The Budget and Appropriations Committee has proposed a national government spending ceiling of Ksh. 2.878 trillion for the 2026/27 financial year under the Budget Policy Statement (BPS).

The proposed allocation includes Ksh. 2.797 trillion for the Executive, Ksh. 50.7 billion for Parliament, Ksh. 30.4 billion for the Judiciary and Ksh. 9 billion for the Office of the Auditor-General. The committee also recommended an equitable share allocation of Ksh. 420 billion to county governments and Ksh. 9.6 billion for the Equalization Fund.

In addition, counties are set to receive Ksh. 75.69 billion in additional allocations.

“Hon. Members, the committee also recommends that the County Government Additional Allocations be approved at Ksh. 75.69 billion as per the Fourth Schedule, which shall form the basis for the County Government Additional Allocation Bill, 2026,” said Budget and Appropriations Committee Chairperson Hon. Samuel Atandi while moving the motion on Thursday, March 5, 2026.

Total revenue, including Appropriation-in-Aid for FY 2026/27 are projected at Ksh. 3.588 trillion, equivalent to 17.1% of the Gross Domestic Product (GDP). The revenue outlook is underpinned by ongoing tax administration reforms.

Total expenditure and net lending are projected at Ksh. 4.737 trillion, an increase of Ksh. 437.5 billion from the FY 2025/26 approved Budget Estimates of Ksh. 4.302 trillion.

Hon. Atandi noted that the 2026 BPS prioritizes key sectors to sustain economic growth, with GDP projected to grow to 5.3 percent in the next financial year. He said the budget will also support agriculture and facilitate the settlement of pending bills.

Vice-Chairperson Hon. (Dr) Robert Pukose while seconding, urged Ministries, Departments and Agencies (MDAs) to prioritize the clearance of pending bills to enhance money circulation in the economy.

Meanwhile, Leader of the Majority Party Hon. Kimani Ichung’wah supported the Committee's recommendation for the National Treasury to rationalize, merge or dissolve non-viable State-Owned Enterprises by October 2026 to reduce the fiscal deficit.

Kilifi North MP Hon. Owen Baya Members questioned the effectiveness of the Equalization Fund and its impact on development in marginalized regions.

Responding to the concerns, Hon. Atandi said the committee had recommended a review of the Equalization Fund distribution formula by the Commission on Revenue Allocation.

He also acknowledged concerns over the rising public debt, noting that debt servicing costs are projected to reach about Ksh. 1.1 trillion this financial year.

The House is expected to vote on the motion during the next sitting on Tuesday, after which the report will be transmitted to the Senate for concurrence.