The National Treasury has reported a record-breaking tax collection of Ksh221.39 billion in April 2025, marking a 5.08% increase from the same month last year.
The figure also surpasses December 2024’s high of Ksh217.06 billion, according to figures in the Kenyan Gazette released on March 24, 2025.
Despite this remarkable revenue achievement, the country’s fiscal deficit soared to Ksh 147.293 billion in April. The deficit exposes the deep-rooted challenges in managing public finances and raises alarms about long-term economic sustainability.
The April figures, which are the highest monthly tax haul in the 2024/25 fiscal year, reflect a robust performance by the Kenya Revenue Authority amid efforts to broaden the tax base.
However, the figures also reveal how the heavy reliance on borrowing and lavish spending is heavily focused on recurring expenses.
Domestic borrowing reached Ksh107.29 billion while external loans and grants contributed a moderate Ksh8.85 billion.
Non-tax revenue added Ksh16.14 billion to the funds, but these inflows were cut short by expenditure demands.
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On the spending side, recurrent expenditure consumed Ksh130.75 billion, over half of the total revenue. The expenditure covered salaries, operational costs, and other non-developmental expenses.
Public debt servicing alone accounted for a staggering Ksh168.19 billion, clearly showing the burden of Kenya’s growing debt stock.
In contrast, development spending, which fuels infrastructure and long-term growth, was a mere Ksh19.58 billion, far below the 30% threshold recommended by the Public Finance Management Act of 2015.
Counties received Ksh43.84 billion as their equitable share, while total Consolidated Fund Services spending hit Ksh190.67 billion.
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Fiscal strains are not a new phenomenon to Kenya. A 2023 Cytonn report pegged Kenya’s public debt at Ksh 10.2 trillion, or 70.2% of GDP, as of June 2023—well above the recommended 50% threshold for developing economies.
In the same year, the Kenyan government projected the public debt to decline to 60%, a target the April 2025 deficit indicates may be out of reach.
A Reuters report from November 20, 2024, outlined Kenya’s ambition to reduce its budget deficit to 3.8% of GDP in the 2025/26 fiscal year, down from 4.3% in 2024/25.
However, the latest April 2025 figures suggest that achieving this goal will require significant spending cuts or revenue boosts.
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