The government reduced development budgets for several key economic sectors during the 2025/26 financial year and ultimately released less funding than the revised allocations, highlighting shifting spending priorities, according to the Treasury’s latest disbursement report.
Among the hardest-hit sectors were mining, petroleum, housing and parts of the government’s enterprise development agenda, which experienced both budget cuts and lower-than-expected cash releases.
The State Department for Mining saw its development budget reduced by 34.6 per cent to KSh174.87 million from KSh267.17 million in the supplementary budget. However, it received just KSh17.38 million, representing only 9.94 per cent of the revised allocation and 6.5 per cent of the original budget.
Similarly, the State Department for Petroleum had its development allocation cut to KSh100 million from KSh150 million, before receiving KSh46.1 million, equivalent to 46.1 per cent of the revised budget.
The State Department for Housing and Urban Development also faced reductions, with its development budget revised down to KSh18.15 billion from KSh20.89 billion. Treasury disbursed KSh11.94 billion, amounting to 65.77 per cent of the revised allocation.
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The funding shortfalls come despite ongoing government efforts to attract investment into the mining and petroleum sectors, leaving agencies tasked with driving growth operating with only a fraction of their planned development resources.
Other departments recorded a similar pattern. The State Department for Devolution had its development budget reduced to KSh14.18 billion from KSh15.92 billion and received KSh9.76 billion. Although the Ethics and Anti-Corruption Commission (EACC) retained its original development allocation, it received only 68.3 per cent of the approved amount.
The State Department for Public Health had its development budget cut by nearly 20 per cent to KSh4.15 billion, with Treasury releasing KSh3.64 billion, or 87.79 per cent of the revised allocation. Meanwhile, Environment and Climate Change received KSh1.27 billion after its budget was reduced to KSh1.68 billion from KSh1.86 billion, translating to 75.35 per cent absorption.
In some instances, larger allocations did not result in full funding. The State Department for Labour and Skills Development secured an increase in its development budget to KSh852.6 million from KSh768.6 million, but received only KSh505.9 million, equivalent to 59.34 per cent of the revised allocation.
Overall, several ministries experienced a double setback, first through reduced budgets during the supplementary estimates and then through cash disbursements that failed to meet even the lowered targets.
By contrast, infrastructure and agriculture were among the biggest beneficiaries. The State Department for Roads saw its development allocation rise by 21.8 per cent to KSh92.84 billion from KSh76.24 billion, while Crop Development received a 57.7 per cent increase to KSh45.9 billion, with Treasury releasing KSh45.65 billion.
The report also shows that recurrent expenditure continued to receive stronger support than development spending. State House more than doubled its recurrent budget to KSh17.25 billion from KSh7.68 billion, with Treasury releasing nearly the full amount. Revised recurrent allocations for the National Police Service, Ministry of Defence and the National Intelligence Service (NIS) were also fully funded.
Public debt servicing remained the largest single expenditure item. Although the allocation was increased from KSh1.9 trillion to KSh2.1 trillion during the year, Treasury released KSh1.83 trillion, representing 87.16 per cent of the revised budget and 3.94 per cent below the original allocation.
The disbursement data suggests Treasury prioritised funding core government operations and security agencies, while several development programmes aimed at driving economic growth received significantly less funding than initially planned.
