FY 25/26 Budget Process Launched

Treasury CS launches the FY 25/26 and Medium-Term Budget Preparation process

👋 Welcome to The Mwango Weekly by Mwango Capital, a newsletter that brings you a summary of key capital markets and business news items from East Africa.

This week, we cover the launch of Kenya’s FY 2025/26 budget process by the National Treasury, the SACCO Supervision Annual Report for 2023, and the IMF’s current fact-finding mission in Kenya.

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Treasury Sets Stage for FY 2025/26 Budget

Process Initiated: The Cabinet Secretary for the National Treasury and Planning John Mbadi gave a keynote address last week at the KICC during the launch of the FY 2025/26 and Medium Term Budget Preparation process. He updated the country on the state of the budget-making process for the coming fiscal year and outlined new measures that have been proposed concerning executing the FY 25/26 budget and the medium-term budget.

Zero-Based Budgeting: Mr Mbadi further reiterated that the government is set to switch to zero-based budgeting (ZBB) for FY 2025/2026 and beyond. Under this approach, Ministries, Departments, and Agencies (MDAs) will create budgets from scratch instead of using previous trends as they have traditionally been prepared.

IFMIS Upgrades: In a bid to implement the changes proposed for FY 2025/2026 and beyond (such as the ZBB), the National Treasury has made adjustments to the Integrated Financial Management Information System (IFMIS), including the introduction of Assets and Inventory Management Modules which is set to give the government full visibility into all public assets for efficient planning. Additionally, the Budget Costing Tool module has been introduced to ease the calculation of budget baselines.

Pending Bills Update: The Pending Bills Verification Committee set up to audit the stock of pending bills from 1st July 2005 to 30th June 2022 is set to submit its report by October 2024. The report is set to aid the planning process of their resolution. Last month, Bloomberg indicated that the Kenyan pension industry was in talks to set up a Special Purpose Acquisition Company (SPAC) that would acquire part of the pending bills for onward settlement.

Find the entire speech here.

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2023 SACCO Report Highlights Industry Expansion