The Kenya Kwanza government promised to activate budget neutrality.
The Kenya Kwanza/BETA approach was to make budget neutrality a guiding principle—new programmes would generally be financed by reallocating money from completed or discontinued programmes rather than increasing overall expenditure or relying heavily on additional borrowing.
A deficit of 5.7% in the gross domestic product (GDP) was already recorded as per the reporting of the 2024/25 Budget Policy.
In 2026, the government has established the National Infrastructure Investment Fund via the The National Infrastructure Investment Fund Act, 2026, to finance and accelerate major national infrastructure projects while reducing the government’s reliance on public borrowing. Under Section 4, the Fund is intended to mobilise private and alternative sources of capital, reduce public-debt financing for commercially viable infrastructure, and strengthen Kenya’s capacity to develop and manage large, complex projects. The Fund is expected to receive approximately KSh340 billion in seed capital, mainly from proceeds of government asset divestiture, including the planned reduction of state holdings in Kenya Pipeline Company and Safaricom.
Kenya still continues to operate with substantial budget deficits rather than a neutral/balanced budget. For FY2026/27, the government projects expenditure of about KSh4.82 trillion against revenue and grants of about KSh3.67 trillion, leaving a KSh1.146 trillion deficit, equivalent to 5.5 per cent of GDP.
As of August 2026, Kenya is still planning additional borrowing, including possible Panda and Eurobonds, while dealing with high debt-servicing costs.
