Kenya’s budget deficit is projected to widen to 5.9% of gross domestic product (GDP) in the 2027/28 financial year, up from an estimated 5.5% in 2026/27, as the government outlines its financing plans for the coming years.
According to the Finance Ministry, the projected increase comes alongside a shift in the government’s borrowing strategy, with domestic financing expected to decline while external borrowing rises.
Net domestic financing is forecast at 929.1 billion Kenyan shillings ($7.17 billion) for the fiscal year beginning in July 2027, down from 1.04 trillion shillings in the current financial year.
Meanwhile, net external financing is expected to rise to 423.8 billion shillings, compared with 247.2 billion shillings projected for 2026/27.
The figures point to Kenya’s increased reliance on external financing to help cover its budget gap, even as domestic borrowing requirements are expected to ease.
Kenya’s finance minister traditionally presents the national budget to parliament in June. However, the government plans to bring forward the presentation of the 2027/28 budget ahead of the country’s general elections scheduled for August 2027.
The projected widening of the deficit will place public borrowing and debt management among the key fiscal issues facing the government as it prepares its next budget.
