CS Mbadi's budget to hurt farmers, school children and varsity students

President William Ruto’s government has cut critical programmes, including the school feeding programme, fertiliser and seeds subsidy, and university students plan, in a tight Sh4.23 trillion budget to be read on Thursday.

The slashing of those initiatives that directly benefit millions of Kenyans, largely at the bottom of the economic pyramid, has triggered anxiety amongst Members of Parliament who are now working with the exchequer to source funds or risk public uproar.

The education sector is the most affected, with the Budget and Appropriations Committee (BAC) report tabled in Parliament mid-last week showing that millions of learners who have been beneficiaries of the school feeding programme may go without meals beginning July 1 as the government scraps the initiative that had taken shape in more than 20 counties.

The government has been mulling scrapping the programme since last year, citing tight fiscal space.

The state yielded to public pressure in the current financial year and allocated Sh4.7 billion to the programme.

A similar push is expected in the financial year starting July 1, owing to the huge impact it has on over two million school-going children. "Without the school feeding programme, vulnerable children will suffer.

They are more likely to drop out and face various forms of exploitation, including child labour, early marriages and recruitment into militant groups.

These risks not only endanger these children's futures but also threaten the social and economic stability of the country.

The situation will only drag affected families backward,'' Amina Boru, a programme officer at the Northern Frontier Medical Association, said.

The report also reveals that no funds have been allocated for examination and invigilation in the 2025-26 budget, raising concerns among education stakeholders.

In its submissions to the BAC, the departmental committee on education insisted that, given that examinations are considered a national security matter, adequate funding is needed to ensure their integrity and smooth administration.

"The absence of dedicated financial support has led to uncertainty within the education sector, highlighting the need for urgent budgetary intervention. In the current financial year, examinations-related funding was provided as an emergency through a supplementary budget, underscoring the critical nature of this issue,'' the report reads.

The education of students from poor backgrounds is also facing a challenge after the exchequer failed to allocate Sh34 billion to finance loans through the Higher Education Loan Board (Helb) and scholarships.

"If left undressed, these financial gaps could significantly affect university operations, potentially limiting institutional resources, academic programmes, and overall efficiency."

Moreover, the shortfall may directly affect students' welfare, restricting access to financial aid, reducing opportunities for scholarships and increasing financial strain on students.

Additionally, Sh49 billion pending bill for government-sponsored students in private universities has not been allocated in the budget for the financial year starting July 1, with institutions now threatening to lock out state-sponsored students.

Although the state has allocated resources to the Teachers Service Commission (TSC) for the recruitment of 20,000 teachers on internship, there is no funding to convert the current interns who were engaged in January this year into permanent terms.

The BAC warns that delayed conversion is likely to create a backlog that may be difficult to absorb due to budgetary constraints.

Further, Sh11.3 billion has not been allocated to cover the shortfall for Technical Vocational Education and Training scholarships. Various priority projects under President William Ruto's Bottom-Up Economic Transformation Agenda in the agricultural sector have been significantly underfunded, which might hinder their effectiveness in achieving set objectives.

Top among these are the fertiliser and seeds subsidy programmes, which have been underfunded by Sh10 billion and Sh1.7 billion, respectively.

Others are the Food Security and Crop Diversification Project and the National Livestock Development and Promotion Services, which have not been allocated any funds in the budget to be read on Thursday.

According to the Agriculture and Livestock Committee, without adequate support, agricultural productivity and food security could be affected, emphasising the urgent need for budgetary interventions to especially sustain subsidy programmes and protect farmers from financial strain.

The fertiliser subsidy programme has helped increase maize production from 61.7 million 50kg bags in 2022 to 85.7 million bags in 2025.

Already, 6.58 million farmers have been registered under the Kenya Integrated Agriculture Management System, with 53.6 million e-vouchers issued to farmers.

The MSMEs' agricultural finance, critical in enhancing farmers' access to affordable credit, has not been allocated the needed Sh1.5 billion.

On a positive note, the government has addressed pending budgetary and labour squabbles in the health sector.

For instance, it has set aside Sh5 billion to clear gratuity for Universal Health Coverage workers and additional Sh3.8 billion to confirm them into permanent and pensionable roles.

This is after reaching an agreement with UHC workers to transfer the management of their payroll to county governments effective July 1, 2025.

The agreement was reached following consultations with health worker unions, the Council of Governors, and the Ministry of Health.

The exchequer has also committed Sh7.7 billion needed for posting public health interns in the upcoming financial year.

Already, 5,499 interns have undergone the balloting exercise and will be posted as per the CBA agreement. Overall, the National Treasury PS Chris Kiptoo told the BAC that critical government projects remain underfunded to the tune of Sh218 billion due to the constrained fiscal framework.

"These expenditures were not accommodated in the 2025-26 budget plan due to the constrained fiscal framework, but will be reviewed for possible funding in the course of the implementation should the fiscal position improve."

Budget analyst Sam Kevogo says that those budget cuts should not worry Kenyans, as the government can easily review them in supplementary budgets.

He says a key focus must be put on the funding mechanism, adding that the exchequer has balanced well to ensure the taxpayer is not overburdened.

His sentiments amplify the National Treasury’s clarification in a detailed document released to the media on Saturday, in response to some of the critical questions by Kenyans in regards to Finance Bill, 2025. For instance, it explains why the VAT threshold was put at Sh5 million.

It will cushion small and micro enterprises from the cost and complexity of VAT compliance. It will also reduce the administrative burden on the tax authority by focusing on high-turnover entities.

The move is also intended to support business growth by allowing small firms time to scale before becoming VAT-liable.

The goal is to enhance administrative efficiency, ease the burden on small taxpayers, and allow voluntary registration for those who benefit from input tax claims or formal trading relationships.

The Turnover Tax (TOT) is charged at a flat rate of 1.5 per cent on gross turnover, regardless of where a taxpayer falls within the Sh1 million to Sh25 million range.

The policy directive is intended to simplify tax compliance for small businesses with modest turnover, lower the cost of tax administration for both the taxpayer and the Kenya Revenue Authority and encourage formalisation of businesses that might otherwise remain outside the tax net.

The Bill also proposes to repeal outdated or redundant provisions, such as penalty clauses in the Income Tax Act that are already addressed under the Tax Procedures Act.

These clean-up amendments eliminate duplication, reduce legal ambiguity and promote a more coherent legal framework.