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The result is that the economy is now projected to grow by 4.9% this year, up from the World Bank's May forecast of 4.5%, and maintain that rate of growth over the next two years.
The Auditor General attributed the low absorption of 56.5% of the development budget by County Governments to unrealistic budget projections and delays in procurement processes. She said several other factors also disrupted implementation, including delays in exchequer releases, poor alignment between budget plans and cash flow, cuts introduced in Supplementary 1 Estimates, and instances of IFMIS downtime that affected operations.
According to the latest data from the National Treasury, net borrowing from domestic sources reached Sh339.7 billion, while external lenders contributed Sh98.1 billion. This represents nearly half (48.6%) of the annual borrowing target of Sh901 billion, which is set at Sh613.5 billion for local markets and Sh287.4 billion from external sources.
The Treasury had sought to suspend the High Court judgment issued on April 1, 2025, in Constitutional Petition No. E059 of 2024, arguing that it raised significant legal issues while the government prepared to appeal. The application relied on rule 5(2)(b) of the Court of Appeal Rules, which allows a temporary pause if certain conditions are met.
The National Assembly’s Special Funds Accounts Committee expressed frustration with CEO Henry Tanui, who could not provide the full records of borrowers, repayments, and fund disbursement, one year after queries were first raised.
Currently, failing to remit deducted contributions is not a criminal offence, and many pension schemes are underfunded as a result. Mbadi highlighted that numerous institutions owe retirees billions of shillings, creating a serious threat to the security of workers’ benefits.
The Public Accounts Committee (PAC), chaired by Vice Chairperson and Garissa County Woman Representative Amina Udgoon Siyad, scrutinized the Auditor General’s report, which highlighted irregular spending, unapproved transactions, and potential losses of taxpayer money. The audit revealed that the airline received Sh10 billion in 2022/2023 as an on-lent loan, taking the total funding between 2019 and 2023 to Sh41.27 billion.
The Banking (Penalties) Regulations, 2025, are now under review by the Parliamentary Committee on Delegated Legislation, as lawmakers prepare to scrutinise their potential impact on the financial sector.
The AfDB, in its report titled Unpacking the Drivers of Public Debt Dynamics in Kenya, notes that the National Assembly struggles to carry out proper oversight of public borrowing.
Treasury officials note that pennies, which honor President Abraham Lincoln and are composed of copper-plated zinc, now cost nearly four cents to produce—more than double their cost ten years ago. Eliminating production is expected to save approximately $56 million per year.
The Treasury’s latest annual monetary report shows that the value of on-lent loans now stands at more than Sh1 trillion, made up of Sh874.91 billion in donor-funded financing and Sh322 billion from the national government. Many of these loans, the report notes, have been poorly utilised, with some projects stalling or failing to start.
Treasury data shows that Kenya’s debt to the US dropped sharply to $185.47 million (Sh23.9 billion) by June, from $310.13 million (Sh40 billion) a year earlier. This reduction now places the US behind Belgium and Italy among Kenya’s bilateral lenders, marking a significant shift in debt structure.