Kenya’s healthcare and education sectors are staring at significant fiscal challenges under the 2025/26 budget estimates, experts warn. With a projected budget of Ksh.4.2 trillion, the National Treasury faces a daunting gap of Ksh.900 billion, highlighting the fragile financial state of the country’s critical sectors.
Experts in finance, health, and education have voiced their concerns over the limited allocation of funds to devolved sectors. Abraham Ochieng’, Senior Program Officer at Bajeti Hub, has emphasized the insufficiency of the Ksh.138 billion allocated to healthcare and Ksh.702 billion set aside for education.
“These allocations cannot adequately sustain the essential services these sectors require. The result will be subpar administration of critical programs, which will ultimately harm the public,” Ochieng’ warned during an interview with Citizen TV.
Adding to the fiscal woes is the anticipated rise in borrowing, further straining an economy already grappling with debt repayment. According to Ochieng’, “Increasing the budget deficit will lead to more borrowing, leaving the government with fewer funds for essential services.”
Healthcare Sector Feels the Pinch
The Kenyan healthcare system, already burdened by reduced financial aid from international partners, notably the USA, faces severe resource constraints. Gynaecologist Dr. Nelly Bosire criticized the reduced funding, highlighting its impact on programs such as HIV, TB, and malaria treatments, as well as vaccine rollouts.
“We are coming from a challenging period where our health sector has faced financial clawbacks. This budget, however, delivers the hardest blow yet,” Dr. Bosire lamented. She stressed the urgent need for increased funding to sustain life-saving programs and ensure equitable healthcare access.
Education Sector Struggles to Stay Afloat
The education sector, with its Ksh.702 billion allocation, has been similarly underfunded. Experts argue that this will affect learning outcomes, especially in public schools, which rely heavily on government support. Limited resources could hinder teacher recruitment, school infrastructure development, and the implementation of key curriculum reforms.
Read: How Kenya’s 2025/26 Budget Compares with Tanzania & Uganda
Economic Implications of the Budget Deficit
Kenya’s economy faces broader repercussions from the projected budget deficit. Chief Economist Ken Gichinga pointed out that the government’s reliance on borrowing will crowd out private sector investments. “When the government borrows heavily, less money is available in the private sector, stifling job creation,” he explained.
He further emphasized that human capital is Kenya’s competitive advantage. “Unlike other African countries with abundant natural resources, our strength lies in our people. To compete globally, we must invest in their health and education,” Gichinga noted.
Funding Sources and Revenue Projections
The National Treasury plans to raise Ksh.2.7 trillion through revenue collection, accounting for 64% of the budget. An additional Ksh.560 billion is expected from government levies and fees, pushing the total revenue to Ksh.3.3 trillion. Despite these efforts, the gap of Ksh.900 billion will have to be addressed through borrowing, which experts fear could further weaken the economy.
Kenya is also counting on grants worth Ksh.46.9 billion, which will reduce the budget deficit marginally to Ksh.876 billion. However, the reliance on external borrowing remains a critical challenge.
Calls for Budget Review
Experts are urging the government to revise the budget to ensure that critical sectors receive adequate funding. This revision is essential to safeguard human capital, sustain essential services, and ensure long-term economic growth.
“The government must prioritize healthcare and education in its spending plans. These are the foundations of a prosperous economy,” Dr. Bosire concluded.
As Kenya navigates these fiscal challenges, the pressure mounts on the government to adopt sustainable solutions that will address the needs of its citizens while maintaining fiscal discipline.
