By Billy Mijungu
Kenya’s economic growth trajectory in 2026 will largely depend on the discipline the Government adopts and push austerity measures to a new and more deliberate level as a strategic reset of how public resources are deployed.
Government spending on travel, must be reoriented. International travel should be reduced to strict necessity, while local travel must be tightly controlled. Excessive travel allowances and non essential movements have become a drain on public finances. Redirecting funds toward productive sectors yields far greater economic returns.
The State must develop a clear strategy to significantly reduce reliance on privately owned property leases. Many leases have become loopholes for pilferage and rent seeking. Where possible, government agencies should lease space from government owned entities, or leverage the Housing Fund to develop and allocate office space to deserving agencies not only cut costs but also bring long term value to public assets.
Critical is the management of government fuel and oil cards, one of the most abused areas of public expenditure. Without strict controls, real time monitoring, and accountability, daily leakage of resources continues unchecked. Tightening fuel management systems would immediately save billions and improve operational efficiency.
Local travel costs also demand scrutiny. Kenya has reached a point where every senior official seems to require helicopter transport for routine engagements. This culture of excess must end. Road and rail transport should be prioritized where feasible, reserving air travel for genuine emergencies or strategic needs.
Beyond austerity, the national budget must adopt a more social and productive outlook rather than an overly capitalistic one. Energy costs remain a major bottleneck to growth. The Government should expand electricity subsidies to drive down production costs. Targeting power prices to just a few cents per kilowatt hour would stimulate manufacturing, encourage investment, reduce the cost of goods, and make Kenya more competitive. Affordable fuel and cooking gas are equally essential to lowering the cost of living.
Finally, county aggregation and industrial centres must be fully operationalized. These centres can anchor cottage industries, support value addition, and create local jobs across all cadres, directly and indirectly, combined with fiscal discipline and reduced domestic borrowing, they can become engines of inclusive growth.
Austerity, when applied intelligently, will free resources, restore confidence, and lay the foundation for sustainable growth in 2026 and beyond.
