Kenya’s proposed Budget for the 2026/2027 financial year has been unveiled as a delicate fiscal balancing act, with Treasury Cabinet Secretary John Mbadi prioritising social protection, education funding, and youth programmes while attempting to manage a widening Sh1.1 trillion deficit.
Presented through a detailed breakdown highlighted by Daily Nation, the budget outlines significant allocations aimed at cushioning vulnerable groups and sustaining key government services, even as fiscal pressures mount.
Education remains a major winner, with Sh92.5 billion allocated for free primary and secondary school capitation. A further Sh68 billion has been set aside to clear pending payments owed to suppliers, while Sh8.2 billion will support intern teachers.
The government has also earmarked Sh4.9 billion for the permanent employment of 20,000 intern teachers, signaling continued pressure to absorb the growing pool of trained educators.
Social protection programmes also receive a boost. Sh33.5 billion has been allocated for cash transfers targeting the elderly, orphans, and vulnerable children.
In addition, Sh18 billion will go towards the fertiliser subsidy programme, aimed at reducing production costs for farmers and improving food security.
Youth-focused initiatives feature prominently, with Sh4.9 billion allocated to the NYOTA programme.
Other allocations include Sh9.4 billion to settle landless claims and Sh1.1 billion for rural financial inclusion, reflecting government efforts to stimulate grassroots economic activity.
On the revenue side, the budget introduces mixed tax measures viewed as creating both “winners and losers.”
Winners include exemptions on VAT for aircraft and spare parts, dialysis equipment, and the removal of excise duty on bottled water.
The excise duty on extra neutral alcohol has also been reduced from Sh500 to Sh80 per litre.
However, new burdens have been introduced in other areas. VAT on second-hand clothing (mtumba) imports will now be charged at importation, while a 25 per cent excise duty on mobile phones will apply at activation.
Select processed agricultural imports face a 35 per cent customs duty, and a 20 per cent withholding tax on lottery winnings has also been introduced.
With political and economic pressures rising ahead of the next election cycle, the budget reflects an attempt to strike a balance between fiscal consolidation and public appeasement.