Kenya is preparing its biggest ever budget, with total expenditure for the 2026/2027 financial year projected to hit Ksh 4.65 trillion, setting the stage for another year of heavy government spending and increased borrowing.
According to the draft Budget Review and Outlook Paper released by the National Treasury, the new spending plan represents a 9.7 per cent increase from the current financial year and will account for 22.2 per cent of the country’s Gross Domestic Product (GDP).
Total revenue, including Appropriation in Aid, is expected to reach Sh3.6 trillion, leaving a deficit of more than Sh1 trillion. To bridge the gap, the government plans to borrow Ksh 1.02 trillion, raising questions over President William Ruto’s repeated assurance that his administration will “live within its means.”
The President has often maintained that his government will reduce reliance on debt by managing resources better and partnering with the private sector through Public-Private Partnerships.
“In less than 20 years, Kenya will undertake development projects without having to rely on external debts,” Ruto said during a church service in Siaya in August.
However, new data from the Treasury shows Kenya’s borrowing trend is far from slowing down. The government has been taking loans equivalent to Ksh 32.4 million every hour over the past four months, translating to Sh23.9 billion per month, Ksh 776.6 million per day, Ksh 539,321 per minute, and almost Ksh 9,000 every second.
Since assuming office, the Kenya Kwanza administration is estimated to have borrowed between Sh3.2 trillion and Sh3.5 trillion, almost double the rate of borrowing by the previous two governments.
Economists and opposition leaders are warning that the rising debt could strain public finances and limit resources for essential services and development projects.
Kiharu MP Ndindi Nyoro has cautioned that the country risks “dire economic consequences” if the borrowing spree continues unchecked.
He revealed that between May and August this year, Kenya secured Ksh 95.5 billion in new loans from bilateral, multilateral, and commercial lenders.
The Treasury plans to borrow Ksh 775.8 billion locally and Ksh 241.8 billion externally to finance the deficit, representing a 10 per cent increase compared to the current financial year.
Meanwhile, the government expects the Kenya Revenue Authority (KRA) to collect at least Ksh 3 trillion in ordinary revenue next year, despite the agency struggling to meet this year’s targets.
KRA reported missing its revenue collection target for the first three months of the year by nearly Sh50 billion, collecting Ksh 657.2 billion against a target of Sh707 billion. The shortfall was attributed to slowed business activity and political instability that rocked the country in mid-2025.
To meet the current year’s goal of Sh2.75 trillion, KRA must collect about Sh2.13 trillion by June 30, a difficult task given the sluggish economy.
The 2026/2027 budget process is still in its early stages. Treasury has issued budget circulars to ministries and departments, and the Budget Policy Statement (BPS) outlining government priorities is expected in Parliament by February 15, 2026. The final spending estimates will then undergo public participation before the Finance and Appropriation Bills are submitted for approval.
If current projections hold, the Ksh 4.65 trillion plan will be the largest in Kenya’s history, defining how the Ruto administration balances its ambitious development agenda with the country’s deepening debt burden.
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