CS John Mbadi shifts to zero-based budgeting as a bold move for Kenya’s fiscal future

Treasury Cabinet Secretary (CS) John Mbadi has announced a bold shift in Kenya’s budgeting system. Starting in the 2025/26 fiscal year, the country will adopt zero-based budgeting (ZBB) instead of the traditional incremental model.

“Our budgeting process was based on previous allocations,” Mbadi said. “We looked at last year’s budget and added amounts depending on how we viewed that MDA.”

This new approach aims to increase transparency, accountability, and efficiency in public spending. Zero-based budgeting requires all expenses to be justified from scratch each year. Unlike traditional budgeting, which builds on past spending, ZBB forces Ministries, Departments, and Agencies (MDAs) to justify every cost.

Mbadi said the change seeks to eliminate unnecessary spending and streamline public expenditures. He criticized the old system for promoting inefficiencies by relying on outdated priorities.

By using ZBB, the government hopes to control costs across all ministries and improve how it uses public resources.

The Treasury began this transition in October and November 2024. During that period, all MDAs reviewed their budgets through the Integrated Financial Management Information System (IFMIS). This digital tool supports financial operations at both national and county levels.

Each sector submitted detailed data on staff numbers, planned hires, and salary expenses to justify its budget.

The ZBB approach is expected to deliver several benefits:

• Stronger fiscal discipline through required justification for every expense
• Increased transparency in government spending
• Reduced waste and better use of public funds
• Standardized procurement costs across government agencies

Although many view the shift to ZBB as a positive step, some Kenyans remain cautious. They worry about continued tax increases and want to see real improvements in public services.