual budget target of KSh 4.43 trillion.
Revenues Show Early Strain
Tax revenues — the mainstay of government income — stood at KSh 553.7 billion, well below the quarterly target when measured against the full-year projection of KSh 2.63 trillion.
Non-tax income such as fees, fines, and dividends also underperformed, reaching only KSh 21.6 billion out of a target of KSh 127.6 billion.
The government’s domestic borrowing fared better, with KSh 425.7 billion raised in the first quarter — roughly 39 percent of the full-year borrowing plan — indicating continued investor confidence in government securities.
However, external loans and grants contributed a mere KSh 18.7 billion, pointing to sluggish inflows from development partners.
How the Money Was Spent
On the expenditure side, the Treasury released a total of KSh 1.02 trillion by the end of September.
The lion’s share — KSh 546.8 billion — went toward public debt servicing and pensions, underscoring the heavy fiscal burden of repayment obligations.
Recurrent expenditure, which covers salaries and government operations, consumed KSh 366.5 billion, while development spending amounted to KSh 43.3 billion, reflecting slow project implementation.
Counties received KSh 66.1 billion in equitable share transfers out of their KSh 415 billion annual allocation. The report also notes that the Exchequer Balance (unspent funds) stood at KSh 8.95 billion by month’s end.
Signs of Progress Amid Fiscal Strain
Observers have praised the Treasury’s commitment to transparency by regularly publishing detailed financial data.
The early prioritization of debt repayment has also been viewed as a show of fiscal discipline, ensuring Kenya remains in good standing with lenders and credit markets.
Additionally, the steady flow of funds to county governments has been credited with sustaining basic services across the devolved units.
Domestic borrowing, too, is performing relatively well, with nearly 40 percent of annual targets met — a sign that local investors still have faith in Treasury bonds and bills.
Challenges That Demand Attention
However, the report also lays bare several worrying trends;
The slow pace of development spending — only about 10 percent of the annual allocation — suggests many infrastructure and growth projects have yet to take off.
Revenue shortfalls, particularly in tax and non-tax collections, hint at continued economic sluggishness or inefficiencies in enforcement.
Perhaps most concerning, more than half of all government spending went to service debt, crowding out funding for healthcare, education, and development projects.
The limited inflow of external loans and grants — only KSh 18.7 billion — may signal delays in project approvals or disbursements from development partners.
What It Means for Kenyans
For ordinary citizens, these numbers tell a story beyond the spreadsheets: Kenya is still walking a tightrope between keeping the economy running and managing its debt.
Essential services such as health, education, and security are being sustained, but development projects may progress slowly if revenue performance does not improve.
Economists warn that an overreliance on domestic borrowing could crowd out private investment, while low foreign funding may delay infrastructure growth.
A Call for Fiscal Reforms
To steady the nation’s fiscal ship, analysts recommend;
Strengthening tax compliance and digital collection systems.
Channeling borrowed funds into growth-oriented projects instead of recurrent expenditure.
Accelerating project implementation to create jobs and stimulate growth.
Negotiating better debt terms to ease repayment pressure.
The Bottom Line
By the end of September 2025, Kenya had collected roughly a quarter of its projected annual revenues and spent a similar share of its budget. The government deserves credit for transparency and fiscal responsibility, but the real test lies in improving revenue collection, boosting development spending, and balancing debt obligations with public service delivery.
As the financial year unfolds, the Treasury’s next moves will determine whether Kenya can sustain growth without sinking deeper into debt dependency.
The report, published in the latest Kenya Gazette, shows that the government collected and borrowed a total of KSh 1.03 trillion, representing about 23 percent of its annual budget target of KSh 4.43 trillion.
Revenues Show Early Strain
Tax revenues — the mainstay of government income — stood at KSh 553.7 billion, well below the quarterly target when measured against the full-year projection of KSh 2.63 trillion.
Non-tax income such as fees, fines, and dividends also underperformed, reaching only KSh 21.6 billion out of a target of KSh 127.6 billion.
The government’s domestic borrowing fared better, with KSh 425.7 billion raised in the first quarter — roughly 39 percent of the full-year borrowing plan — indicating continued investor confidence in government securities.
However, external loans and grants contributed a mere KSh 18.7 billion, pointing to sluggish inflows from development partners.
How the Money Was Spent
On the expenditure side, the Treasury released a total of KSh 1.02 trillion by the end of September.
The lion’s share — KSh 546.8 billion — went toward public debt servicing and pensions, underscoring the heavy fiscal burden of repayment obligations.
Recurrent expenditure, which covers salaries and government operations, consumed KSh 366.5 billion, while development spending amounted to KSh 43.3 billion, reflecting slow project implementation.
Counties received KSh 66.1 billion in equitable share transfers out of their KSh 415 billion annual allocation. The report also notes that the Exchequer Balance (unspent funds) stood at KSh 8.95 billion by month’s end.
Signs of Progress Amid Fiscal Strain
Observers have praised the Treasury’s commitment to transparency by regularly publishing detailed financial data.
The early prioritization of debt repayment has also been viewed as a show of fiscal discipline, ensuring Kenya remains in good standing with lenders and credit markets.
Additionally, the steady flow of funds to county governments has been credited with sustaining basic services across the devolved units.
Domestic borrowing, too, is performing relatively well, with nearly 40 percent of annual targets met — a sign that local investors still have faith in Treasury bonds and bills.
Challenges That Demand Attention
However, the report also lays bare several worrying trends;
The slow pace of development spending — only about 10 percent of the annual allocation — suggests many infrastructure and growth projects have yet to take off.
Revenue shortfalls, particularly in tax and non-tax collections, hint at continued economic sluggishness or inefficiencies in enforcement.
Perhaps most concerning, more than half of all government spending went to service debt, crowding out funding for healthcare, education, and development projects.
The limited inflow of external loans and grants — only KSh 18.7 billion — may signal delays in project approvals or disbursements from development partners.
What It Means for Kenyans
For ordinary citizens, these numbers tell a story beyond the spreadsheets: Kenya is still walking a tightrope between keeping the economy running and managing its debt.
Essential services such as health, education, and security are being sustained, but development projects may progress slowly if revenue performance does not improve.
Economists warn that an overreliance on domestic borrowing could crowd out private investment, while low foreign funding may delay infrastructure growth.
A Call for Fiscal Reforms
To steady the nation’s fiscal ship, analysts recommend;
Strengthening tax compliance and digital collection systems.
Channeling borrowed funds into growth-oriented projects instead of recurrent expenditure.
Accelerating project implementation to create jobs and stimulate growth.
Negotiating better debt terms to ease repayment pressure.
The Bottom Line
By the end of September 2025, Kenya had collected roughly a quarter of its projected annual revenues and spent a similar share of its budget. The government deserves credit for transparency and fiscal responsibility, but the real test lies in improving revenue collection, boosting development spending, and balancing debt obligations with public service delivery.
As the financial year unfolds, the Treasury’s next moves will determine whether Kenya can sustain growth without sinking deeper into debt dependency.
