Kenya Cuts ICT Budget by 32%

Kenya has reduced funding for the digital economy, creative industry and ICT sector by nearly a third in the proposed 2026/27 budget, allocating $66.7 million (KSh8.6 billion) compared to $98.4 million (KSh12.7 billion) in the previous financial year.

The reduction comes despite the government’s continued push to digitise public services, tax administration, procurement systems and revenue collection under a proposed national budget of $37.2 billion (KSh4.8 trillion).

The largest share of the ICT allocation, $33.3 million (KSh4.3 billion), has been earmarked for the Kenya Digital Economy Acceleration Project, a World Bank-backed initiative focused on expanding broadband connectivity, developing digital skills and accelerating the digitisation of government services.

The remaining funding will support cybersecurity initiatives, fibre-optic network expansion, county connectivity projects and the establishment of digital hubs.

The budget documents, however, indicate that the government’s broader digital transformation agenda extends well beyond the ICT ministry allocation. Treasury is investing heavily in digital systems designed to strengthen public finance management, improve transparency and reduce revenue leakages across government.

Beginning July 1, all public procurement is expected to be conducted through the Electronic Government Procurement platform following the removal of procurement exemptions. County governments are also set to join the Treasury Single Account framework, bringing local government payments and requisition processes under a unified digital financial management system.

Treasury has further proposed legal reforms to support electronic signatures, electronic seals and electronic time-stamping services across government operations.

Revenue collection is also undergoing a major digital overhaul. Treasury Cabinet Secretary John Mbadi announced that the Kenya Revenue Authority (KRA) will intensify the use of digital tax administration and revenue monitoring systems from July 1.

The programme includes expanded electronic invoicing, deeper integration of Point of Sale systems, enhanced revenue monitoring tools, upgrades to the Domestic Tax Administration System and the rollout of an e-Customs mobile application.

According to Treasury, the Electronic Tax Invoice Management System (eTIMS) has already onboarded more than 655,000 taxpayers, helping improve transaction visibility and strengthen VAT compliance.

The cut in ICT funding contrasts sharply with allocations to other priority sectors. Education received the largest allocation at $5.17 billion (KSh668 billion), followed by national security at $4.38 billion (KSh566 billion).

Roads and infrastructure have been allocated $1.78 billion (KSh230 billion), while health will receive $1.32 billion (KSh170 billion). Housing and public works were allocated $1.05 billion (KSh135 billion), environment and water $906 million (KSh117 billion), youth, women and equity programmes $844 million (KSh109 billion), and agriculture $488 million (KSh63 billion).

The proposed budget is expected to be financed through projected revenue collections of $27.9 billion (KSh3.6 trillion).

While the reduced ICT allocation may raise concerns among technology stakeholders, the Treasury appears to be shifting its focus toward embedding digital systems across government operations rather than increasing direct spending on the sector itself. The result is a budget where digital transformation remains a central policy objective, even as dedicated ICT funding declines.