Debt payments took KSh490bn in first quarter, close to 78% of tax collected

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The government spent KSh490.5 billion on public debt in the first three months of the 2026/27 financial year, equal to about 78 per cent of the KSh631.8 billion it collected in tax over the same period.

The figures come from the National Treasury’s statement of actual revenues and net Exchequer issues to September 30, published as Gazette Notice No. 16420 in the Kenya Gazette of October 16. The statement’s heading reads “as at 30th October”, but the closing Exchequer balance in the table is dated September 30, 2026.

Revenue behind the pace

Tax revenue of KSh631.8 billion is 22.1 per cent of the KSh2.859 trillion budgeted for the year. A straight-line pace would have put the Treasury at 25 per cent after one quarter. Non-tax revenue came in at KSh24.4 billion, or 19.2 per cent of its KSh127.1 billion estimate.

The gap is in line with Treasury data released earlier this month, which showed the Kenya Revenue Authority missed its first-quarter target by KSh58.2 billion.

External loans and grants were slow, at KSh58 billion against KSh612.3 billion expected for the year, or 9.5 per cent. Domestic borrowing filled the gap. The Treasury raised KSh565.6 billion at home, 36.1 per cent of the full-year figure of KSh1.568 trillion. That annual figure includes KSh648.8 billion of maturing domestic debt the State expects to roll over, with the rest, KSh919.4 billion, being net new borrowing.

Including the KSh29.2 billion opening balance on July 1, total receipts reached KSh1.31 trillion.

Where the money went

Consolidated Fund Services, which are charged directly to the Consolidated Fund without a yearly vote, took KSh532.5 billion. Public debt accounted for KSh490.5 billion of that, and pensions and gratuities KSh39.7 billion. The debt figure covers interest and principal repayments, and is 21.2 per cent of the KSh2.316 trillion set aside for the year.

Ministries, departments and agencies received KSh427.2 billion for recurrent spending, about a quarter of their KSh1.714 trillion allocation. The Teachers Service Commission was the largest single vote at KSh104.8 billion, followed by the Ministry of Defence at KSh60.1 billion and the State Department for Higher Education and Research at KSh43.1 billion.

Development spending reached KSh104.5 billion, or 22.1 per cent of the KSh473 billion budget. The State Department for Roads got KSh14.2 billion of its KSh74.9 billion allocation. The State Department for Housing and Urban Development received KSh1 billion out of KSh21.9 billion, or 4.6 per cent, while Devolution got KSh44 million against a KSh10.5 billion development budget.

One development vote ran far ahead. The State Department for Internal Security and National Administration had received KSh9.1 billion of its KSh9.8 billion development allocation, or 92.5 per cent, in three months.

Counties

Counties received KSh96.3 billion of their KSh428 billion equitable share, or 22.5 per cent. The Treasury notes that a separate County Governments Additional Allocations Bill, 2026, which would give counties a further KSh75.7 billion through national ministries, is still before Parliament. The breakdown of the main allocations is in our guide to county allocations for 2026/27.

In total, KSh1.16 trillion was released to the national government and counties, leaving an Exchequer balance of KSh150 billion at the end of September.

Why the ratio matters

Tax and non-tax revenue together came to KSh656.2 billion in the quarter. After KSh490.5 billion in debt payments, about KSh165.7 billion was left, against KSh628 billion released to ministries for recurrent and development spending and to counties. The difference was covered by borrowing and the opening balance, and new borrowing adds to future interest costs.

The Treasury’s next quarterly statement, for October to December, will show whether revenue catches up with the budget.