Finance ministers in Kenya, Uganda, and Tanzania will present their 2026/27 budgets to parliament on Thursday, with investors focused on how they will shield their economies from cost shocks linked to the Middle East war while keeping debt in check.

Kenya’s Fiscal Challenges

In Kenya, the biggest economy in the region, markets will be watching to see how Finance Minister John Mbadi will balance high debt repayments, slowing growth, a temporary cut in petroleum taxes, and a wide fiscal deficit. The country has been rocked by deadly protests against high fuel prices.

Andrew Matheny, senior economist at Goldman Sachs, said, “Treasury has consistently underperformed budget targets in recent years and the fiscal balance has remained in a primary deficit, insufficient to stabilize public debt and restore market confidence.”

Uganda’s Concerns

In neighboring Uganda, analysts cautioned that the Iran war shock on fuel prices could strain government spending plans. Enock Nyorekwa Twinoburyo, an economics lecturer at Makerere University, said, “We should not assume a back-to-normal trend, so it’s important that we have a shock mitigation measure.”

Higher oil prices are pushing up foreign currency demand, he said, “and that has manifested in foreign exchange shock”.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.