CS Mbadi explains shift to zero-based budgeting

ZBB is a budgeting method where all expenses must be justified for each financial year, starting from a "zero base", rather than building on the previous year's budget. 

During a town hall discussion on Tuesday night, CS Mbadi stated that the exchequer approached all Ministries, Departments, and Agencies (MDAs) in October and November 2024 to analyze their budgetary plans for meeting their ZBB targets.

This, he added, was done through the IFMIS system, which is a comprehensive automated platform designed to streamline financial operations for both the national and county governments.

"Each sector was justifying its zero-based budget. Each sector was coming up with the actual number of employees they have in their system, the people they want to employ and costing their salaries," he noted.

CS Mbadi stated that the shift was motivated by the need to streamline the management of public expenditure, and that the move will prevent the misuse of national revenue through unnecessary spending.

"Our budgeting process was on incremental basis which simply means we look at what was allocated the previous year and you allocate an additional amount depending on how you like that MDA," Mbadi added.

"This year, one of the communications that came from the Treasury was that we were going to do a zero-based budget and we developed a tool in the IFMIS system which was given to the sector working groups to use, so that you will find standardization of prices."

He stated that acquisition expenses will now be streamlined across ministries and government institutions, resulting in better use of public funds.

As tax increases remain in effect, the public is becoming increasingly concerned about the potential misuse of national revenue.