President William Ruto on Wednesday chaired a Cabinet meeting at State House, Nairobi.
In a statement, Ruto said the cabinet deliberated on the government’s economic priorities, focusing on sustaining growth, ensuring fiscal stability, and promoting inclusive green development.
“To maintain economic momentum, we will prioritise lowering the cost of living, eradicating hunger, creating jobs, expanding the tax base, improving foreign exchange balances, and fostering inclusive growth,” he said.
According to President Ruto, these will be achieved through strategic investments in key economic sectors, strengthening production and market access, and attracting local and foreign investments.
This comes barely a day after the Cabinet approved a Sh4.2 trillion budget for the 2025/26 financial year, marking a Sh153 billion reduction from initial projections.
According to the 2025 Budget Policy Statement (BPS), the national expenditure will account for 22.1 per cent of GDP, with Sh3.09 trillion allocated to recurrent spending, Sh725.1 billion for development projects, Sh436.7 billion for county transfers, and Sh5 billion set aside for the Contingency Fund.
“The 2025 Budget Policy Statement (BPS) outlines the government’s priorities, focusing on sustaining economic growth, ensuring fiscal stability, and promoting inclusive green development,” reads the dispatch.
Under the Division of Revenue Bill 2025, county governments are set to receive Sh405.1 billion as their equitable share and Sh10.6 billion through the Equalisation Fund.
The County Allocation Revenue Bill 2025 will distribute these funds based on the Third Basis Formula, while the County Governments Additional Allocation Bill 2025 proposes an extra Sh69.8 billion—Sh12.89 billion from the National Government and Sh56.91 billion from development partners—bringing total county transfers to Sh474.87 billion.
