The just-read budget lacks clear foresight

During the Great Depression, US President Franklin D. Roosevelt launched the New Deal: a series of bold programmes based on the '3 Rs': Relief, Recovery and Reform. These programmes aimed to address urgent human suffering, revive a collapsed economy and rebuild institutions to prevent future crises.

This spirit is sadly lacking in the recently unveiled Kenyan Budget Policy Statement for 2025/26.

While there are modest gains in sectoral allocations, the broader approach is fundamentally short-sighted. Over Sh1 trillion has been earmarked for interest payments on debt, yet debt redemption, the actual repayment of the principal, has been cut to Sh803 billion.

Rather than merely servicing debt, we should be amortising it. This involves increasing principal repayments, renegotiating longer loan terms to reducing annual interest and significantly increasing development expenditure.

However, development spending is only projected to increase by Sh50 billion, rising from Sh593.8 billion in 2024/25 to Sh643.9 billion in 2025/26. For a budget of Sh4.2 trillion, this increase is grossly inadequate if our goal is to stimulate growth, generate jobs and improve public services.

We should be investing more in the domestic economy, rather than draining it through Eurobond interest payments. While the continued focus on macroeconomic stability is important, it is insufficient if poverty remains widespread and the cost of living is unbearable.

The real enemy is not inflation or debt per se; it's the economic exclusion that keeps millions trapped in hardship.

Like FDR's relief programme, Kenya must expand cash transfers, food programmes and other safety nets for vulnerable people. While his recovery plan focused on infrastructure and public jobs, our development budget must do the same in a meaningful way. And, as with his push for reform, including banking regulations and social security, we need structural fiscal changes that curb reckless borrowing and waste.

If we restructured our debt obligations to reduce interest payments, we would have more funds available for investment in real growth. This would involve building roads, water systems, schools and health centres, not just for appearances' sake, but to create livelihoods. It also means nurturing local enterprises and agriculture to expand the tax base from the bottom up.

Budgets are not just spreadsheets. They are moral documents and statements of priority. They reveal whether a government is committed to the comfort of creditors or the dignity of citizens. Right now, we’re prioritising credit ratings over classrooms, bondholders over boda boda riders, and spreadsheets over stomachs.

Kenya needs its own New Deal, anchored in relief, recovery, and reform. This isn’t nostalgia. It’s economic common sense.

Anything less would be short-sighted.

Joan Akinyi Opon, Nairobi