Ministries set to meet over unspent billions of shillings

Government ministries will meet next Wednesday to address the persistent trend of poor absorption of allocated funds.

The ministries used less than 40 per cent of development money, especially donor funds, three months to the end of the last financial year compared to over 90 per cent absorption of recurrent expenditure.

Data from the office of the Controller of Budget shows that between July 2011 and March 2012, the government only spent 36 per cent of its development budget which was Sh145.1 billion of the total Sh396 billion.

The poor absorption trend is blamed on poor planning by the ministries, lengthy procurement procedures and stringent demands from donors.

“We cannot stimulate economic growth if development expenditure is almost not being used,” said Christopher Kiptoo, the director of economic policy co-ordination at the prime minister’s office.

For instance, the governance, Justice, Law and Order cluster which was allocated Sh4 billion as development budget only achieved a 28 per cent absorption rate.

The Provincial Administration and Internal Security only used Sh1 billion of the Sh2.9 billion it got from the Treasury.

The ministry had requested Sh4.5 billion. The spending translates to a paltry 22 per cent of the requested funds.

The Justice National Cohesion and Constitutional Affairs sector realised a 5.3 per cent absorption rate which represents Sh55 million of the Sh107 million allocated to it from the Treasury.

Economists say despite the stringent checks and balances by donor agencies aimed at taming corruption contributing to the low absorption, most ministries lack proper planning.

“Lack of proper preparation to undertake certain projects makes some ministries to leave funds in the Treasury longer,” financial secretary at the Treasury Mutua Kilaka told a parliamentary committee at a past briefing.

The Ministry of Local Government used only Sh796 million of the Sh2.4 billion it was allocated. The ministry was seeking Sh5.4 billion from Treasury, meaning that it only utilised 16 per cent of the funds requested.

Data from the Ministry of Finance shows that the Treasury was holding Sh19.5 billion by June 2012 meant for key development projects, but lack of proper implementation had left the funds lying idle at the Consolidated Fund.

This includes Sh8 billion meant for the irrigation schemes, Sh1.5 billion to write off debts of coffee farmers, among others.

Officials at the office of the prime minister which is coordinating the meeting next week said some ministries request for more funds than they can actually use. “Treasury is known for slicing funds out of the requested estimates, so ministries inflate their estimates to cater for expected budget cuts by the ministry,” said Dr Kiptoo.