Treasury proposes Ksh.4.82 trillion budget for 2026/27 financial year

The National Treasury is proposing to spend up to Ksh.4.8 trillion for the next financial year beginning July 2026.

To meet the total expenditure demand, the Treasury intends to borrow upwards of Ksh.1.1 trillion, much of it from the domestic market.

This is despite acknowledging a possible economic growth slowdown from a projected 5.3 per cent to 5.0 per cent, on the back of the US–Israel-Iran war and its effects on international trade.

The Ksh.4.8 trillion will be shared under three main categories: Ksh.2.89 trillion at the national government level, which includes the Judiciary and Parliament; Ksh.1.5 trillion for Consolidated Fund Services; and Ksh.420 billion for county governments, a rise of Ksh.5 billion from the current year’s allocation.

At the national level, Ksh.3.54 trillion will finance recurrent expenditure, including salaries, operations and maintenance, and public debt servicing. Development expenditure will account for Ksh.749.0 billion.

The expenditure will be financed through Ksh.3.63 trillion in revenue, including taxes and Appropriations-in-Aid (A-I-A) — fees and levies collected by government departments and agencies for services rendered. Of this, ordinary revenue is projected to account for Ksh.2.99 trillion, up from the current year’s Ksh.2.78 trillion target.

With a deficit of Ksh.1.1 trillion, the National Treasury proposes to borrow Ksh.116.2 billion externally, while Ksh.995.7 billion will be sourced locally — marking the highest domestic borrowing in Kenya’s history.

In sharing the Ksh.2.89 trillion allocated to the national government, the Executive will take 97 per cent, amounting to Ksh.2.8 trillion.

Out of this, Ksh.1.98 trillion is set to be spent on recurrent expenditure, while Ksh.840.6 billion will be channelled towards development projects through ministries.

In the 2026/27 budget, Parliament will receive Ksh.48.69 billion, while the Judiciary is set to receive Ksh.30.44 billion.