Kenya targets 3.8% budget deficit for FY ’25/’26

Kenya will target a budget deficit of 3.8 per cent of GDP in the FY 25/26, a senior official from the Ministry of Finance confirmed on Wednesday.

The East African country has faced challenges in financing its budget in recent years, largely due to increasing debt service costs and sluggish government revenue growth.

Musa Kathanje, Director of the Macroeconomics and Fiscal Affairs Department at the Ministry of Finance, revealed that the government plans to impose a borrowing ceiling of 759 billion shillings ($5.88 billion) for the next financial year during a budget preparation event.

This fiscal target marks a decrease from the current financial year’s budget deficit, which stands at 4.3 per cent of GDP. The government had to revise this year’s deficit upwards following violent protests that led President William Ruto to abandon proposed tax hikes.

Attribution: Reuters

Subediting: M. S. Salama