NAIROBI, Kenya — The Law Society of Kenya (LSK) has raised concerns over the government’s proposed KSh4.8 trillion budget for the 2026/27 financial year, warning that key provisions in the Finance Bill could expose the country to hidden debt and place an unsustainable burden on taxpayers.
In a statement issued as Treasury Cabinet Secretary John Mbadi presented the budget in Parliament on Thursday, LSK President Charles Kanjama described the election-year spending plan as disconnected from the economic realities facing many Kenyans.
Kanjama noted that the budget carries a deficit of KSh1.11 trillion, with the government planning to finance nearly 90 percent of that gap through domestic borrowing amounting to KSh997.8 billion.
According to the LSK president, such heavy reliance on local borrowing could crowd out private sector access to credit, hamper business growth, and undermine constitutional principles governing public finance.
“As Treasury CS John Mbadi presents a massive KSh4.8 trillion budget for the 2026/27 financial year, the Law Society of Kenya stands as a vigilant constitutional watchdog over the Finance Bill and the Appropriation Bill,” Kanjama said.
He acknowledged the government’s decision to prioritize sectors such as health and education but insisted that public expenditure must be transparent, efficient and free from administrative waste.
The lawyers’ body also questioned the constitutional validity of a proposed securitisation framework contained in the Finance Bill 2026.
The proposal would allow future public revenues, including collections from the Housing Levy, Road Maintenance Levy and Railway Development Levy, to be pledged as collateral for financing arrangements.
Kanjama warned that the mechanism could create what he termed a “hidden debt” structure by allowing future revenues to be committed outside the traditional Consolidated Fund framework.
“Pledging future public revenues as collateral to bypass the Consolidated Fund creates a dangerous hidden debt mechanism that threatens to bankrupt future state agencies,” he said.
The LSK said it would closely scrutinize the Finance Bill and participate actively in public consultation processes before Parliament considers the proposed tax measures.
The society further vowed to challenge in court any provisions it believes violate constitutional requirements on public participation, fairness, equity and prudent management of public resources.
“The LSK will not sit idly by as our national liabilities are understated. We will analyze these proposals in meticulous detail, aggressively engage in public consultation phases, and take swift legal action against any provisions that violate constitutional standards,” Kanjama said.
