Kenya’s economy is set to expand at 5.3 percent in 2026, up from 4.7 percent in 2024, as the government increases development spending and strengthens revenue collection, according to the National Assembly’s Budget and Appropriations Committee.
The committee, chaired by Alego Usonga MP Samuel Atandi, highlighted that growth will be driven by recoveries in key sectors such as construction, tourism, transportation, financial services, and agriculture. Improved macroeconomic stability and stronger sector performance are expected to sustain the expansion.
President William Ruto’s administration has proposed a record budget of KSh 4.74 trillion (approximately US$37.8 billion) for the 2026/2027 financial year, representing an increase of KSh 435 billion (US$3.5 billion) over the 2025/26 budget. The increase is aimed at supporting sectors that drive both economic growth and public service delivery.
Of the projected budget, total revenue is expected to reach KSh 3.588 trillion (US$28.6 billion), equivalent to 17.1 percent of GDP. The committee attributed the revenue growth to improved tax compliance, enhanced administration, and the digitalisation of revenue collection systems under the Kenya Revenue Authority (KRA). “Increasing the KRA’s budget will strengthen tax administration capacity, improve compliance enforcement, and reduce leakages across the tax base,” the committee said.
The government plans to channel the additional expenditure into education, healthcare, infrastructure, agriculture, and national security—sectors seen as crucial for boosting productivity and improving citizen well-being. Affordable housing remains a cornerstone of Kenya’s economic transformation agenda, with investments expected to stimulate construction activity, generate jobs, and create multiplier effects across supply chains.
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The government is also rolling out 47 County Aggregation and Industrial Parks (CAIPs) to promote manufacturing, value addition, and industrial growth at the county level. These parks aim to attract investment, create jobs, and integrate local industries into national and regional supply chains.
Infrastructure development continues to be a top priority, with projects aimed at reducing operating costs, improving connectivity, and enhancing Kenya’s competitiveness as a regional economic hub. Transport and energy infrastructure are key focus areas to support private sector-led growth.
The committee report noted that the expansion of fiscal resources comes amid expectations of higher compliance and improved revenue collection. Digital revenue systems are expected to reduce leakages, while enhanced enforcement of tax obligations will increase government fiscal space.
“The budget is designed to reinforce Kenya’s long-term growth trajectory while ensuring that economic benefits reach citizens,” the report stated. “By investing strategically in productive sectors and strengthening tax administration, the government seeks to sustain macroeconomic stability and promote inclusive development.”
The 2026/2027 budget represents a historic increase for Kenya, signalling the administration’s commitment to ambitious economic and social goals. Analysts expect that the combination of public investment, sector recovery, and improved revenue collection could help Kenya consolidate its position as one of East Africa’s fastest-growing economies.
As the country prepares for the new financial year, attention will focus on the execution of infrastructure projects, performance of the CAIPs, and the effectiveness of revenue mobilisation to ensure the projected growth is realised.
