The Kenya Revenue Authority (KRA) has surpassed the revenue target of Ksh 2.555 Trillion for the Financial Year 2024/2025 after collecting Ksh 2.571 Trillion.
The performance is a growth of 6.8% and a performance rate of 100.6%, compared with the Kshs. 2.407 Trillion collected in the last financial year.
According to KRA, the revenue performance reflects the prevailing economic indicators especially the GDP growth of 4.7% (Economic Survey) with notable growth recorded in key sectors like agriculture, forestry and fishing, financial and insurance activities, transportation and storage, and real estate.
Kenya’s inflation rate in 2025
Further, overall inflation eased to average at 3.6% in 2024/25 compared to 6.3% in 2023/24, while exchange rate of the Kenya Shilling against the US Dollar strengthened to an average of Kshs 129.35/US$ in the current year under review down from Kshs 144.1 in the previous year.
In addition, international oil prices per barrel dropped by 12.5%, with these factors leading to aggregate downward adjustment of local fuel pump prices for both petrol and diesel by 11.8% and 12.2% respectively.
However, other factors moved contrary to expectations, thus impacting revenue negatively.
For example, the first half of the Financial Year 2024/25 was characterised by numerous economic headwinds, including shelving of the Finance Bill 2024, high bank lending rates, global tariffs war, and international conflicts.
In particular, overall import values recorded weak growth of 0.04%, affected by drop in import values of fuels and lubricants, and food and beverages which recorded declines of 16.4% and 14.6% respectively.
Further, export values declined by 2.0% especially from horticulture (-2.5%) and tea (-15.4%).
In addition, access to credit by the private sector remained constrained due to higher commercial bank lending rates in the current year compared to the previous year.
However, a downward adjustment in lending rates is anticipated following the Central Bank of Kenya’s decision to lower the benchmark rate to 9.75% in June 2025.
How much did banks loan Kenyan government in 2024?
As at the end of December 2024, credit extended by commercial banks to the National Government grew by 13.9 per cent, while credit to the private sector declined by 1.1 per cent. This contraction in private sector credit dampens the prospects for investment and expansion across key economic sectors.
Notwithstanding these challenges, KRA’s robust measures yielded a significant revenue collection turnaround in the second half of the financial year. Revenue grew by 9.1%, compared to the 4.5% growth recorded in the first half of the financial year.
