‘Big Four’ starved of funds as Treasury turns to other priorities
Monday January 03 2022
Government’s affordable housing units in Ngara, Nairobi. The state prioritised implementation of President Uhuru Kenyatta’s legacy projects as part of the economic recovery plan. PHOTO | FILE
Kenya’s President Uhuru Kenyatta’s legacy projects under the ‘Big Four’ agenda are facing more implementation challenges as the National Treasury diverts borrowed resources to fund pressing government operations.
Controller of Budget (CoB) Margaret Nyakang’o flagged the emerging trend in the National Budget Implementation Review report for the first quarter (July-September) of the 2021/2022 fiscal year
The report dated October 2021, shows of the allocations, 10 key sectors under the General Economic and Commercial Affairs (GECA) sector — which is a significant player in job and wealth creation — industrial development, investments and trade promotion, tourism development, savings mobilisation and cooperative development, regional integration and development received the lowest budgetary allocation in the fiscal year 2021/22.
According to the report the government’s non-alignment of budget allocations of the sectors to the ‘Big Four Agenda’, delays in settlement of pending bills and failure by the National Treasury to adhere to the Ministries, Departments and Agencies (MDA) cash plans and forecasts when disbursing funds hindered effective budget implementation during the three months to September 30, 2021.
According to the report, all sector programmes and budget allocations should be aligned according to sector functions to realise the ‘Big Four Agenda’.
National priorities
“The CoB, therefore, recommends aligning and harmonising programmes and resource allocation to support the ‘Big Four Agenda closely’.
‘‘This will enhance the realisation of the Medium-Term Plan goals and national priorities,” said Dr Nyakang’o in the report dated October 2021.
“There is a need for the national government to ensure that all critical issues are addressed promptly.”
The national government’s total expenditure in the three months to September 30 this year amounted to $5.63 billion comprising development and recurrent expenditures of $1 billion and $4.63 billion respectively.
A total of $1.09 billion, representing 44.2 percent of the ministerial gross recurrent expenditure was spent on compensation to employees, in the period under review followed by current transfers ($792.23 million) and operations and maintenance at $593.66 million.
The Teachers Service Commission recorded the highest expenditure on Compensation to Employees at $601.07 million (54.8 percent of the total spending) on compensation to employees by the national government.
The government prioritised implementation of President Kenyatta’s legacy projects as part of the economic recovery plan, including maintaining the economic stimulus programme to cushion vulnerable citizens and business affected by the Covid-19 pandemic.
Affordable housing
In the 2021/22 Budget Treasury Cabinet Secretary Ukur Yatani allocated $1.26 billion to the projects which touch on universal healthcare, affordable housing, manufacturing for job creation and food and nutrition, security and an additional $206.25 million towards the economic stimulus programme.
“In this regard the government will fast-track implementation of programs and projects under the ‘Big Four ‘Agenda to enhance food and nutrition security, achieve universal healthcare ,provide affordable housing and support growth of manufacturing sector for job creation,” Mr Yatani said in his Budget statement for the 2021/22 fiscal year.
Development expenditure recorded a 34.8 per cent decline compared with $1.53 billion spent in a similar period in the fiscal year 2020/21.
According to the report, the National Treasury relied heavily on external borrowing to fund the budget resulting in a disproportionate growth in public debt that grew by 3.6 percent to $71.42 billion in three months to September 30 this year from $68.83 billion in the same period in the last financial year (2020/21).
The debt comprised 51 per cent due to external lenders and 49 per cent to domestic lenders, with allocation towards servicing the public debt in the 2021/22 fiscal year amounting to $10.44 billion, compared with $8.55 billion allocated in the last fiscal year (2020/21).
According to the National Treasury pending bills as of June 30, 2021 stood at $506.96 million and a total of $33.92 million was paid in the first three months of the fiscal year 2021/22, leaving an outstanding balance at $472.14 million, excluding $894,196.42 considered as ineligible.