Ministries return to Treasury Sh275bn allocated in Budget

• The low capacity to absorb the Budget, which has now grown to Sh1.5 trillion, has been a drag on economic growth because most of the budgeted development projects go unimplemented.
• Out of the original Budget estimates of Sh1.155 billion for 2011/12, only Sh895 billion was spent during the financial year —despite the allocation of more resources in the Supplementary Budget that was presented in April.
• The Supplementary Budget raised the total allocations to Sh1.170 billion, but even the original Budget could not be exhausted during the fiscal year.

Various ministries failed to spend Sh275 billion allocated to them in the financial year ended June 30, 2012, raising questions on the government’s capacity to implement the ever-growing national Budget. This represents nearly a quarter of the funds allocated.

The low capacity to absorb the Budget, which has now grown to Sh1.5 trillion, has been a drag on economic growth because most of the budgeted development projects go unimplemented.

Out of the original Budget estimates of Sh1.155 billion for 2011/12, only Sh895 billion was spent during the financial year —despite the allocation of more resources in the Supplementary Budget that was presented in April.

The Supplementary Budget raised the total allocations to Sh1.170 billion, but even the original Budget could not be exhausted during the fiscal year.

In the Budget Implementation Review Report fourth Quarter 2011/12, the Controller of Budget, Agnes Odhiambo, said her office was working with the ministries, departments and agencies (MDAs) to improve Budget implementation.

“The office is in the process of putting in place a monitoring and evaluation framework to ensure that MDAs programmes and projects are continuously monitored and evaluated,” said Mrs Odhiambo.

During the launch of the discussions for the 2013-2016 Medium Term Expenditure Framework (MTEF) by Sector Working Groups yesterday, Treasury Permanent Secretary Joseph Kinyua said monitoring of Budget implementation would be improved.

Donor funds

Among the factors hampering Budget implementation was the uncertainty around donor funds, the PS said.

“We have challenges with programmes that are being funded using external resources,” said Mr Kinyua.

The Controller of Budget report proposed that the State makes guidelines on how to use development funds.

“In order to achieve the targets set in the Budget Policy Statement the government should develop clear and comprehensive guidelines for utilising development funds efficiently by the MDAs that will ensure proper execution of projects and programmes,” the report said.

The National Security sector had the highest rate of absorption of 100 per cent, while physical infrastructure sector had the least utilisation rate of 31.5 per cent of the gross revised estimates.

The recurrent budget’s absorption rate was 84.0 per cent and development budget’s absorption rate was 55.1 per cent.