Kenya to target a budget deficit of 4.9% of GDP in 2026/27

Kenya will target a budget deficit of 4.9% of GDP in the 2026/27 fiscal year of July to June, a senior finance ministry official said on Wednesday, keeping it broadly in line with the 4.8% forecast for this financial year.

The East African nation has been struggling with heavy debt repayments in recent years after it ramped up borrowing in the period since 2013 to fund infrastructure projects, forcing the government to try to maintain a fiscal consolidation path.

"We really need to focus on fiscal sustainability," Chris Kiptoo, the Principal Secretary at the Ministry of Treasury, told a budget preparation event.

The government has to carry out a delicate balance to ensure it is raising adequate revenues for critical expenditures, while meeting its debt obligations, he said.

The government plans to fill the budget gap with net external financing of Ksh.241.8 billion ($1.86 billion), Kiptoo said, and a net domestic financing of Ksh.775.8 billion.