Budget debate has moved beyond taxes to accountability and growth

Budget briefcase on display. [File, Standard]

As our current Budget preparation season enters its final month, with the Budget Statement set to be delivered on Thursday, June 11, it is evident that public engagement is at its highest ever point in the life of this nation.

A lifetime ago, the Budget speech was read against a backdrop of speculation, stockouts and hoarding in high anticipation of tax, and hence retail price, hikes.

A generation ago, the public, especially civil society groups, figured out it was just as important to keep an eye on public expenditure patterns and promises as it was the Finance Bill’s tax tweaks.

With the coming into force of the 2010 constitution, public engagement is now a codified principle and established practice, despite successive Parliaments failing to properly anchor it in policy and law.

In fact, we have now elevated the budget debate beyond spending and tax proposals to powerful discourses around our debt mountain and hard accountability questions about spending outcomes for the people, not just what we are spending but what we are buying.

The digging will get deeper as we increasingly appreciate that the government is not the economy, and the real discussion we should be having is about innovative resource development for wealth creation before aggressive revenue mobilisation to finance expensive, bloated government.

Put it this way.  This is our essential contradiction going into 2026/27, an administration hell-bent on leashing Kenyans, as the 2026 Finance Bill basically seeks, instead of unleashing Kenya’s potential.

If we had anything close to a coherent alternative government, they would see the “It’s the economy, stupid!” talking points screaming at them for 2027; a “smaller government, bigger economy” policy agenda writing itself.

Whatever you say about Kibaki, you cannot dispute that he didn’t leash the economy; he unleashed it!  For Kenyans, we have stabilised, which I guess means “controlled the wildness in the economy” is yesterday’s news.  Today, to paraphrase former US President Ronald Reagan, if it moves, tax it. So, our debt bondage is now tax slavery.

You will hear none of this from the “anti-government” wing, unable to realise that this could be their ideal “Shadow Budget” response to an administration delivering its final full-year budget before the 2027 election.

Remember, we have an administration thrown into chaos by the Gen Z protests, which so badly impacted the 2024/25 budget that the current 2025/26 budget is basically a catch-up one, rather than the signature or flagship one as their mid-term moment.

Which means 2026/27 must be a political triple play of flagship budget as the term’s highlight, completion budget to finish what was started and pre-election budget of 2027 voter goodies.

Furthermore, the numbers will not lie at the end of a difficult 2026, with happenings in the Middle East already an early-year economic shock across all sectors, and a predicted super-El Niño, forget the current rains, as a frightening late-year economic tsunami that could turn Nairobi into Venice. 

Treasury’s five per cent growth prediction, down from 5.3 per cent, is already seriously out of date.  At the lower end, consensus forecasts are up to 10 per cent lower, like the IMF’s 4.5 per cent.

In political language, 2026 looks like a third successive slowing of economic growth.

Practically, this means Treasury’s 2026/27 revenue projections are already not worth the paper.

Since we have until May 25 to provide comments to Parliament on the 2026/27 Budget estimates, as well as the 2026 Finance Bill, we will return to matters of the economy, spending, revenue and debt in subsequent articles.  Let us instead continue our train of thought today around a smaller government, bigger economy.

We will link this to Treasury’s disingenuous May 8 deadline for views, proposals and innovative ideas for the June 11 Budget statement, not the Budget, knowing we had 5,306 pages of 2026/27 budget documentation already sitting in Parliament.

Remember too that part of this documentation includes much of the text for the Budget statement as already laid out in Section II (policy framework) of the 74-page Budget summary.

Here are a few “bigger economies” talking points that might feature in the statement, based on the areas in which Treasury had called for ideas.

First, on BETA and fixing structural imbalance in the economy, a deliberate step back to a holistic MSME policy platform, inclusive of women, youth and vulnerable groups, covering everything from regulation and taxes to financing and institutional and skills strengthening to market access and development.  Before the Hustler Fund, what happened to Biashara Kenya as the MSME super-platform, the equivalent of America’s Small Business Administration, that was more than just a pure money merger of our multiple empowerment funds?  Let us move from projectizing to institutionalising the MSME agenda.

Second, on proposals to scale up human capital, advance to a net-export economy, ensure reliable and affordable energy and strengthen transport and logistics, basically, the key elements of our so-called “First World” agenda. Isn’t now the time to speak to the overarching Sessional Paper that will succeed Kenya Vision 2030?  We seem to be approaching this ambitious agenda with a messy “spray and pray” array of sound, but scattered initiatives. No more sunroof talk, please!

Third, on macro-economic stability and resilience and domestic resource mobilisation, we have said this earlier; this is our moment to graduate from Revenue Mobilisation to Wealth Creation, in the sort of Resource to Wealth fashion that delivers a stable macro and sustained resilience.  Yes, this is also where we speak to our long-term security agenda on, say, energy, food and health.

Fourth, on fiscal discipline and prudent management of public resources, forget tired input-led theories like zero-based budgeting.  If we bravely think of the public sector from an optimising perspective, then here is the pathway to the four-part reform and transformation agenda that takes us to upper-middle income status: Public Sector Renewal, Private Sector Development, State Enterprise Optimisation and Digital Evolution.  This is actually part of what BETA promises.

Hell, shouldn’t the Statement set out our intentional pathway from “Tenderpreneurial” to “Entrepreneurial” government that is mission-driven and catalytic, market-oriented yet citizen-focused, enterprising and results-based, a platform for Kenyans, not a bureaucrats’ bureaucracy?

Furthermore, we have been very quiet about a recent finding that the World Bank long rejected but now acknowledges: the catalytic role of Industrial Policy in strategically leveraging long-term economic progress.  Let’s talk about it in the Statement if we believe it underpins our ambitions.

What about smaller government?  We will discuss this further in the next article, but consider this data story: Our 2026/27 Budget adds up to Sh4.823 trillion, although Treasury has it at Sh4.785 trillion in the budget books.  If we add back public debt redemptions of Sh1.061 trillion, normally excluded assuming rollover or refinancing, that is a gross budget of Sh5.884 trillion.

To leash or unleash Kenyans? That is the 2026/27 question in more ways than one. Smaller government, bigger economy? That may be one framing of the 2027 electoral issues question.

To paraphrase Einstein, you can’t solve a problem with the same thinking that caused the problem.