From July to September, revenue fell Sh58.2 billion short of target, spending exceeded it by Sh116.9 billion, and the deficit reached Sh329.1 billion — nearly twice the Sh174.8 billion target. This is the incumbent’s record and the baseline for assessing every fiscal promise this season.
Revenue rose 14.4 per cent year on year to Sh655.8 billion, reversing a 2.9 per cent first-quarter decline. Still, collections missed the target by 8.2 per cent: growth is measured against last year, while the deficit reflects the shortfall against plan.
Customs drove the quarter: imports rose 25.6 per cent, and September collections reached Sh90.05 billion, Sh965 million above target, boosted by fertiliser, palm oil, rice, and iron and steel shipments.
PAYE, corporation tax and domestic VAT fell short of expectations. Analysts project domestic revenue will drop to 13.9 per cent of GDP this year, from 18.1 per cent a decade ago.
Spending: Over Plan On Every Line
Spending exceeded the quarterly projection by Sh116.9 billion: Sh59.3 billion in recurrent spending, Sh34.7 billion in development, and Sh22.9 billion in county allocations.
The Treasury proposes tax rationalisation, expanding the digital tax net, and shifting infrastructure costs to the newly capitalised National Infrastructure Fund. Only the latter changes where costs are booked, not how much is raised.
The deficit gap is Sh154.3 billion. Revenue and spending variances total Sh157.3 billion, leaving about Sh3 billion attributable to other items, probably grants.
What It Means For Promises
The Q1 deficit of Sh329.1 billion was 28.7 per cent of the annual Sh1,145.2 billion net financing requirement, exceeding the 25 per cent for the year elapsed and the 15.3 per cent target.
Reducing the deficit from 6.8 per cent of GDP last year to 5.5 per cent now looks harder, with interest alone budgeted at about 41 per cent of ordinary revenue.
A recurring Sh154.3 billion quarterly overshoot would total about Sh617 billion annually, exceeding the Sh500 billion low end of Sifuna’s wastage range.
This illustrates scale, not a forecast; quarterly figures are seasonal. Both the challenger’s promise to “cut waste” and the incumbent’s pledge to consolidate face the same problem: neither is moving the needle.
