The Minister of Finance and Economic Affairs is expected to lay the final 2027 national budget before the National Assembly today, with initial estimates putting government spending at D66.78 billion, a 12.5 per cent increase from the D59.36 billion approved for 2026.
The proposed budget, which has already undergone scrutiny by the Assembly’s Finance and Public Accounts Committee (FPAC), includes recommendations from the committee ahead of the minister’s presentation of the final estimates for the 2027 fiscal year.
The initial estimates show that debt servicing will remain the single largest claim on government-funded expenditure, with D16.17 billion earmarked for national debt obligations. The allocation represents roughly one-third of the D48.6 billion expected to be financed directly by the government.
According to the initial budget estimates, domestic revenue is projected to reach D37.39 billion in 2027, representing a 16.1 percent increase from the previous year. Tax revenue is expected to rise by 16.5 per cent to D31.47 billion.
The government also expects to receive D19.54 billion in project and programme grants. When these grants are included, total revenue and grants are projected at D56.94 billion.
Expenditure and net lending are estimated at D59.24 billion, leaving a gross budget deficit of D2.30 billion, equivalent to 0.99 per cent of the country’s projected nominal gross domestic product of D233.07 billion.
The projected deficit is slightly higher than the D2.07 billion estimated for 2026, although its share of GDP is expected to decline marginally from 1.01 per cent to 0.99 per cent.
On financing, the government plans to borrow D7.63 billion domestically, broadly in line with the previous year. Foreign borrowing is projected to increase by about 52 per cent to D2.21 billion.
Basic and secondary education has the largest sectoral allocation in the initial estimates, receiving D6.06 billion, followed by the health sector with D4.10 billion.
Recurrent expenditure accounts for D43.32 billion, approximately 89 per cent of government-funded spending, while government-financed development expenditure stands at D5.28 billion.
However, when donor-financed projects are included, the overall development budget rises to D23.47 billion, representing roughly 35 per cent of total planned expenditure.
Of the proposed D66.78 billion budget, D48.6 billion is expected to be financed directly by the government, while grants are projected to contribute D15.97 billion and new loans D2.21 billion.
The minister’s presentation tomorrow will bring the budget process to its next stage following FPAC’s scrutiny and recommendations. The final estimates will provide the basis for examining the government’s spending priorities, revenue projections and financing plans for the 2027 fiscal year.