The Cabinet has approved a sweeping package of reforms and funding decisions that will shape Kenya’s fiscal, education, infrastructure, and governance landscape ahead of the 2026/27 financial year.
Chaired at State House, the meeting endorsed payroll integrity reforms, drought response funding, a KSh4.7 trillion Budget Policy Statement, major education overhaul Bills, financing for Mwache Dam, and updates to the Devolved Government Policy.
Here is a breakdown of what the decisions mean.
KSh4.7 trillion budget for 2026/27
Cabinet approved the Budget Policy Statement for the 2026/27 financial year, setting total government expenditure at KSh4.7 trillion.
The budget prioritises investments in education, health, energy, infrastructure, agriculture, social protection, and national security. It also advances reforms in public finance management, digitisation, State-owned enterprises, and public-private partnerships.
The Budget Policy Statement, the fourth under the Kenya Kwanza Administration, will now be submitted to Parliament to guide the Government’s fiscal strategy.
Major payroll reforms after HRIS-K audit
Cabinet approved sweeping payroll reforms following an audit that exposed significant integrity and cybersecurity weaknesses in the Human Resource Information System for Government (HRIS-K).
The reforms include mandatory security certification for government payroll systems, forensic audits to identify irregularities, and enforcement of strict statutory deductions at source.
The measures are intended to seal revenue leakages, eliminate ghost workers, strengthen data protection, and restore public confidence in government payroll management.
KSh4.1 Billion drought response boost
In response to ongoing climate pressures, Cabinet authorised KSh4.1 billion for drought mitigation and emergency interventions.
The funding will support water access, livestock protection, food relief, and resilience-building programmes in affected counties. The move underscores the government’s commitment to protecting vulnerable communities and strengthening climate preparedness.
Mwache dam gets $128 Million financing
Cabinet approved $128 million (approximately KSh16.5 billion) to support completion of the Mwache Dam project in Kwale County.
The dam is expected to boost water supply for households and industries in the Coast region, enhance irrigation, and strengthen long-term water security. The project is seen as critical to unlocking economic growth in the region.
Sweeping education reform bills approved
Cabinet considered, adopted, and forwarded to Parliament a comprehensive package of education reform Bills aimed at aligning Kenya’s education system with the Constitution and the Competency-Based Education and Training framework.
At the tertiary level, the Tertiary Education Placement and Funding Bill, 2024 proposes consolidating HELB, the Universities Fund, the TVET Funding Board, and KUCCPS into a single authority. The move is designed to streamline student placement, loans, scholarships, and career guidance.
The Kenya National Qualifications Framework (Amendment) Bill, 2024 clarifies the mandate of the Kenya National Qualifications Authority by limiting it to setting national qualification standards, while leaving accreditation and equivalence to respective regulators.
The Basic Education Bill, 2024 aligns governance structures with the Competency-Based Education model, strengthens quality assurance, and introduces coordinated administration of bursaries and scholarships.
Cabinet also endorsed the Kenya National Educational Assessments Bill, 2025, which replaces the examination-centric model with competency-based assessments, and the Kenya Institute of Curriculum Development (Amendment) Bill, 2024 to eliminate institutional overlaps.
Teacher preparation will be strengthened under the Pre-Service Education and In-Service Training in Basic Education Bill, 2025, while the Education Administrative Tribunal Bill, 2024 establishes a formal mechanism for resolving education-related disputes.
Separately, Cabinet authorised Phase III of the Kenya-China Project to equip 70 Technical and Vocational Education and Training colleges with modern equipment. The programme will cover eight priority disciplines and train 1,190 instructors to support full rollout of Competency-Based Education and Training.
Devolution policy update
Cabinet also approved updates to the Devolved Government Policy framework aimed at improving coordination between national and county governments.
The revised policy seeks to eliminate duplication, clarify roles, strengthen intergovernmental relations, and enhance service delivery at the grassroots level.
