A wave of increased government spending has been approved by Parliament, reshaping the national budget and directing a large share of the additional funds to security agencies, even as other sectors face reductions and the fiscal gap continues to widen.
The National Assembly on Thursday passed the Supplementary Appropriation Bill, raising overall expenditure and channeling significant new allocations to the Kenya Defence Forces, the National Police Service and the National Intelligence Service, alongside other government departments and agencies.
A review of the revised estimates shows that national security institutions were among the biggest beneficiaries, receiving a substantial portion of the added funding across defence, policing and intelligence operations.
The National Intelligence Service recorded one of the highest increases after its allocation rose by Sh10 billion, moving from Sh51.4 billion to Sh61.4 billion. The adjustment reflects close to a 20 per cent rise in funding for an agency whose operations remain largely outside public view.
The Ministry of Defence also received a notable increase of Sh24.4 billion, mainly directed towards salary-related obligations, pushing its total budget to Sh226 billion. The Budget and Appropriations Committee, chaired by Alego Usonga MP Samuel Atandi, indicated that the increment is intended to support stronger defence capacity.
The National Police Service was allocated an additional Sh7.5 billion to support operational needs, including insurance for officers, bringing its total allocation to Sh135 billion.
The Internal Security and National Administration department received Sh3 billion to cater for personnel expenses and ongoing security operations. This came alongside Sh5.5 billion that had earlier been released under emergency provisions to support security-related activities.
In total, the defence and security sector absorbed close to Sh50 billion in additional funding, placing it ahead of combined increases in other key areas such as health and agriculture. The sector’s total allocation now stands at Sh515 billion, far above the health budget at Sh164 billion and still below the education budget of Sh752 billion.
Beyond the security sector, Parliament approved additional funding for several State offices. These include Sh8 billion for State House, Sh2 billion for the Deputy President’s office and Sh6.9 billion for Immigration Services.
Other institutions that benefited include the Independent Electoral and Boundaries Commission, which received Sh3.7 billion, raising its total budget to Sh13 billion. The Office of the Director of Public Prosecutions was allocated Sh1.4 billion, while the National Land Commission received Sh2.7 billion.
The timing of the increased allocations aligns with early preparations for the 2027 General Election, with expectations of heightened political activity. The higher funding points to efforts to strengthen intelligence gathering, policing capacity and internal security readiness ahead of that period.
At the same time, the revised budget has led to reductions in other areas, particularly oversight bodies and development programmes.
The Kenya National Commission on Human Rights had its allocation reduced by Sh9 million, while the Witness Protection Agency lost Sh50 million.
Development spending also faced deeper cuts, especially in programmes supported by external funding. ICT infrastructure projects were reduced by Sh4 billion, water and sanitation programmes by Sh3.9 billion, and energy sector initiatives by Sh3.5 billion.
The Energy Committee raised concerns over the reduction in funding, warning that the cuts could slow down transmission projects and affect progress toward national connectivity goals.
In contrast, the forestry sector recorded gains, with the State Department for Forestry receiving an additional Sh2.16 billion for recurrent expenditure and Sh2.85 billion for development activities. The funding supports ongoing tree planting and environmental restoration efforts.
However, lawmakers proposed shifting Sh460 million from tree planting to forest access roads and fencing of the Mau forest, arguing that protection and maintenance of restored areas should take priority.
Education emerged as the largest beneficiary outside the security sector, receiving an additional Sh43.5 billion.
The Teachers Service Commission was allocated Sh21.2 billion to address salary shortfalls and statutory contributions. The Higher Education department received Sh15.4 billion, supporting institutions such as the Higher Education Loans Board, the University Funding Board and Moi University, which received Sh1 billion.
Additional allocations included Sh100 million for the Garissa University library and Sh300 million for infrastructure improvements at Koitalel Samoei University.
Agriculture received Sh17.8 billion, largely driven by Sh10 billion for the fertiliser subsidy programme and Sh7.8 billion for reforms in the sugar sector.
The health sector was allocated an extra Sh16 billion, though lawmakers expressed concern over ongoing challenges, including repeated budget cuts and delays in reimbursements under the Social Health Authority. These issues, they noted, continue to strain service delivery and financial obligations within the sector.
The Supplementary Appropriation Bill raises total government expenditure from Sh4.30 trillion to Sh4.62 trillion, widening the fiscal deficit at a time when revenue performance has weakened.
Tax collections have fallen short by Sh155 billion, pushing the deficit to Sh1.186 trillion, up from Sh933 billion in earlier estimates. This shortfall has forced the National Treasury to increase borrowing to finance government operations.
Of the Sh1.15 trillion in new borrowing, Sh924 billion will be sourced from the domestic market, with the remainder expected from external lenders.
“The increased reliance on domestic borrowing to finance the widened deficit raises important macro-fiscal concerns,” the committee led by Samuel Atandi said in its report.
“Elevated domestic borrowing may exert pressure on local financial markets and crowd out private-sector access to credit.”
“This would thereby constrain investment, dampening economic activity and potentially increasing borrowing costs in the medium term.”
Lawmakers also raised questions over the use of emergency spending provisions, even as they approved the supplementary budget. Out of Sh245.9 billion spent without prior approval, Sh185.8 billion had already been disbursed.
One of the highlighted expenditures was Sh144.4 billion used to buy back government bonds, which MPs said did not meet the threshold of an unforeseen emergency.
The Budget Committee observed that some of the spending could have been planned within the original budget or deferred to a later financial period.
Revenue performance also drew scrutiny, with MPs questioning the efficiency of the tax authority.
Majority Leader and Kikuyu MP Kimani Ichung’wah attributed the shortfall to inefficiencies within the revenue collection system.
“We have a revenue authority that is either lazy or riddled with corruption, where people are collecting bribes instead of collecting revenue, or because we have an inefficient system,” Ichung’wah said.
By February 2026, total revenue collection stood at Sh1.98 trillion, missing targets by Sh155.2 billion. Income tax, value-added tax and excise duty all recorded shortfalls.
Finance Committee chair Kuria Kimani said, “Only 20 per cent of Kenyans pay 80 per cent of our taxes.”
“What we are telling the revenue authority is that we cannot continue to burden this group. To achieve a fairer system, they must digitise their operations,” he said.
The Treasury has revised its revenue projection slightly upward to Sh2.784 trillion, but the increase remains small compared to the rise in expenditure.
Officials now expect the fiscal deficit to exceed six per cent of gross domestic product, pointing to continued pressure on public finances.
Kitui Central MP Makali Mulu also questioned the projections, saying, “As at the end of February, we were short of revenue by Sh150 billion, hence we are expected to collect the total expected amount plus the additional Sh29 billion. As of now, we are negative by Sh150 billion. The question is: how realistic are these figures?”