Kanu party: Budget to hurt private sector, Kenyans

KANU Chairman Gideon Moi at AIC Milimani in Nakuru City during a Thanksgiving service on November 10, 2024. [Kipsang Joseph, Standard]

The Kanu party has poked holes in the 2025/2026 Sh4.29 trillion budget estimates presented yesterday in the National Assembly by Treasury Cabinet Secretary (CS) John Mbadi.

The party, through its chairperson Gideon Moi, in a statement, noted that the Budget failed to address the challenges Kenyans face.

The Budget, Gideon noted, allocated Sh3.1 trillion for recurrent expenditure, including salaries, consolidated fund services, and lavish government operations, while development expenditure received a meagre Sh693 billion.

He said the country cannot achieve economic stability and create wealth with such a gaping disparity between recurrent and development expenditure.

“It is estimated that the government will borrow Sh635.5B internally from local financial institutions to partially fund the budget... The ripple effect will be capital crowding out by the government, stifling access to credit for businesses,” he stated.

The private sector, he said, will shrink even further, diminishing individual and household incomes, adding that it is economically unsound for the government to compete with the private sector in borrowing locally.

The anticipated total revenue for year 2025/2026, Gideon noted, is Sh3.3 trillion, with tax revenue being Sh2.75 trillion, which is over 83 per cent of the budget revenue being raised from taxes alone.

“It is possible to attain a slim, balanced, and fully funded budget by the taxpayer if only we can ensure fiscal discipline and tame our appetite for loans,” he stated.

Gideon said it is ridiculous to increase allocation to the national security infrastructure to Sh257 billion, with KDF allocated the highest amount in history, yet critical sectors such as healthcare and agriculture lag in budgetary allocations.

“Is the government planning to secure a sickly population? Or rather, a hungry nation?” he questioned.

Gideon said it is unfortunate that the government is preoccupied with infiltrating and tracking social media users by allocating an additional Sh150M to the Directorate of Criminal Investigations to procure media spyware infrastructure. The decision, he said, is part of a wider scheme to invade the privacy of citizens and silence online dissent.

He further criticised the allocation to counties, saying it is too little.

“The county’s equitable share of Sh405.1B from a budget of over Sh4 trillion is too little considering the huge functions and responsibilities that county governments bear. As a country, we must reimagine how devolution works and support it in the realisation of social and economic development at the grassroots,” he stated.

The country, he said, is experiencing a reduced cash flow as the government at both the county and national levels accumulates Sh70 billion in pending bills. He urged the government to expedite the payment of these bills to open up the economy.

“It is our position as a party that to address high unemployment rates, our budget must be tailored to move Kenya from a consumer to a producer economy and create wealth for our people through massive industrialisation. We can only sustain a nation through taxation, but we can never tax ourselves into prosperity,” he stated.

Samuel Nasieku, a Nakuru resident, said he did not have time to sit down and listen to the budget proposals because it would pain him.

Nasieku said that the budget has never been friendly to the common ‘Mwananchi’ and always favours the rich.

“I sat down and listened to budget proposals, but in the end, it was more painful. I'd better survive with the little money I make from my business,” he said.

Political analyst Professor Gitile Naituli said that the Kenyan budget is not usually implemented, as Kenyans always wait for the promises to be fulfilled.

He said that the reading of the budget has become just a ritual but just remains in the books, as the Kenya Kwanza government is known for not fulfilling its promises.

“Kenyans have gotten so used to being lied to that they no longer care about the budget. "It is time to stop what is happening and to do a budget that can be fulfilled,” he said.

He contested the reduction of the emergency budget by Sh400 million, saying the emergency funds are necessary in case of disasters.

Naituli stressed that adding the President’s office Sh30 million was not necessary, especially at the expense of other budgets, including the emergency budget.

He denied claims that no new tax had been introduced and said that the same would be recovered in the VAT tax from previously zero-rated products.