The government of Kenya projects a 5.3% growth in Kenya’s Economy in the 2026/2027 financial year, according to the Budget Policy Statement tabled before the National Assembly on Thursday, March 5.
According to the statement, the economy is projected to grow by 5.3 percent in 2026, up from 4.7 percent in 2024, according to projections in the budget policy framework.
The anticipated growth is attributed to improving macroeconomic stability and stronger performance in key sectors, including agriculture, construction, tourism, transport, and financial services.
Government revenue is also expected to increase, with projections indicating that the government could raise KSh 3.588 trillion in total revenue for the 2026/27 financial year, equivalent to 17.1 percent of the country’s Gross Domestic Product (GDP).
The increase is linked to ongoing reforms in tax administration, improved compliance systems, and the digitalization of revenue collection.
The inflation rate is also expected to remain stable within the Central Bank’s target range of around five percent.
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Government to increase Expenditure to Target Service Delivery
Government expenditure for the 2026/27 financial year is projected at KSh 4.74 trillion, an increase of more than KSh 435 billion over the previous fiscal year.
The proposed spending will prioritize sectors considered critical to economic growth and public service delivery, including education, healthcare, agriculture, infrastructure, and national security.
The government is also implementing initiatives, including 47 County Aggregation and Industrial Parks (CAIPs), aimed at promoting value addition, supporting agro-processing, and reducing post-harvest losses.
The industrial parks are expected to stimulate regional economic activity and create jobs closer to production zones.
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Infrastructure investment remains another major focus area in the 2026/2027 budget, with continued spending planned for roads, electricity generation, irrigation systems, and logistics infrastructure.
Kenya is also targeting an expansion of electricity generation capacity by 10,000 megawatts, using a mix of geothermal, solar, wind, and hydropower sources to support industrialization and improve the reliability of power supply.
At the same time, county governments are projected to receive KSh 420 billion as their equitable share allocation to support devolved services and local development programs.
The framework also outlines plans to reduce the national fiscal deficit to 5.3 percent of GDP as part of efforts to stabilize public debt while maintaining development spending.
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