The Cabinet has approved sweeping reforms across Kenya’s payroll system, national budget, education sector, and drought response measures, with the goal of strengthening governance, improving service delivery, and driving economic growth.
Following a special audit of the 2024-2025 financial year, the Cabinet sanctioned comprehensive reforms of the Government Human Resource Information System-Kenya (HRIS-K) to address long-standing payroll integrity issues. The audit revealed that over 4.7 million payroll records had been altered by 720 system editors without audit trails, while approximately 300 state corporations had not migrated to HRIS-K.
The Cabinet directed the full integration of statutory deductions at source, mandatory security certification by 11 March 2026, deployment of forensic analytics to guide disciplinary action, and the establishment of Payroll Audit Units. Accounting officers were also instructed to submit verified payroll data and take personal responsibility for any irregularities.
The Cabinet approved Sh4.1 billion to scale up interventions in counties affected by worsening drought conditions. Currently, an estimated 3.3 million people are facing acute food insecurity, with projections indicating this could rise to 3.6 million by June 2026. Counties in the Alarm phase include Mandera, Wajir, Kwale, and Kilifi, while 12 others are in Alert. Vulnerable populations include over 810,000 children and 104,000 pregnant and lactating women.
The Cabinet approved the Sh4.7 trillion Budget for 2026/27, projecting total revenues of Sh3.53 trillion. Expenditure allocations comprise Sh3.46 trillion for recurrent spending, Sh749.5 billion for development, Sh495.7 billion for county transfers, and Sh2 billion for the Contingency Fund.
Under the Division of Revenue Bill 2026, counties will receive Sh420 billion as an equitable share and Sh15.2 billion for the Equalisation Fund, with an additional Sh75.7 billion proposed under the County Governments Additional Allocation Bill. The Budget Policy Statement, themed “Accelerating Gains under the Bottom-Up Economic Transformation Agenda for Inclusive and Sustainable Growth”, prioritises investments in education, health, energy, infrastructure, agriculture, social protection, and national security.
Cabinet forwarded a package of education reform Bills to Parliament, including the Tertiary Education Placement and Funding Bill 2024, which consolidates student placement and funding authorities for universities and TVET institutions, and the Kenya National Qualifications Framework (Amendment) Bill 2024, which clarifies the mandate of the Kenya National Qualifications Authority and resolves overlaps with sector regulators. These reforms aim to eliminate inefficiencies, align governance and curriculum with the Competency-Based Education framework, and improve teacher training and financing.
Cabinet approved Sh16.6 billion ($128 million) for completion of the Mwache Multipurpose Dam Project in Kwale County. Once completed, the dam will supply 186,000 cubic metres of water daily to Kwale and Mombasa counties, supporting irrigation, climate resilience, and regional water security.
The Cabinet endorsed the Reviewed Policy on the Devolved System of Government, which clarifies the roles of national and county governments, strengthens intergovernmental coordination, and improves county revenue frameworks to address persistent challenges after more than a decade of devolution.
Cabinet also approved the reorganisation of the Kenya National Convention Bureau to enhance the MICE sector, the Trade Descriptions (Amendment) Bill 2024 to modernise consumer protection, and a national acceleration plan to eliminate Female Genital Mutilation by 2025/26. It authorised hosting of international initiatives, including the International Nuclear Conference 2026 in Mombasa and operationalisation of offices for the International Vaccine Institute, Novo Nordisk Foundation Kenya A/S, and The Ford Foundation. Additionally, Cabinet approved Kenya’s bid to host the Eastern and Southern Africa Anti-Money Laundering Group Regional Training Academy and ratification of the International Organisation for Mediation, positioning Kenya as a founding member.
The Cabinet emphasised the importance of sustained reforms, fiscal discipline, and strategic investments to drive inclusive growth and safeguard national resources.
President Ruto assents to three National Assembly Bills advancing social and economic reforms
