Members of Parliament have placed the National Treasury under pressure to justify its Sh4.785 trillion spending plan for the 2026/27 financial year, questioning whether projected revenues, tax reforms and expenditure priorities can withstand rising fiscal demands and a widening budget gap.
Treasury Cabinet Secretary John Mbadi, together with Principal Secretary Chris Kiptoo and Budget and Fiscal Economic Affairs Director General Albert Mwenda, faced the National Assembly Budget and Appropriations Committee chaired by Samuel Atandi as they defended the government’s medium-term fiscal strategy and budget estimates.
The Treasury’s framework shows expected total revenue, including Appropriations-in-Aid (A-I-A), at Sh3.629 trillion against planned spending of Sh4.785 trillion, creating a financing shortfall of Sh1.111 trillion, equal to 5.3 per cent of GDP.
Officials told the committee that the budget is anchored on reforms outlined in the National Tax Policy and the Medium-Term Revenue Strategy, aimed at improving revenue mobilisation and strengthening compliance systems.
“The Budget and Appropriations Committee, chaired by Hon. Samuel Atandi, has engaged the Cabinet Secretary for the National Treasury, Hon. John Mbadi, Treasury PS, Mr. Chris Kiptoo and DG, Budget and Fiscal Economic Affairs, Mr. Albert Mwenda on the FY 2026/27 Budget Estimates and the Medium-Term Fiscal Framework,” read the post in part.
MPs expressed doubts over the realism of revenue forecasts and raised concerns about gaps in tax collection systems. David Ochieng highlighted weaknesses in county own-source revenue, saying poor enforcement and weak coordination continue to cost the government significant income.
In response, Mbadi said reforms are ongoing at the Kenya Revenue Authority to strengthen collection systems and close loopholes. He pointed to digital tax upgrades, expansion of non-tax revenue collection, restructuring of land rent systems, introduction of instant fines and enhanced enforcement measures aimed at widening the tax base.
Health funding sparked debate, with lawmakers focusing on the Social Health Authority (SHA), especially enrolment numbers and benefit usage.
Atandi and John Chikati sought clarity on how the scheme is functioning and who is benefiting from it.
Mbadi told the committee that SHA has enrolled more than 27 million Kenyans, with about 5 million active contributors, including 4 million payroll contributors and up to 1 million voluntary contributors. He noted that detailed beneficiary records are maintained by the SHA Board and the Ministry of Health.
Education financing also came under scrutiny, with MPs raising concerns over delayed exchequer releases, outstanding bills and capitation for schools.
The Treasury acknowledged the delays but said steps are underway to clear arrears owed to counties, NG-CDF and NGAAF. It also confirmed plans to recruit 24,000 intern teachers.
On procurement and fiscal control systems, MPs questioned the rollout of the Electronic Government Procurement platform and progress on the Single Treasury Account.
Mbadi said most ministries and agencies have already joined the EGP system, while further work is ongoing to strengthen cash management and integrate county revenue systems through the Intergovernmental Budget and Economic Council.
The Treasury maintained that the budget aligns with the Bottom-Up Economic Transformation Agenda (BETA), focusing on agriculture, MSMEs, housing, digital economy and healthcare.
Key targets include construction of more than 214,000 affordable housing units, issuance of over one million title deeds, expansion of 80,000 kilometres of fibre optic infrastructure, establishment of 404 digital hubs and training of 1.5 million youth under the Ajira programme.
Mbadi projected that the economy will grow by 5.0 per cent in 2026 despite global economic pressures, citing Public-Private Partnership projects such as the Nairobi Expressway, Galana Kulalu and Menengai geothermal development as part of efforts to ease fiscal pressure.
The Budget and Appropriations Committee is expected to table its report on the budget estimates in Parliament next week.