Irungu Nyakera Exposes Kenya’s Economic Crisis, Calls for Fiscal Discipline

 

By John Kariuki

Farmers Party Leader Irungu Nyakera has raised the alarm over Kenya’s deteriorating economic situation following an analysis of the 2025 Budget Policy Statement (BPS) and a recent interview by CS John Mbadi on JKL. According to Nyakera, the government’s financial mismanagement and excessive taxation are pushing Kenyans deeper into economic distress.

Kenya’s public debt has skyrocketed to Ksh 11 trillion, while government spending is projected to hit Ksh 4.34 trillion in 2025, up from Ksh 3.95 trillion this year. The government’s plan to reduce the fiscal deficit to 3.8% of GDP offers little relief when over 60% of total revenue is swallowed by debt repayment, leaving minimal funds for essential development projects. Furthermore, government wages have now surpassed Ksh 1 trillion, adding pressure to an already strained economy. Nyakera insists that without urgent reforms, Kenya is headed for an economic disaster.

Nyakera challenges the government’s 5.3% GDP growth projection for 2025, terming it unrealistic given the current economic conditions. He argues that manufacturing, agriculture, and SMEs—the key drivers of economic growth—are struggling, yet the government has failed to introduce concrete policies to support them. “Without decisive action, including the payment of pending bills and tax reliefs for struggling businesses, this projected growth will remain a mirage while unemployment continues to rise,” says Nyakera.

Nyakera disputes CS Mbadi’s claim that Kenyans are not overtaxed, citing overwhelming deductions on salaries and excessive levies on businesses. He highlights that the Housing Levy and Social Health Authority (SHA) deductions alone take over 4% of payroll before PAYE, NHIF, NSSF, and VAT. Fuel levies continue to rise, increasing the cost of goods and transport, while informal businesses, once a safe haven for self-employment, are now heavily taxed. Nyakera asserts that instead of burdening Kenyans with new taxes, the government must seal revenue leakages caused by corruption and mismanagement.

Nyakera expresses outrage over the government’s wasteful spending, as highlighted in the Auditor-General’s 2023/24 report. He reveals shocking figures: Ksh 9.2 billion spent on foreign travel, Ksh 7.6 billion on hospitality and entertainment, and Ksh 3 billion on luxury vehicles. “These billions could have been used to stock public hospitals with medicine, fund education, or lower the cost of living,” says Nyakera. He calls for immediate cuts on non-essential government spending, including unnecessary foreign trips, luxury perks, and entertainment allowances.

Nyakera criticizes county governments for becoming centers of corruption instead of service delivery. He points to the Auditor-General’s reports, which expose billions in unaccounted funds. “Despite clear evidence of theft, governors walk free while citizens continue to suffer from poor services,” he laments. To restore faith in devolution, Nyakera demands regular independent audits of county finances, strict enforcement of accountability measures, and severe consequences for corrupt officials.

Nyakera calls out the executive’s dominance over Parliament, warning that this weakens oversight on public spending. He notes that key financial decisions are often made without thorough debate, reducing transparency. “Parliament must assert its authority over budget allocations and reject unnecessary expenditures that do not benefit the people,” he insists. He further urges Kenyans to hold MPs accountable for how they vote on budget matters.

Nyakera concludes that the 2025 BPS and CS Mbadi’s statements expose a government that refuses to cut wasteful spending yet demands more from its citizens. He calls on the government to reduce unnecessary expenditures and channel funds into essential services, end corruption and mismanagement to ensure every shilling is used effectively, and provide real economic relief by lowering taxes and supporting key sectors.

“If the government does not act now, the economic crisis will only deepen, pushing more Kenyans into financial distress,” warns Nyakera. He urges citizens to demand accountability and responsible leadership before it is too late.

March 21, 2025