Kenya's Treasury has warned that a projected budget deficit of Sh1.12 trillion for the upcoming fiscal year poses a significant threat to the nation's fiscal stability, a sharp increase from the previous budget.

• The deficit highlights the unsustainable nature of continued borrowing to bridge the gap between government revenue and expenditure.
• Treasury Principal Secretary Chris Kiptoo emphasized the need for fiscal consolidation and broadening the tax base to ensure more equitable burden-sharing.
• The government plans to finance the deficit primarily through domestic borrowing (Sh924.5 billion), raising concerns about credit availability for the private sector and escalating debt servicing costs.

The Kenyan National Assembly has approved the government's plan to sell a portion of its stake in Safaricom, allowing the State to offload shares effective April 1, 2026.

• The government expects to receive Sh40.2 billion from the sale of its residual 20 percent shareholding.
• Key entities involved include the National Assembly, the government of Kenya, and Safaricom PLC.
• The deal, outlined in Sessional Paper No. 3 of 2025, assures no job losses at Safaricom and preserves its existing dealer network and business model for at least a decade.

Kenya's National Treasury Principal Secretary, Chris Kiptoo, has acknowledged that the country's reliance on borrowing to finance its budget is unsustainable, even as the government plans to borrow more to cover a Sh1.12 trillion deficit for the 2025/26 financial year.

• The planned enhanced borrowing will push Kenya's debt stock to a total of Sh12.8 trillion.
• Chris Kiptoo identified fiscal consolidation, including expanding the tax base, as the only solution to avert a financial crisis.
• The supplementary budget, which necessitates additional borrowing, includes funds for salary reviews and commitments to an implement 2025-29 Collective Bargaining Agreement for teachers and civil servants.