By the 254.ke Newsroom | Updated October 29, 2026
Kenya’s draft budget for the 2027/28 financial year stands at Sh5.416 trillion, according to the Treasury’s draft Budget Policy Statement, with a fiscal deficit of Sh1.353 trillion (5.9 percent of GDP). The figure is up from the Sh5.323 trillion outlined about two months earlier, and recurrent spending crosses Sh4 trillion for the first time. The Treasury has opened public consultation, with comments due by November 16.
Headlines have rounded the total to “Sh5.3 trillion” or “Sh5.4 trillion” depending on which version of the draft they cite. The detail below separates the two.
What does the draft 2027/28 budget contain?
The numbers reported from the draft Budget Policy Statement, as of October 29, 2026:
| Item | Latest draft | Earlier estimate |
|---|---|---|
| Total spending | Sh5.416 trillion (23.6% of GDP) | Sh5.323 trillion |
| Recurrent spending | Sh4.021 trillion (17.5% of GDP) | Sh3.887 trillion |
| Development spending | Sh915.8 billion | Sh958 billion |
| Total revenue | Sh4.004 trillion (17.4% of GDP) | Sh3.943 trillion |
| Ordinary revenue | Sh3.249 trillion | Sh3.208 trillion |
| Fiscal deficit | Sh1.353 trillion (5.9% of GDP) | Sh1.321 trillion (5.7% of GDP) |
| Domestic borrowing | Sh929.1 billion | Sh1.085 trillion |
| External borrowing | Sh423.8 billion | Sh235.9 billion |
Recurrent spending in the current 2026/27 year is about Sh3.09 trillion, so the proposed jump is large. Development spending moves the other way, falling by roughly Sh42 billion between the two drafts. Recurrent and development figures together come to about Sh4.94 trillion, and the report from Kenya Today does not itemise the remaining balance of the Sh5.416 trillion total.
How will the deficit be funded?
The draft leans more on foreign lenders. Planned domestic borrowing falls to Sh929.1 billion from Sh1.085 trillion, while external borrowing rises to Sh423.8 billion from Sh235.9 billion. The two add up to about Sh1.353 trillion, matching the deficit.
For comparison, the approved 2026/27 budget is Sh4.82 trillion against projected revenue and grants of Sh3.674 trillion. That leaves a deficit of about Sh1.146 trillion, financed by Sh1.03 trillion in domestic borrowing and Sh116.2 billion externally. The 2027/28 plan therefore shifts the financing mix substantially toward external sources.
Which roads and dams are in the plan?
The Star reported on October 29 that the draft Budget Policy Statement and a Public Private Partnerships Directorate report point to private investors, not only public money, funding much of the infrastructure pipeline. The PPP pipeline is reported at 13 existing projects, 48 approved and 7 awaiting approval, with a combined estimated value of Sh2.46 trillion.
- Nairobi–Mombasa Expressway (A8, 461 km): a toll road upgrade from two lanes to at least four. A fresh expression of interest was published on August 11, 2026, and bid evaluation was under way as at September 30.
- Mau Summit–Eldoret–Malaba (243 km): a four-lane toll road. Pre-feasibility was completed in May 2026, and request-for-proposal submissions are due to close in November 2026.
- Athi River–Namanga (136 km): to be upgraded to at least dual carriageway; a concept note was approved in September 2026.
- James Gichuru–Rironi: rehabilitation with tolling under a management contract; concept note approved in September 2026.
- Dams and water: Radat, Barsalinga, Lowaat and Soin Koru dams, the Sabaki Water Carrier (Sh27.9 billion, 30-year contract), and Galana-Kulalu irrigation, where the reservoir and canal are described as substantially complete.
- Rail and port: SGR Phase 2B and 2C toward 50 percent completion, plus Mombasa Port and inland container depot projects.
Rail logistics are already moving in that direction. See our report on the Kenya Railways block train from Mombasa to Embakasi.
Why does the Sh5.3 trillion versus Sh5.416 trillion difference matter?
The Sh5.323 trillion figure came from the earlier outline; the Sh5.416 trillion figure is the later draft. Reports using “Sh5.3 trillion” are either citing the earlier version or rounding down. Neither The Star’s free text nor Kenya Today’s report says whether the draft has been tabled in Parliament. The Treasury’s consultation is the live step.
What happens next, and how can the public comment?
The Treasury has invited comments on the draft by November 16, before final decisions on spending priorities and the fiscal framework. The full document is on the Treasury website: Draft 2027 Budget Policy Statement (National Treasury). The final budget goes to Parliament in the usual cycle, which is when county allocations and ministry ceilings are debated.
Related reading on 254.ke: Kenya’s record Sh209 billion spent outside the budget under Article 223, PAYE relief and the Sh32,333 tax-free threshold, and the affordable housing delivery target.
Frequently asked questions
How big is Kenya’s 2027/28 budget?
The latest draft puts total spending at Sh5.416 trillion, up from the Sh5.323 trillion in an earlier outline.
What is the planned deficit?
Sh1.353 trillion, or 5.9 percent of GDP, up from Sh1.321 trillion (5.7 percent) in the earlier outline.
Is recurrent spending above Sh4 trillion?
Yes. The draft sets recurrent spending at Sh4.021 trillion, described as the first time it has passed Sh4 trillion.
When is the deadline for public comments?
November 16, 2026, according to the Treasury’s consultation notice as reported.
Is the budget final?
No. It is a draft Budget Policy Statement; figures can change before Parliament approves the budget.
