NAIROBI, Kenya- Kenya’s economic outlook remains steady as the government outlines an ambitious budget framework aimed at strengthening growth, creating jobs and improving public services across the country.
According to highlights presented by the National Assembly’s Budget and Appropriations Committee, the government is prioritising investments that stimulate productivity while maintaining fiscal discipline.
The economy of Kenya is projected to expand to 5.3 percent in 2026, an improvement from 4.7 percent recorded in 2024.
The projected growth is supported by improving macroeconomic stability and strong performance in sectors such as agriculture, construction, tourism, transport and financial services.
Government revenue collection is also expected to increase significantly. Revenue for the 2026/27 financial year is projected to reach Sh3.588 trillion, equivalent to 17.1 percent of GDP.
Officials say reforms in tax administration, improved compliance systems and the digitalisation of revenue collection are helping strengthen the country’s fiscal capacity.
At the same time, government expenditure is expected to rise to Sh4.74 trillion, representing an increase of more than Sh435 billion from the previous fiscal year.
Much of this spending will be directed toward sectors that directly affect citizens, including education, healthcare, agriculture, infrastructure and national security.
The government also continues to place strong emphasis on the Affordable Housing Programme, which remains a key pillar of the country’s economic transformation strategy.
Beyond addressing the national housing shortage, the programme has been generating employment in construction and supporting businesses involved in building materials, logistics and related services.
Manufacturing and value addition are also receiving attention through the rollout of 47 County Aggregation and Industrial Parks (CAIPs) across the country.
These parks are designed to promote agro-processing, reduce post-harvest losses and create employment opportunities closer to agricultural production zones.
Infrastructure investment remains central to the government’s development agenda.
Continued spending on roads, electricity, irrigation systems and logistics networks is expected to improve connectivity, reduce the cost of doing business and strengthen Kenya’s position as a regional economic hub.
Energy development is another major focus. Kenya plans to expand its electricity generation capacity by 10,000 megawatts, largely from renewable sources such as geothermal, solar, wind and hydropower.
The expansion aims to support industrial growth and ensure reliable power supply for businesses and households.
Meanwhile, inflation has remained relatively stable at around 5 percent, staying within the target range set by the Central Bank of Kenya.
Stable prices help protect household purchasing power while creating a predictable environment for investors.
The government is also maintaining support for small businesses through financing programmes such as the Hustler Fund, which aims to improve access to credit for entrepreneurs and grassroots enterprises.
Overall, the budget framework reflects a balancing act between expanding development spending and maintaining fiscal discipline, with the government targeting a fiscal deficit of 5.3 percent of GDP as it works toward long-term economic stability.
