The government proposes to increase the budget by Sh68 billion, a move that will push up total expenditure to Sh4.3 trillion.
The Draft 2025 Budget Policy Statement released Wednesday shows an additional Sh67.769 billion with major wins for the education sector, which is expected to receive close to 90 per cent of the extra amount.
President William Ruto’s administration is keen to address the current challenges bedeviling the education system, with primary focus on the new university education funding model which has since been declared unconstitutional by the court.
In December, Justice Chacha Mwita of the High Court ruled that the model also known as Variable Scholarship and Loan Funding (VSLF) is biased as it introduces clusters based on perceived financial ability.
Even so, the government has vowed to appeal the ruling, saying it’s not discriminatory and allows all students to apply for scholarships and loans.
Under the new model introduced in May 2023, funding for students in public universities constitutes a blend of government scholarships, loans, and household contributions.
The proportion of each component varies with students’ bands. Band 1 has students whose monthly income does not exceed Sh5, 995 while band 2 ranges from Sh5, 995 to Sh23, 670.
Students from families with a monthly income of between Sh23, 671 and Sh70, 000 are placed in band 3 while those between Sh70,000 and Sh119, 999 are in bands 4 and 5 which receive the least funding in terms of scholarships but are high on loans for students whose families earn above Sh120, 000.
In order to smoothen the finding, the National Treasury has proposed to allocate the State Department for Higher Education and Research Sh26.3 billion more with Sh22 billion earmarked for the new funding model.
The second biggest beneficiary in Supplementary Budget II 2024/25 is the State Department for Technical and Vocational Training, which is expected to receive a Sh14.63 billion bump up in allocation.
The exchequer has also proposed Sh10 billion more for the Teachers’ Service Commission for the implementation of the second phase of salary adjustment for teachers.
The State Department for Basic Education will receive Sh3.02 billion more in allocation to support the planned recruitment of ECD teachers.
The report shows that the sector will also continue to undertake major reforms in line with the Presidential Working Party on Education Reform Report.
“These reforms aim to promote quality and inclusive education, training and research for sustainable development and ensure socio-economic development.”
To implement these programmes, the government plans to allocate the sector Sh718.8 billion, Sh759.6 billion, and Sh847.1 billion in FY 2025/26, FY 2026/27 and FY 2027/28 respectively.
According to the BOP, the government has proposed the overall expenditure and net lending for the upcoming financial year at Sh4.3 trillion from the projection of Sh3.88 trillion in 2024/25.
The FY 2025/26 comprise: recurrent expenditure of Sh3.07 trillion ( 16.0 per cent of GDP); development expenditure of Sh804.7 billion ( 4.2 percent of GDP); transfer to counties of Sh442.7 billion and Contingency Fund of Sh5 billion, respectively.
Reflecting the projected expenditures and revenues, the fiscal deficit including grants is projected at Sh759.4 billion ( 3.9 per cent of GDP) in FY 2025/26 compared to the projected fiscal deficit of Sh768.6 billion ( 4.3 per cent of GDP) in FY 2024/25.
Reflecting the projected expenditures and revenues, the fiscal deficit including grants is projected at Sh759.4 billion ( 3.9 per cent of GDP) in FY 2025/26 compared to the projected fiscal deficit of Sh768.6 billion ( 4.3 percent of GDP) in the current financial year.
A net external financing of Sh213.7
billion and a net domestic financing
of Sh545.8 billion will finance the
fiscal deficit in FY 2025/26.
