THE NATIONAL TREASURY AND ECONOMIC PLANNING ACHIEVEMENT REPORT

Fiscal Resilience. Inclusive Growth. Shared Prosperity.

The financial year 2024/25 marked a pivotal period in Kenya’s fiscal and economic history— a year in which the country successfully navigated a complex constellation of global and domestic challenges while delivering measurable progress across all five pillars of the Bottom-Up Economic Transformation Agenda. The National Treasury and Economic Planning’s central contribution was to provide a stable macroeconomic and fiscal anchor
that enabled the Government’s ambitious development program to proceed with confidence and credibility. This required simultaneous management of competing imperatives: mobilizing sufficient revenue to fund the development agenda without overburdening taxpayers; maintaining fiscal discipline without undercutting essential public services; managing a substantial public debt portfolio without crowding out private investment; and supporting the Central Bank’s monetary policy objectives while sustaining the growth momentum necessary for job creation and poverty reduction. Kenya’s GDP growth of 5.4 percent in 2024/25, achieved against a global backdrop of elevated interest rates, persistent inflation in advanced economies and geopolitical instability, stands as a testimony to the soundness of the macroeconomic policy framework. The performance was broad-based, spanning agriculture (4.8%), manufacturing (3.6%), construction and real estate (5.9%), financial services (6.3%), tourism and hospitality (9.5%) and the ICT sector (8.2%). The moderation from the 5.6 percent growth recorded in 2023/24 reflected the dampening effect of tight global financial conditions on private investment and the lingering impact of the 2023/24 floods on agricultural production and infrastructure. Nevertheless, the economy’s fundamentals remained robust, with foreign exchange reserves at USD 8.2 billion — equivalent to 4.5
months of import cover, above the statutory minimum of 4.0 months — and diaspora remittances reaching a record USD 4.5 billion. Fiscal consolidation — the disciplined reduction of the fiscal deficit as a share of GDP while protecting development spending — was the centerpiece of the National Treasury’s policy program during the year. The fiscal deficit declined to 4.6 percent of GDP from 5.2 percent in 2023/24, representing the most significant single-year improvement since the onset of the COVID-19 pandemic and a clear signal to international investors and rating agencies of Kenya’s commitment to fiscal responsibility. This improvement was achieved through a combination of robust revenue mobilization, disciplined recurrent expenditure management and strategic capital expenditure prioritization. Total revenue collection reached KES 2,404.1 billion, with tax revenue of KES 2,008.2 billion representing 97.7 percent of target. The Electronic Tax Invoice Management System, deployed to 450,000 VAT-registered taxpayers, contributed an estimated KES 24.5 billion in additional VAT compliance revenue. The Kenya TradeNet System reduced average cargo clearance times from seven days to 3.5 days, enhancing both trade facilitation and customs revenue security. Public debt management remained a priority area of the National Treasury’s work during the year. The total public debt stock stood at KES 11,182.9 billion as at 30 June 2025, with the debt-to-GDP ratio declining to 67.8 percent — a 2.4 percentage point improvement from the prior year. This decline was achieved through a combination of primary balance improvement, disciplined new borrowing and proactive liability management. The Ministry successfully issued a USD 1.5 billion, 10-year Eurobond at 7.85 percent in January 2025, demonstrating sustained investor confidence in Kenya’s economic fundamentals. Simultaneously, a USD 500 million buyback of the 2024 Eurobond at favourable terms reduced near-term refinancing risk, while the restructuring of expensive commercial loans generated KES 12.4 billion in interest cost savings. The average maturity of the domestic debt portfolio was extended from 6.2 years to 7.8 years, reducing rollover risk and improving debt sustainability.
The strengthening of Public Financial Management systems was a defining achievement of the year. The IFMIS platform was enhanced with artificial intelligence and data analytics capabilities, reducing payment processing times from 21 days to 3 days and enabling 98.5 percent of government payments to be processed electronically. The Government Financial Management Information System was rolled out to all 47 county governments, standardizing the chart of accounts and enabling real-time monitoring of county expenditure. The e-Procurement platform onboarded 2,450 procuring entities and 78,000 registered suppliers, reducing the average procurement cycle from 84 days to 45 days and generating estimated savings of 12 percent. The implementation of the Public Finance Management (National Government) Regulations 2024 established updated standards for budget preparation, execution, reporting and accountability across all MDAs. Financial sector development continued to reinforce Kenya’s position as Sub-Saharan Africa’s leading financial hub. Financial inclusion reached 84.2 percent of adults, with mobile money accounts totalling 72.5 million and transaction values of KES 42.8 trillion. The Nairobi Securities Exchange recorded 12.8 percent growth in market capitalization to KES 2.85 trillion. Insurance sector assets reached KES 1.48 trillion with 12.4 million lives covered by medical insurance. Total pension assets grew to KES 1.78 trillion, representing 10.8 percent of GDP. The banking sector remained stable with a capital adequacy ratio of 16.8 percent, above the minimum 14.5 percent threshold, and non- performing loans declining to 13.2 percent from 14.7 percent. International economic engagement during the year yielded significant financing for Kenya’s development agenda. The successful completion of the IMF Extended Credit Facility/Extended Fund Facility program unlocked access to the Resilience and Sustainability Facility (USD 750 million). The World Bank’s active portfolio of 24 projects worth USD 5.8 billion was expanded with new financing for agriculture, digital economy and climate adaptation. The African Development Bank committed USD 650 million for green energy projects, reinforcing Kenya’s leadership in renewable energy on the continent. This report documents these and many other achievements in full detail. Part I describes the Treasury’s institutional architecture; Part II presents achievements across 14 program areas; Part III provides a comprehensive account of financial performance; and Part IV sets out the strategic priorities for 2025/26 and beyond.

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