State House, the Ministry of Defence and the National Treasury were among the biggest drivers of the Sh203 billion recurrent budget burst in the financial year ended June 2026, with Treasury Cabinet Secretary John Mbadi now pushing for a law to better align expenditure with project plans.
Treasury figures show expenditure on day-to-day operations such as salaries, utility bills and routine maintenance reached Sh1.673 trillion in financial year 2025/26 against an original estimate of Sh1.470 trillion.
This marked the widest divergence in at least five years, underlining the growing role of mid-year budget revisions in government spending.
The gap between original budgets and actual recurrent expenditure more than doubled from Sh94.21 billion in fiscal year 2024/25 and was significantly higher than Sh57.26 billion in 2023/24, Sh43.17 billion in 2022/23 and Sh99.35 billion in 2021/22.
The figures compare original budgets with actual cash disbursements from the Treasury and, therefore, do not reflect supplementary budgets approved by Parliament in April and June.
Some of the largest spending revisions in the review year occurred in departments at the heart of government, underscoring the scale of adjustments made after Parliament approved the original budget.
The Ministry of Defence accounted for one of the largest upward revisions, receiving an additional Sh24.43 billion above its original allocation. The National Treasury followed with Sh24.94 billion, while Internal Security received Sh18.01 billion and the National Intelligence Service Sh13.5 billion.
State House’s recurrent allocation was revised upwards by Sh9.57 billion, while the National Police Service received an additional Sh9.11 billion. The Executive Office of the President (Sh2.32 billion), the Office of the Deputy President (Sh2.30 billion) and the Office of the Prime Cabinet Secretary (Sh272.3 million) also received higher allocations during the year.
The scale of the revisions highlights how substantially government spending plans can change after the original budget is approved, a weakness Mr Mbadi says stems from the absence of a legal framework linking national planning with budgeting.
“I have actually been a proponent of proper planning,” the Treasury CS said last month while outlining the planned reforms. “The problem that we have in our budgeting process is that we are not linking plans to budgets.”
The proposed Planning Bill is intended to guide preparation of future budgets by embedding long-term financial planning and priorities into the budget-making process before allocations are presented to lawmakers for public participation, debate and approval.
“You will hear a lot about what we are planning to do and introduce the Planning Bill. Remember in this country, we have laws governing public finance management, we have laws governing procurement, laws guiding asset management, but we don’t have any law on national planning,” Mr Mbadi said.
“If you don’t plan well, then you cannot have a good budget and even a good financial plan.”
The revisions illustrate the planning gaps that the proposed law seeks to address by ensuring government priorities, expenditure estimates and financing plans are better aligned before the Treasury submits the budget estimates to Parliament.
Treasury records show the higher spending was subsequently accommodated through revised budgets approved by lawmakers, bringing final allocations broadly into line with actual issues from the exchequer.
The Constitution allows limited flexibility for such spending adjustments during budget implementation. Article 223, operationalised through Section 36(9) of the Public Finance Management (National Government) Regulations, permits State offices to spend up to 10 percent more than the cash approved by the National Assembly under specified circumstances.
The Constitution requires the National Treasury to table before Parliament a supplementary appropriation Bill within two months after money is withdrawn from the Consolidated Fund without prior approval by lawmakers.
The Public Finance Management regulations also prohibit Parliament from approving supplementary allocations exceeding 10 percent of the approved budget estimates of a programme or sub-vote unless the expenditure is required to address an unforeseen and unavoidable need.
Mr Mbadi said the government had sought to make the 2025/26 budget more realistic by capturing expected expenditure more comprehensively than in previous years.
“I want to point out that last year, if you noticed, we tried as much as possible to capture most of the expenditure and align the budget to realities.”
He maintained that unexpected events nevertheless made supplementary budgets necessary, with the spending eventually expanding 13.81 percent, or a record Sh203 billion.
“Were it not for some disruptions that we have seen, especially the war in the Middle East and a bit of underperformance by KRA, there was going to be no need really for a supplementary budget.”
The renewed focus on planning also comes against President William Ruto’s pledge to end the long-standing practice of financing day-to-day government operations through borrowing.
“The government should never borrow to finance recurrent expenditure. It is not right, it is not prudent, and it is not sustainable. It is simply wrong. We must bring ourselves and our country to sanity,” President Ruto said in his inaugural address to a joint sitting of the National Assembly and Senate in September 2022.
“Over the next three years, we must reverse this and go back to a situation where the government contributes to the national savings effort by keeping recurrent expenditure below revenue levels,” the President added.