The National Treasury has announced plans to release Sh48.8 billion in capitation funds to schools beginning next week, signaling a critical move to support Kenya’s education system amid ongoing economic challenges.
Cabinet Secretary for National Treasury and Economic Planning, John Mbadi, made the announcement during a press briefing, assuring school administrators that the government is steadfast in its commitment to ensuring the smooth functioning of learning institutions.
Delayed Capitation Due to Loan Repayments
Mbadi explained that the delay in releasing capitation funds was due to the government’s obligation to settle a Sh70 billion loan to external creditors, which was successfully repaid this week.
“The reason for the delay in disbursing capitation is that we had to prioritize the repayment of a Sh70 billion loan to external borrowers.” Mbadi elaborated.
“Now that this has been completed, we will release Sh48.8 billion for school capitation next week,” said Mbadi.
The funds are expected to alleviate financial pressures faced by schools, especially as the new academic term progresses.
Allocation to Counties and Salaries
Following the disbursement of capitation funds, the government will allocate Sh31 billion to county governments.
In addition, it plans to channel Sh75 billion towards the payment of civil servant salaries.
Mbadi revealed that these three disbursements, totaling Sh225 billion, will consume almost the entirety of the Sh230 billion that the government collects on average each month.
“This demonstrates the financial constraints we face as a government. Our expenditures are high, yet our revenue collection remains limited. However, we are working to balance our fiscal responsibilities while meeting the needs of Kenyans,” he said.
Legacy of Heavy Borrowing
The Cabinet Secretary highlighted the economic challenges arising from heavy borrowing in previous years, particularly since 2014.
He noted that the government is still grappling with the consequences of unsustainable debt, which continues to strain the country’s finances.
“Kenyans should understand that the heavy borrowing in past years is choking the government. While we are making strides in addressing this issue, we are not out of the woods yet,” Mbadi stated.
Commitment to Transparency and Fair Taxation
In his remarks, Mbadi reaffirmed the government’s dedication to transparency in the management of public funds and pledged to avoid imposing additional tax burdens on Kenyans.
Instead, he emphasized the need to expand the tax base and enhance the efficiency of tax collection systems.
“I assure Kenyans that we will not overtax them. Our focus is on broadening the tax base to ensure that those who have been evading taxes are brought into the fold.” Said Mbadi.
“Additionally, we are improving the Kenya Revenue Authority’s efficiency in tax collection and curbing corruption to maximize the use of taxpayers’ money,” he explained.
Inspection and Engagement with Citizens
The Treasury CS also highlighted his ongoing efforts to engage with Kenyans directly by visiting various parts of the country.
These visits aim to assess the impact of government policies, monitor progress on development projects funded by taxpayers, and identify challenges faced by citizens.
“I will continue touring the country to see firsthand how taxpayer money is transforming lives and to understand the obstacles Kenyans still face,” he noted.
While the release of Sh48.8 billion in capitation funds is a welcome move for schools, it also underscores the delicate balancing act the government must perform to address competing fiscal priorities.
With debt repayments, county allocations, and salary payments dominating expenditure, the Treasury is under immense pressure to stabilize the economy while ensuring essential services are not disrupted.
The government’s emphasis on accountability, tax reform, and fiscal prudence provides a glimmer of hope for long-term economic stability, even as the immediate challenges persist.
For now, the timely release of capitation funds signals a step in the right direction for the education sector.