Treasury Cabinet Secretary John Mbadi has shed light on Kenya’s transition to zero-based budgeting (ZBB) for the 2025/26 fiscal year, a move aimed at improving accountability and curbing wasteful government spending.
Speaking during a town hall meeting on Tuesday night, CS Mbadi said the government began implementing ZBB by instructing all Ministries, Departments, and Agencies (MDAs) to reassess their budget plans from scratch. This process, carried out in October and November 2024, involved submitting detailed justifications for all expenses through the Integrated Financial Management Information System (IFMIS).
“Each sector was justifying its zero-based budget,” Mbadi explained. “They provided the exact number of employees, recruitment plans, and costed salaries accordingly. The process is intended to eliminate blanket allocations and enforce discipline in public spending.”
Unlike the traditional incremental budgeting method, where each year’s budget builds upon the previous one with minor adjustments, ZBB starts from a “zero base.” Every expenditure item must be validated, regardless of previous allocations. According to Mbadi, the older system allowed favoritism in resource allocation, often influenced by preferences rather than actual need.
“This year, one of the communications that came from the Treasury was that we were going to do a zero-based budget,” he said. “We developed a tool in the IFMIS system and shared it with sector working groups. This tool helps standardize pricing, especially for acquisition expenses.”
The CS emphasized that standardizing procurement costs across government entities would significantly reduce unnecessary expenditure and enhance value for money. He also noted that ZBB would help the government better align expenditure with its development priorities and available resources.
As Kenyans grapple with the effects of increased taxation, concerns about transparency and prudent use of public funds have grown. Mbadi assured citizens that zero-based budgeting is part of broader reforms to address such issues and rebuild public trust.
“We want to ensure every shilling collected from taxpayers is used wisely,” he concluded.
The Treasury’s shift to ZBB marks a major step in public financial management reforms, with the goal of fostering fiscal discipline and restoring confidence in government budgeting processes.
