He said some investors are also delaying decisions after the Supreme Court nullified the results of an Aug. 8 presidential election citing irregularities in the tallying process.
Kenya has the highest per capita income in the region and is known for its capitalist tradition, stability and role as a Western ally.
It hosts the regional headquarters of several global firms.
The government had initially projected a 5.9 percent growth for this year but the economy expanded 4.7 percent in the first quarter, mainly due to poor agricultural performance.
The revenue target is 1,549.4 billion shillings for the fiscal year.
“There is a shortfall in customs.
Adding to the squeeze, the electoral board has requested 12 billion shillings for the presidential re-run.
There is the need to provide for security and so those costs could be much higher than the 12 billion.
This was not budgeted for,” Thugge said, adding they will cut non-essential expenditure to fund the poll.
Government officials will no longer be allowed to travel outside the country without clearance from the president and domestic travel will also be reviewed, he said.