Today, Prof. Njuguna Ndung’u, Cabinet Secretary for the National Treasury and Economic Planning delivered the Budget Statement for the FY 2024/25 in Parliament. For the fiscal year 2024/2025 budget, which runs from July 1 this year to June 30 next year, the total allocation is Sh3.92 trillion.
The Kenya Kwanza government intends to raise most of the budget from internal revenue with taxes being the main source. However, there remains a deficit of KES 597B (3.3% of GDP). This deficit is set to be financed via external borrowing that will raise KES 333.8 billion and domestic borrowing which will raise KES 263.2 billion.
ICT Sector Budget Allocation
Treasury has allocated the ICT sector KES 16.3 billion. This is a KES 1.2 billion increase from the allocation made in the FY 2023/24 of KES 15.1 billion. The allocation is set to finance a number of government projects under the Ministry of ICT (MoICT). KES 2.3 billion has been set aside for the construction of the Kenya Advanced Institute of Science and Technology (KAIST). This is further allocation for the Konza City based institution which received KES 5.7 billion in the last financial year. This is second time the institution receives funding from the government of Kenya.
Konza is set to receive more funding in the FY 24/25 budget, KES 5.2 billion has been allocated for the Konza data centre and smart city facilities. For the data centre, this year’s allocation is a significant increase from last year’s allocation of KES 1.2 billion. In contrast, the allocation for horizontal infrastructure Phase I has dropped from KES 4.8 billion last year to the proposed KES 1.5 billion.
Finance Bill 2024: Key Proposals Touching the ICT Sector
For government shared services, the National Treasury has allocated KES 1.1 billion. The Kenya Kwanza government has championed the digital superhighway since taking office. This year it gets an allocation of KES 704 million. On the other hand, the development and acceleration of Kenya’s digital economy gets KES 2.8 billion.
The last mile county connectivity network has been allocated KES 2.8 billion for maintenance and rehabilitation, a huge increase from the allocated KES 583 million in the FY 2023/24 budget.
Not under the MoICT, but the digital loans initiative Hustler Fund, gets KES 5 billion allocation. This is despite the loan kitty racking up KES 10 billion in defaults since initial disbursement began in 2022. The Nonperforming Loans (NPL) represent 29% of the total amount borrowed.
