Gachagua moots for a zero borrowing budget

Former Deputy President Rigathi Gachagua has proposed for a zero borrowing budget in a move he claims will reduce the budget estimates of the 2025-2026 from Sh4.8 trillion to Sh3.6 trillion. 

According to the former Deputy President, by eliminating the proposed borrowing of Sh1.1 trillion, the government will eliminate reliance on new debt to fund operations. 

While describing the Budget Estimates and the Finance Bill 2026, as  'a twin evil,' he said they would increase the tax burden on ordinary citizens while failing to stimulate economic growth.

“Despite suffocating critical sectors, the government continues to increase allocations to non-essential expenditures. The presidency and State House have continued to expand up to Sh17 billion in this year’s budget,” Gachagua stated. 

Addressing the press in Nairobi, Gachagua said the Finance Bill 2026 will tax Kenyans into poverty and that it is a killer and a threat to the common mwananchi that will break households while stifling the freedom of Kenyans and violating the very soul of our nation.

“It is a budget for 50-regime-billionaires financed by of our sweat and blood. The two documents are not a rescue plan for the common mwananchi but an increased tax burden on workers and consumers,” he said.  The Democracy for Citizens Party (DCP) leader termed Ruto’s administration a ‘‘clueless regime led by an elite cabal that continues to vomit on our feet and display their ill-gotten wealth’’ claiming that there was a plan to present a budget with an intention to borrow Sh3.13 billion per day which he said translated to an average borrowing spree of Sh125 million per hour.

“This is the money you see roofing State House, travelling overseas in luxurious jets, being dished out at State House and in UDA campaign rallies What if this money was channelled to our schools, hospitals and road infrastructure to achieve a multiplier effect in the economy?’’ he posed.

He claimed that the Ruto administration has taxed and illegally levied hardworking Kenyans a whooping Sh8.7 trillion while the administration had allegedly borrowed Sh4.2 trillion without tangible development track record.

“Our country is trapped in a dangerous borrowing cycle. The grand coalition government under former President Mwai Kibaki borrowed Sh1.3 trillion in 10 years. The Jubilee government borrowed Sh6.7 trillion in 10 years. This regime, a one-man show, has borrowed Sh 4.2 trillion in three years,” he said

He decried that out of the Sh4.2 trillion borrowed only Sh1.9 trillion went to development expenditure which he said was in direct contravention of Article 211, Constitution Section 15 2(C) of the Public Finance Management Act that prohibits the government from borrowing for recurrent expenditures. 

On the proposed budget estimates, Gachagua called for scrapping of housing levy deductions to give relief to pay slip while proposing that the government cuts wasteful and non-essential expenditure maintaining that State machinery must tighten its own belt before it demands sacrifice from the public.

"What is Sh17 billion allocation to State House stand for? Reduce that to Sh3 billion. Debt growth must be slowed and then disciplined borrowing must be linked to high-impact development, not recurrent consumption. Kenya must move toward a more sustainable fiscal posture with a credible plan to reduce the deficit over time,” he proposed. 

He noted that agriculture should be funded as the engine of food security, rural employment, and lower inflation while health should be funded as a core human right and an investment in productivity.

 “Taxation must be broadened fairly rather than imposed repeatedly on the same shrinking base. Compliance should be improved through modernization, transparency, and trust, not through punitive pressure on households already stretched to the limit,’ he said.

At the same time, Gachagua proposed a significant increase in funding for agriculture and healthcare while regretting that Agriculture currently receives only 2.0 per cent of the national budget (Sh97 billion) despite employing the majority of Kenyans and driving food security. 

“We call for a progressive increase to at least 6 per cent of the budget (approximately Sh300 billion) as an immediate step toward achieving the 10 per cent Maputo Declaration target. These resources should be directed toward irrigation, extension services, fertilizer support, value addition, storage facilities, aggregation centers and market access for farmers,” he said.

On health which is proposed to receive only 3.5 per cent of the budget (Sh167.4 billion), Gachagua demanded an increase to at least 9.5% of the budget (approximately Sh450 billion) to strengthen county hospitals, improve staffing, ensure medicine availability, and make healthcare affordable and accessible for all Kenyans.

“We demand a reduction in administrative and recurrent expenditure. Public Administration currently consumes approximately Sh 354.9 billion, while State House and other administrative expenditures continue to grow. The government must lead by example by reducing non-essential travel, hospitality, consultancies, duplication of agencies, and other administrative overheads. We propose a minimum 30% reduction (150 billion) in non-essential administrative expenditure, with the savings redirected to agriculture, health, education, and job creation,” he said.

He added “We demand realistic and credible revenue targets. For three consecutive years, the government has collected only 80% of its projected tax revenues, yet it continues to budget on increasingly ambitious assumptions. The Treasury must align revenue projections with actual economic performance and stop using unrealistic targets to justify new taxes and levies. A credible budget is built on realistic numbers, not wishful thinking.

He said the current budget estimates should not include borrowing in a bid to stop public debt that he said stood at Sh13 trillion.

“We demand a reduction in borrowing and a clear path to fiscal sustainability. The 2026/27 Budget proposes a deficit of approximately Sh1.144 trillion, financed entirely through new debt. Kenya’s public debt has already reached Sh13 trillion, while debt servicing consumes more than half of government revenues. We call for a balanced budget with zero provision for new debt,” he said. 

He said if the country was to recover, it needed a national reset built on discipline, fairness, and productive investment in a bid to restoring confidence in public finance.

“ It means using public money to unlock private activity rather than crowd it out. It means making agriculture profitable, healthcare accessible, education effective, and business financing affordable.”