Cumulative Tax Revenues Post First Monthly Drop In Recent Memory

The National Treasury published the actual receipts and releases for the first two months of FY 24/25.

Total expenditure came in at KES 439.95bn, a 12.5% decline from the amount spend over the same period in FY23/24.

The government collected KES 330.46bn in ordinary revenues which is equivalent to a paltry 3.1% increase from the KES 320.81bn collected over the same period in FY23/24. However, tax revenues dropped by 1.5% to KES 312.84bn, from KES 317.58bn for the first two months of FY23/24.

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Over the same period, non-tax revenues surged 28.6%m/m and 445.4%y/y to KES 17.63bn, from KES 13.71bn and KES 3.23bn in July 2024 and August 2023, respectively.

The budget deficit came in at KES 109.48bn which was financed by both external and domestic borrowing. The figure is a 39.8% decline from the actual borrowing over the same period in FY23/24.

Of the total expenditure, 50.4% was allocated to debt repayments, 36.9% to recurrent expenses, 7.0% to the county equitable share, and a mere 4.1% to development projects. Notably, 67.1% of the revenue was used for debt servicing, compelling the government to rely on further borrowing to meet other expenditure needs. This highlights the fiscal pressure from debt obligations, leaving minimal room for development spending.

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