Welcome to this week in policy; If you thought this week was quiet, Kenya was quietly redesigning its financial future.

Welcome to the beginning of the 2026/27 budget season sparked by the tabling of the Budget Policy Statement 2026/27. The government is planning a KSh 4.7 trillion budget, with projected revenue at about KSh 3.5 trillion. That gap? That’s the real story. (Parliamentary submissions opened this week for public participation.)

The country is once again balancing ambition against arithmetic.

VAT: The Silent Percentage That Changes Everything

Budget experts appearing before Parliament proposed raising VAT from 16% to 18% to raise an estimated KSh 87 billion. Two percent sounds polite. But VAT lives everywhere groceries, transport, airtime. When it shifts, the economy feels it quietly.

Policy lesson: not all tax increases come with dramatic headlines. Some come as decimals.

Eurobond Season Returns

Kenya re-entered international markets and raised about $2.25 billion (approx. KSh 290 billion) through a new Eurobond issuance. Much of this will refinance older debt and support budget obligations.

We are officially in what economists call debt management. In everyday language? Debt recycling.

Universities in a Funding Crunch

Public universities are reportedly facing a funding shortfall estimated at KSh 260 billion, placing pressure on the new student-centered funding model.

Meanwhile, the government signaled plans to hire 16,000 teachers expanding the system while the financing model strains.Education policy right now is both expansion and instability, co-existing.

Privatization Signals: Safaricom Debate

Parliament concluded public hearings on a proposal to reduce the government’s stake in Safaricom. Safaricom is not just a telecom company it is a major contributor to government revenue and digital infrastructure.

Selling stakes in state assets is rarely accidental. It’s fiscal strategy.

Kenya Steps Into AI Sovereignty

Kenya joined India and Italy in a partnership to develop sovereign AI systems for Africa a move tied to digital economy and technological independence debates.

In a world where data is currency, AI policy is economic policy.

So What Really Happened This Week?

Kenya signaled a transition. More borrowing. Possible higher consumption taxes. Asset restructuring. Education strain. Digital sovereignty ambitions.

It’s giving development under fiscal pressure. And here’s the quiet truth: By the time the Finance Bill trends in June, the direction will already have been shaped in February committee rooms.

Policy isn’t boring. It’s just happening before you’re paying attention.

See you next week same time same place.