The government has requested an additional Sh18.9 billion through supplementary estimates to fund critical areas left unfunded due to revenue shortfalls. This will force the National Treasury to increase borrowing locally or internationally for the 2024/2025 budget.

Revenue collection fell significantly short of targets, with only Sh2.2 trillion collected against a budgeted Sh2.5 trillion by April, creating a Sh253 billion shortfall. The supplementary estimates increase the original Sh3.5 trillion budget by Sh22.4 billion to Sh3.6 trillion, representing a 0.6 percent increase.

This development comes just one week after Parliament approved the Sh4.2 trillion budget for 2025/26.

A Treasury report says: “The below target performance in the total revenue was on account of a shortfall registered in the collections of ordinary revenue by Sh195.3 billion and a shortfall in ministerial AIA of Sh57.7 billion.”

Treasury Cabinet Secretary John Mbadi (pictured) explained the estimates would “allow additional expenditure for both government and development partners, allow reallocations, provide for compensation to employees and gratuity”.

He acknowledged that budget execution has faced “challenges regarding resources-raising and emerging expenditure pressures”.

Mbadi said: “Since the approval of the Financial year 2024/2025 supplementary estimates two, the National Treasury has received additional requests for funding to cater for emerging priorities and shortfalls under critical expenditures.”

This request follows the recent approval of Sh34 billion in additional expenditure under Article 223 of the Constitution, comprising Sh28.5 billion for recurrent expenses and Sh5.5 billion for development, with Sh23.2 billion already disbursed.

Major beneficiaries of the additional funding include the State Department for Social Protection (Sh12.5 billion increase), State Department for Housing (Sh7.787 billion), National Treasury (Sh5.85 billion), and National Intelligence Services (Sh3 billion).