Revealed: Sh1.3trn of Kenya's Sh4.8trn budget goes into debt repayment
Details from the Office of the Controller of Budget, show that the country’s public debt is at Sh12.29 trillion...
✨ Key Highlights
Kenya's Sh4.8 trillion budget for fiscal year 2026/27 faces significant strain, with a staggering Sh1.3 trillion allocated to debt repayment, impacting development spending.
- A substantial portion, Sh1.3 trillion, of the Sh4.79 trillion budget is earmarked for interest payments on loans.
- The National Treasury, led by Cabinet Secretary John Mbadi, presented these estimates to the National Assembly.
- Despite efforts to manage the fiscal deficit and debt, the country's public debt stands at Sh12.29 trillion, with projections of continued borrowing.
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Sh1.3trn of Kenya's Sh4.8trn Budget Goes to Debt Repayment - May 2026
Kenya's Sh4.8 trillion budget for fiscal year 2026/27 faces significant strain, with Sh1.3 trillion allocated to debt repayment, impacting development spending. An audit by Auditor-General Nancy Gathungu revealed that the National Treasury illegally diverted Sh30 billion in Eurobond proceeds to cover domestic debt shortfalls, violating the bond's subscription agreement. The proposed Finance Bill 2026 is set to end tax relief for Kenya Airways and significantly expand the digital tax net. Separately, the Kenyan government proposed a new 5 percent tax on imported second-hand clothing, known as mitumba, under the draft Finance Bill 2026.
