Okoa Uchumi Coalition Raises Red Flags Over Ballooning Budget, Rising Taxes and Mounting Debt

taifa news 

business  edition 

m David 

Kenya’s proposed KSh 4.82 trillion budget for the 2026/27 financial year has triggered fresh debate over the country’s economic direction, with the Okoa Uchumi Campaign Coalition warning that rising public spending, growing debt, and new tax measures could deepen pressure on households and businesses already struggling with the high cost of living.

Speaking during a press conference on Thursday, coalition representatives led by Diana Gichengo argued that the government is pursuing an unsustainable economic path marked by increased borrowing, aggressive taxation, and shrinking investment in essential public services.

At the centre of the concerns is the proposed KSh 4.82 trillion budget, which exceeds the ceiling set in the 2026 Budget Policy Statement by KSh 69.3 billion. According to the coalition, the spending plan reflects a widening gap between government expenditure and the country’s actual revenue capacity.

The coalition noted that the government expects to raise KSh 2.986 trillion through taxes while borrowing more than KSh 1.1 trillion to finance the deficit. Of the projected borrowing, KSh 995.7 billion is expected to come from domestic markets.

Economists have long warned that heavy domestic borrowing can reduce credit available to the private sector, limiting expansion opportunities for businesses and slowing job creation.

“The government’s growing dependence on domestic borrowing risks crowding out businesses and weakening economic productivity,” Gichengo said during the briefing.

Treasury figures cited by the coalition show Kenya’s public debt has now reached KSh 12.84 trillion, with domestic debt crossing the KSh 7 trillion mark for the first time in the country’s history. The coalition warned that debt levels are rapidly approaching KSh 14 trillion.

Finance Bill 2026 and the Tax Burden

The Draft Finance Bill 2026 has emerged as another major source of concern among civil society groups and sections of the business community.

The coalition argues that the proposed measures could increase the financial burden on households at a time when inflationary pressures, fuel costs, electricity bills, and unemployment remain high.

One of the most contested proposals is the planned increase in excise duty on mobile phones from 10 percent to 25 percent.

According to the coalition, the move could make smartphones less affordable for low-income earners, students, and small businesses that increasingly depend on digital platforms for communication, learning, and trade.

“The proposal contradicts the government’s digital inclusion agenda and risks excluding vulnerable groups from the digital economy,” Gichengo stated.

The coalition also criticized provisions it says would expand the powers of the Kenya Revenue Authority (KRA), particularly clauses touching on data access and tax enforcement.

Energy Costs and Household Pressure

Beyond taxation, the coalition linked the proposed budget to the rising cost of energy and basic living expenses.

The group criticized the Government-to-Government (G-to-G) fuel importation framework, alleging that it has distorted competition within the petroleum sector and exposed consumers to higher prices and substandard fuel products.

The coalition also faulted the recent electricity tariff increase by the Energy and Petroleum Regulatory Authority (EPRA), saying households are increasingly absorbing the cost of fuel, forex fluctuations, and power purchase charges.

Combined with rising food prices and transport costs, the coalition warned that the pressure on household incomes could intensify poverty and inequality.

Declining Public Services

Even as taxes and statutory deductions continue to rise, the coalition argued that public services are deteriorating.

It pointed to challenges facing the Social Health Authority (SHA), allegations of fraudulent medical claims, shortages at Kenya Medical Supplies Authority (KEMSA), and delayed school capitation as signs of growing inefficiencies within government systems.

According to the coalition, the situation reflects a broader economic contradiction where citizens are paying more to the state while receiving fewer quality public services in return.

Calls for Fiscal Restraint

The coalition is now urging Parliament to reduce the proposed KSh 4.82 trillion budget and align government expenditure with realistic revenue expectations.

It also called for debt restructuring, tighter controls on corruption, and prioritization of spending toward healthcare, education, and economic productivity.

“We must cut our cloth according to our size,” Gichengo said, warning that failure to address the country’s fiscal trajectory could worsen unemployment, social inequality, and economic instability in the coming years.