- President William Ruto signed the Supplementary Appropriation Bill 2025 into law, increasing recurring expenditures for the fiscal year 2024/25.
- The Treasury Cabinet Secretary (CS), John Mbadi, stated that a significant portion of the collected revenues is allocated to salaries, thus limiting funds available for developmental projects.
- Mbadi dissected the annual spending of the national government on salaries and debt servicing.
The journalist Wycliffe Musalia from Pawonation.com.co.ke boasts more than six years of expertise in areas such as finance, business, technology, and climate reporting. This extensive background provides him with significant understanding of both Kenya’s and international economic patterns.
President William Ruto's administration consumes nearly KSh 1 trillion annually in wages and salaries.
Data from the Salaries and Remuneration Commission (SRC) showed that the nation's payroll expenses had risen by KSh 29 billion as of March 2024.
How Kenya allocates its KSh 2 trillion in annual tax revenue.
Wages and salaries
As stated by the Treasury Cabinet Secretary (CS) John Mbadi, the government spends approximately KSh 80 billion each month on paying employees' wages and salaries.
Mbadi stated that the salary expenditure under the Kenya Kwanza administration is nearly KSh 1 trillion annually, characterizing it as a costly government.
"We're dealing with an extremely costly administration here. Currently, we shell out KSh 80 billion each month at the national government level just for wages. Annually, this amounts to KSh 960 billion, soon approaching a trillion," stated Mbadi during a television interview on Wednesday, March 19.
Loan repayment
The Cabinet Secretary mentioned that out of the KSh 2.5 trillion gathered by the Kenya Revenue Authority annually, KSh 1.1 trillion is allocated towards debt servicing each year, which leaves minimal funds available for developmental projects due to depleted government resources.
"We aim to collect KSh 2.5 trillion, with approximately KSh 1.1 trillion allocated for loan repayments. This raises the question: Where does the funding for development come from? Consequently, this is why our economy often experiences slowdowns," he stated.
Is Kenya going to keep taking loans?
Mbadi stated that the nation's progress is hindered by a budget shortfall, attributing the limited resources for advancement solely to aid from donors and subsidies.
He remarked, 'We are fortunate to have development partners who provide funds through grants, aiding our growth.'
The CS emphasized the importance of taking out loans to keep Kenya's deficit below 5% of GDP.
"Regarding the budget deficit, the approach is not to cease borrowing altogether. Every nation borrows money; it’s an essential practice for all economies. The key is to effectively control your deficit relative to your Gross Domestic Product on a consistent basis," clarified the CS.
What is the present amount of the budget deficit?
President Ruto enacted the Supplementary Appropriation II Bill, thereby augmenting his government's spending.
The proposed bill raises recurring expenses, encompassing regular activities such as wages, by an additional KSh 138.87 billion.
The legislation raised the fiscal deficit to KSh 875.54 billion or 5.02%, an increase from KSh 862.47 billion or 4.97% of GDP as suggested in the Supplementary Budget II presented to Parliament in February 2025.
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