Broad-based government begins to look like Roman 'bread and circuses'

This week began with President William Ruto’s 1,000th day in office, with 792 days to the next General Election.  Monday was also 349 days since the June 15, 2024 Finance Bill Gen Z-led protest. For the record, it was also 446 days since the fourth Medium-Term Plan (MTP IV) 2023-2027 under Vision 2030 and Bottom-Up Economic Transformation Agenda (BETA), was published.  

Economic empowerment is this government’s latest brainwave.  Reminiscent of any regime’s final life-phase known as “bread and circuses”, this is when leaders occupy the people with goods (like bread) and entertainment (activities or events) as diversions from daily issues.  Ancient Rome is a great case study.  This “broad-based government” increasingly looks like “bread and circuses”. 

Consider this as context for this 2025/26 National Budget Week.  Naturally, we eagerly await Thursday’s Budget Statement by the Treasury Cabinet Secretary as an event, forgetting that it is the closing end of a process.  Strictly, we should pay equal attention to Budget Statements being delivered by County Executive Committee Members for Finance and Planning at county level. 

Let’s add further context to the budget.  Our medium-term plan should be the budget’s driver. 

As said before, MTP IV/BETA envisaged 2023 to 2027 public investment in five clusters — excluding recurrent costs — of roughly Sh23.4 trillion.  In our devolved system of government, that is, two levels of government, this was split as Sh16.1 trillion at national level, Sh5.3 trillion at county level (for the 47 counties) and up to Sh2 trillion in joint national and county projects.  We simply lack a consolidated medium-term resourcing (not revenue) strategy for this Sh23.4 trillion. 

Indeed, if we focus only on the national level, we should already have invested Sh6.4 trillion in the past two financial years, Sh5.3 trillion in taxes, Sh771 billion in Public-Private Partnerships, (PPPs) and the rest from development partners.  Data tells us only Sh561 billion was allocated through the budget, and remains unclear where we are on PPPs.  For 2025/26, the MTP IV/BETA investment requirement is Sh3.3 trillion, but the budget allocation (excluding PPPs) is Sh338 billion.  If we are only investing 10 per cent of requirement, how should we expect 100 per cent results?  Food for thought! 

Here is more dated context.  Lest we forget, Kenya Vision 2030 is still the official long-term development blueprint that was expected to attain double digit economic growth from 2013 and sustain it to 2030. Through a path from 2008 that would have averaged annual Gross Domestic Product (GDP) growth at 9.5 per cent by 2024.  

In reality, growth has averaged 4.5 per cent since 2008, now viewed as our long-term growth rate.  Successive MTPs have been more modest than the original vision; average growth under the 2008-2012 MTP I targeted 8.7 per cent (actual 4.3 per cent), 2013-2017 MTP II targeted 8.2 per cent (actual 4.4 per cent) and 2018-2022 MTP III targeted 6.4 per cent (actual 4.6). 

Current MTP IV targets 6.6 per cent average; after two years we are at 5.2 per cent.  Across all MTPs so far, the average annual growth target is 7.5 per cent against the vision’s 9.6 per cent. 

Indeed, Vision 2030 envisaged sustained levels of private sector-led savings at 29 per cent of GDP, private sector-led investment at 32 per cent and revenue at 22 per cent in a low-inflation and stable exchange rate environment.  MTP IV aims for savings growth from 14 per cent to 21 per cent, investment from 19 per cent to 27 per cent and revenue from 17 per cent to 20 per cent, that probably needs a resourcing view of private investment crowded in by public investment. 

Hence the disconnect. Highly ambitious long-term visions and slightly less ambitious medium-term plans which fail to translate not just into annual budgets, but a broader annual resourcing frame.  Does prioritisation and sequencing matter?  Yes, but it is difficult to find evidence of this in a coherent medium-term, and not simply emergency annual, basis. 

In our rickety policy-planning-budgeting framework, it is easy to see why leaders quickly turn to “bread and circuses” from roadside announcements on “development tours” to current “economic empowerment”.  As some have noted on social media, if we had working systems, we wouldn’t need gimmicks! 

I am reading the 2025/26 National Budget in this harsh and pessimistic light.  It is striking that revenue plans are based on government’s 5.3 per cent GDP growth projection for 2025 when the World Bank’s latest Kenya Economic Update thinks 4.5 per cent, while the IMF’s says 4.6 per cent in the same 2025 economic forecast that places Kenya as the sixth largest economy in Africa. 

The National Assembly’s Budget and Appropriations Committee tabled its report on the 2025/26 budget last week.  It continues our penchant for unrealistic forecasting.  The fact that we are likely to get a third supplementary budget for 2024/25 on account of revenue shortfalls suggests that we will not even hit the target of Sh3.087 trillion; Sh2.85 trillion seems more likely. For the record, 2024/25 recurrent expenditure sits at Sh2.973 trillion before Supplementary III. 

Yet BAC raised to Sh3.328 trillion the 2025/26 revenue target which Treasury had dropped down from Sh3.383 trillion in the Budget Policy Statement (BPS) to Sh3.316 trillion.  Remember, we are told that Finance Bill 2025 modestly hopes to raise Sh2 to 35 billion, so at 10 per cent growth on expected 2024/25 outturn, we have an overcooked forecast by at least Sh200 billion. 

The less said about our expenditure framework,  the better.  In 2024/25 national government spending of Sh2.232 trillion was approved assuming passage of the 2024 Finance Bill.  Without this Bill, the latest 2024/25 Supplementary II estimates outline a higher outlay of Sh2.347 trillion!  

For 2025/26, the Budget Review and Outlook Paper set a Sh2.619 trillion ceiling which was ignored in sector bids totalling Sh4.537 trillion across MDAs (Sh1.918 trillion; 73 per cent higher).

Treasury then rationalised these bids back to Sh2.562 trillion in the BPS, which BAC cut to Sh2.523 trillion.  In doing this, BAC had to turn down additional funding requests of Sh414 billion. 

By the time we got to the current programme-based budget, Treasury had further cut this ceiling to Sh2.506 trillion only for BAC to go the other way and raise it back up to Sh2.538 trillion. By this time, BAC tells us that the total value of unfunded requests is now Sh235 billion.  A sense emerges that all of this work between MDAs, Treasury and BAC amounts to tinkering at the margin, and is nowhere close to zero-based budgeting, or more modern programme-performance budgeting. 

Here’s a closing thought for today.  The truth of the matter is we are going into 2025/26 financial year with a highly unrealistic Sh3.328 trillion revenue forecast and a real Sh5.083 trillion budget if we properly added Sh803 billion in debt redemptions to the “official” Sh4.280 trillion number.   But here’s the thing.  Only Sh750 billion of this is development.  Only Sh338 billion of this is for strategic investments and interventions in the five BETA clusters that need ten times as much.

It would be a shame if this administration’s “bread and circuses” tokenism crowded out the transformative investment discourse needed to drive this mid-term budget as its signature one.