Kenya's National Treasury is set to save over Ksh27 billion annually following the successful renegotiation of terms for three Standard Gauge Railway (SGR) loans with China.

• The renegotiation will result in annual savings of approximately USD 215 million, equivalent to over Ksh27 billion.
• The announcement was made by Cabinet Secretary John Mbadi.
• This deal was achieved through bilateral engagement without resorting to debt restructuring, and aligns with a broader strategy to ease external debt pressure.

Kenya's economy is projected to grow by 5.1% in 2027, according to a forecast by the National Treasury. This optimistic outlook anticipates a recovery driven by easing external pressures and normalized global supply chains, despite ongoing concerns over fuel prices and currency stability.

• The National Treasury forecasts economic growth of 5.1% in 2027.
• The forecast is provided by the National Treasury in their 2026 Budget Review and Outlook Paper (BROP).
• Potential risks include prolonged geopolitical tensions, higher international oil prices, and adverse weather conditions, which could impact the projected recovery.

The Kenyan Treasury is considering extending the 8% VAT cut on fuel beyond October and introducing further subsidies to mitigate high prices, influenced by the volatile Middle East situation.

• Treasury Cabinet Secretary John Mbadi is weighing the decision to extend the VAT relief and exploring funding options for subsidies.
• The government has previously extended the 8% VAT relief and provided a Ksh945 million subsidy from the Petroleum Development Levy.
• The decision is dependent on the unfolding Middle East conflict and its impact on global oil prices, with a balancing act between revenue needs and inflation concerns.