Nairobi — Economist Ashish Chadda has faulted Treasury's 2025 budget proposal, calling on the government to review the Draft 2025 Budget Policy Statement for the fiscal year 2025/26 to 2027/28.
Chadda, in a letter addressed to Treasury Cabinet Secretary John Mbadi, lists five major points of concern that he wants addressed.
This includes public participation and budget transparency, declining GDP growth, and government expenditures, current account deficit and exchange rate policy, implementation of accrual accounting, and zero-based budgeting.
According to Chadda, the status quo risks undermining the gains made so far, including the stabilizing of the local unit against the greenback.
He criticized Treasury for not fully incorporating public feedback into the budget, despite the legal requirement for public participation.
"Indeed, as good governance would dictate the Treasury is required to have public participation prior to submitting the Budget Policy Statement for approval," read the letter in part.
"However, it is public knowledge the views of the Public are not really incorporated into the Budget Policy Statement."
The economist noted that while the Treasury projected a sharp rise in GDP growth for 2025, data from recent quarters revealed a consistent decline in growth rates.
According to Chadda, the GDP growth rates for the past few quarters had been steadily decreasing, from 5.5% in Q1 2023 to 4.0% in Q3 2024, which he attributed to an array of factors, including the increasing government expenditure, which he argued is putting pressure on the economy and leading to higher taxes.
Chadda similarly raised alarms over the projected increase in government expenditure, which is expected to rise by over Sh1 trillion from 2023 to 2026.
He pointed to the fiscal framework proposed through the Budget Policy Statement, which outlined a significant increase in both revenue and expenses.
While additional revenues are expected to come from new tax measures, Chadda cautioned that this could hurt the economy, particularly for already burdened taxpayers.
