NAIROBI, Kenya – Kenya’s total spending for the 2026/27 financial year is projected to hit a record Sh4.65 trillion, according to new figures from the National Treasury, signaling a 9.7 percent jump from the current fiscal year’s expenditure.
The draft Budget Review and Outlook Paper (BROP) released this week shows that the government’s expenditure will account for 22.2 percent of the country’s Gross Domestic Product (GDP).
However, the report reveals that to finance this ambitious plan, the state could be forced to borrow up to Sh1.02 trillion, raising fresh concerns over President William Ruto’s pledge to keep borrowing in check.
“The total revenue for 2026/27, including Appropriation-in-Aid (AIA), is projected at Sh3.6 trillion or 17.1 percent of GDP,” the Treasury report notes.
Borrowing Contradicts Ruto’s Fiscal Discipline Pledge
President Ruto has repeatedly said his administration will “live within its means,” citing a long-term vision to fund development without relying on debt.
In August, he declared during a service in Siaya that “in less than 20 years, Kenya will undertake development projects without having to rely on external debts.”
But the latest figures show that the borrowing trend is far from slowing. Treasury data indicates that between May and August 2025 alone, the government borrowed Sh95.5 billion from bilateral, multilateral, and commercial lenders — equivalent to Sh32.4 million every hour over the four-month period.
Parliamentary data shows that the Kenya Kwanza administration has borrowed between Sh3.2 trillion and Sh3.5 trillion since taking office, nearly doubling the rate seen under previous regimes.
The national debt has already crossed the Sh11 trillion mark, with economists warning that the country could soon face tighter fiscal space and rising debt-servicing costs.
Mounting Fiscal Pressure
According to the draft outlook, the Treasury expects to raise Sh3 trillion in ordinary revenue through the Kenya Revenue Authority (KRA), a target that experts say may be overly ambitious given recent collection shortfalls.
KRA recently reported a Sh50 billion shortfall for the first quarter of the current fiscal year, collecting Sh657.2 billion against a Sh707 billion target.
The agency attributed the miss to reduced economic activity and the political instability that rocked the country during the June and July protests.
To plug the deficit, the government plans to borrow Sh775.8 billion domestically and Sh241.8 billion externally, representing a 10.1 percent increase from the current year’s borrowing.
Kiharu MP Ndindi Nyoro warned that unchecked borrowing could trigger “dire economic consequences,” calling for urgent fiscal reforms and stronger revenue collection mechanisms.
Budget Cycle Underway
The draft spending plan is still in its early stages, with the final budget expected to undergo several revisions before presentation to Parliament.
Under Kenya’s four-stage budget cycle — formulation, approval, implementation, and audit — the process begins with Treasury issuing budget circulars by August 30, followed by the Budget Policy Statement (BPS), which outlines government priorities and must be submitted to Parliament by February 15.
Afterward, the final Budget Review and Outlook Paper is published before ministries and agencies submit detailed estimates for parliamentary approval ahead of the next fiscal year starting July 1, 2026.
