S&P Global Warns of Widening Fiscal Deficit Amid 2027 Election Spending in Kenya
S&P Global forecasts Kenya’s 2027 fiscal deficit could widen to 7.1% of GDP due to election costs, revenue shortfalls, and high interest payments.
By John Mtongoi Newsroom
August 24, 2026
2 min read
The upcoming 2027 General Election in Kenya is projected to significantly impact the country's fiscal health, with S&P Global Ratings highlighting increased election spending as a key factor in a widening budget deficit.
S&P Global, a US-based credit rating agency, forecasts Kenya’s fiscal deficit to rise to 7.1 percent of GDP in the 2027 fiscal year. This figure surpasses the National Treasury’s target of 5.5 percent and reflects ongoing challenges including revenue shortfalls, elevated interest costs, election-related expenditures, and extraordinary spending linked to the Middle East conflict.
Election Costs and Funding Gaps
The Independent Electoral and Boundaries Commission (IEBC) estimates the total cost of running the 2027 election to be between KSh 62 billion and KSh 64 billion. However, initial government allocations stood at approximately KSh 41 billion, creating a funding shortfall nearing KSh 23 billion.
Following this, the IEBC requested an increased budget of KSh 74.8 billion, leading Parliament to approve an additional KSh 33 billion for election preparations. The commission attributes the higher costs to factors such as a growing voter population, more polling stations, voter registration drives, civic education, logistical needs, and the replacement of election technology.
Controversy Over Election Technology Spending
A contentious element of the budget is the procurement of new Kenya Integrated Election Management System (KIEMS) kits, with about KSh 9.3 billion allocated for this purpose. This raises the election technology budget to over KSh 10 billion. Lawmakers have questioned the necessity of replacing thousands of existing kits and have called for technical justifications to support this expenditure.
Balancing Fiscal Discipline and Election Needs
The IEBC has cautioned that insufficient funding could jeopardize critical election activities, including voter education, registration, procurement, and staff training. Meanwhile, the government faces pressure to reduce borrowing and control debt servicing costs amid limited revenue growth and public resistance to tax increases.
S&P Global affirmed Kenya’s B/B foreign and local currency sovereign ratings with a stable outlook, indicating some fiscal buffers remain despite the challenges. However, the agency’s forecast underscores the difficulty in achieving fiscal consolidation ahead of the elections.
President William Ruto’s administration must navigate a complex fiscal environment, balancing the need to finance development programs and election preparations while managing the risk of a growing budget deficit and borrowing pressures.
