The National Treasury Cabinet Secretary, John Mbadi, is expected to present the mini budget in November, taking into account recently approved expenditures by the Cabinet. These include the settlement of pending bills below Sh50 million and increased overall spending for the financial year ending June 30, 2027. The mini budget will address the growing spending pressures and revenue underperformance.
The National Treasury Principal Secretary, Chris Kiptoo, informed the Finance and National Planning Committee of the National Assembly that the supplementary budget will make submissions on clearing most of the pending bills. The Cabinet had approved the settlement of pending bills of Sh50 million and below, prioritizing payments to micro, small, and medium enterprises to ease cash-flow pressures and protect jobs.
The mini budget plans come amid a tightened fiscal position, with Kenya's budget deficit projected at 5.5 percent of GDP or Sh1.14 trillion for the 2026/27 fiscal year. The deficit is expected to rise to 5.9 percent in 2027/28. Currently, spending for the fiscal year to June 2027 is estimated at Sh4.81 trillion against Sh3.63 trillion in projected revenues.
The National Treasury has cleared pending bills estimated at Sh80 billion in the roads sector through the securitization of the road maintenance levy fund. The fund is supported by a Sh25 charge on every liter of petrol and diesel sold. The Treasury has noted heightened demands for funding from various ministries and State departments, even as revenue underperforms.
The Cabinet approved a Sh45.5 billion ($350 million) shareholder financing for Kenya Airways to meet urgent financial obligations, including aircraft maintenance and returning grounded planes to service. The Cabinet also proposed converting Sh122 billion in existing government loans to equity to strengthen Kenya Airways' balance sheet and support future capital raising.
The Kenya Revenue Authority recorded a Sh58.2 billion revenue shortfall in the first quarter of the current fiscal year, despite ordinary revenue growth accelerating from the same period last year. Ordinary revenue receipts were recorded at Sh655.8 billion, a 14.4 percent increase from Sh573.5 billion collected in the same period in 2025.
Total revenues are expected to reach Sh3.63 trillion by June next year, including Sh2.985 trillion in ordinary revenues collected by the Kenya Revenue Authority and Sh644.8 billion in ministerial appropriations in aid. The new supplementary estimates will factor in changes in revenue expectations by the National Treasury.
Key points
- The National Treasury will table its first supplementary budget for the 2026/27 financial year in November.
- The budget will address spending pressures and revenue underperformance.
- The Cabinet approved a Sh45.5 billion shareholder financing for Kenya Airways.
