The Kenya Kwanza administration’s fiscal outlook for the coming year faces significant risks from what the Parliamentary Budget Office (PBO) terms as “overly optimistic” revenue targets, an increased dependence on domestic borrowing that could squeeze private sector credit, and persistent growth in mandatory spending.

In its latest Budget Watch report, the independent PBO, which advises lawmakers, expressed serious doubts about President William Ruto government’s ability to meet its ambitious revenue collection goal. The office warned that consistent revenue shortfalls and a narrow, overburdened tax base could threaten the credibility and sustainability of the national budget.