The Kenyan government has again fallen short of its development spending goals, raising concerns about Kenya’s economic progress. According to the 2025 Budget Policy Statement, the actual development expenditure for the National Government in FY 2023/24 was 25.1 percent, below the required 30 percent threshold. The gap highlights the ongoing struggle to meet fiscal targets and effectively implement planned projects.

Development Expenditure Falls Short

The Public Finance Management (PFM) Act requires national and county governments to allocate at least 30 percent of their budgets to development. However, the government allocated only 25.1 percent of its budget to development in the last fiscal year. The government’s reduced spending, which caused delays or cuts to some projects, explains the shortfall.

At the county level, development spending also faced similar challenges. While counties initially allocated the required 30 percent on paper, actual execution fell short, with significant fluctuations in meeting the minimum requirement. Some counties spent as little as 10.3 percent of their budgets on development, further exacerbating the gap between planning and execution.

Development Projections for the Future

Despite the underperformance, the fiscal framework for the 2025 Budget Policy Statement projects an increase in development expenditure to 32.6 percent for FY 2025/26. Given its past struggles, the projection raises questions about whether the government can achieve the target. To meet the goal, the government must enforce stricter compliance measures and improve budget execution strategies.

Challenges in Meeting Goals

Budget constraints are one of the main reasons for the failure to meet development targets. The government has prioritized recurrent expenditure, including salaries and administrative costs, over development projects. Additionally, delays in fund disbursement and mismanagement at national and county levels have further hindered progress.

Another issue is the reliance on borrowing to finance development projects. The government has attempted to bridge funding gaps through domestic and external loans. Still, debt constraints have limited the ability to allocate sufficient funds to infrastructure and public service projects.

A Call for Accountability

Stricter policy enforcement is needed to meet development targets. The government must prioritize effective budget execution, reduce wastage, and increase transparency in public spending. Without these measures, Kenya risks stagnation in critical infrastructure and economic growth.

The shortfall in development expenditure highlights the need for a more disciplined approach to public spending. To reach its planned 32.6 percent budget allocation for development in the future, the government must eliminate inefficiencies and enforce more robust fiscal policies. Kenya’s economic growth hinges on achieving these development goals.