Kenya’s Budget Deficit Seen Rising to 5.9% of GDP in 2027/28

Nairobi — Kenya’s budget deficit is projected to widen to 5.9% of gross domestic product (GDP) in the 2027/28 fiscal year, up from an estimated 5.5% in 2026/27, as the government outlines its financing plans for the coming years.

By Ukumbi Afrika09 October 2026 · 2 min read

Image accompanying: Kenya’s Budget Deficit Seen Rising to 5.9% of GDP in 2027/28

The Finance Ministry announced the projections on Friday, highlighting a shift in the government’s expected borrowing mix, with external financing set to increase while domestic borrowing declines.

Net domestic financing is projected at 929.1 billion Kenyan shillings ($7.17 billion) in the fiscal year beginning in July 2027, down from 1.04 trillion shillings in the current fiscal year.

Meanwhile, net external financing is expected to rise to 423.8 billion shillings from 247.2 billion shillings in 2026/27, indicating a greater anticipated contribution from external sources to help cover government spending needs.

The projected increase in the budget deficit comes as Kenya continues to manage competing fiscal demands, including public expenditure requirements and the need to maintain sustainable debt levels.

The government typically presents its annual budget to Parliament in June. However, the 2027/28 budget is expected to be presented earlier because Kenya is scheduled to hold general elections in August 2027.

The timing of the budget presentation could influence discussions around government spending priorities, revenue mobilisation and borrowing plans ahead of the elections.