By Pascal Ndegwa - Reporter
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Kenya, October 23, 2026 - The National Treasury has released updated numbers for the 2027/28 financial year, and the picture is clearer , and tighter, than it was two months ago.
The total proposed budget now stands at KSh 5.416 trillion, or 23.6 percent of GDP. That is higher than the KSh 5.323 trillion projected in the earlier Draft Budget Review and Outlook Paper. Recurrent spending is set to cross the KSh 4 trillion mark for the first time, reaching KSh 4.021 trillion. Development spending, however, has been revised downwards from KSh 958 billion to KSh 915.8 billion.
Total revenue is now projected at KSh 4.004 trillion. Ordinary revenue has been pushed up slightly to KSh 3.249 trillion. Even with the higher revenue target, the deficit is expected to widen to KSh 1.353 trillion, or 5.9 percent of GDP.
How the government plans to fill that gap has also shifted. Domestic borrowing is projected to drop to KSh 929.1 billion from the earlier figure of KSh 1.085 trillion. External borrowing, on the other hand, has nearly doubled to KSh 423.8 billion from KSh 235.9 billion.
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The numbers show a government trying to balance higher day-to-day costs with a smaller development envelope, while leaning more on foreign loans and less on the local market. The National Treasury has invited public comments on the Draft Budget Policy Statement, with a deadline of 16 November.
These figures will shape the final budget that goes to Parliament next year. For now, they signal that the next financial year will feature a larger overall budget, heavier recurrent spending, trimmed development allocation, and a bigger role for external borrowing.