Hospitality, seminars, rent cost taxpayers extra Sh5bn

Controller of Budget Margaret Nyakang’o. FILE PHOTO | FRANCIS NDERITU | NMG

Top government officials gobbled up an extra Sh4.99 billion on rent, hospitality, and seminars in the year ended June compared to the previous period, defying calls to cut the wastage of taxpayer funds and ease pressure on the Exchequer.

Official data from the Controller of Budget (CoB) on government spending for the period show that the bill on the three items shot to Sh25 billion, a 24 percent jump from Sh20.01 billion spent in the year ended June 2022.

The rise defied the new administration’s calls to cut spending on non-critical items as Kenyans bear the brunt of increased taxation to raise more revenue to repay debt and fund development projects.

“Total expenditure by ministries, departments, and agencies (MDAs) was Sh8.64 billion where the Office of the President recorded the highest hospitality expenditure at Sh2.34 billion, followed by Independent Electoral and Boundaries Commission at Sh2.12 billion,” CoB Margaret Nyakang'o says.

An analysis shows that hospitality bills accounted for the biggest chunk of the increase with a rise of Sh2.37 billion to Sh8.63 billion in the period followed by training and seminars at Sh1.35 billion to Sh5.2 billion.

The spending on rent rose by Sh1.26 billion to Sh11.12 billion in the year ended June, as the Kenya Kwanza administration comes under increased scrutiny.

Faced with fast-maturing foreign and local debt, the Treasury has introduced new taxes such as housing levy besides increasing the rates on existing ones like the doubling of Value Added Tax on fuel to 16 percent, in a bid to raise more cash.

Debt servicing costs have been climbing in recent years after the grace period extended by rich countries, notably China, expired.

Repayments for loans that the Treasury has tapped in the local market are also falling due, further piling pressure.

President William Ruto had upon assumption to office in September last year disclosed plans to cut the budget deficit by reducing non-essential spending on travelling, advertising, and training.

In November last year, a schedule published by Treasury Cabinet Secretary showed that 100 percent of the remaining balances on foreign travel, training, and motor vehicle and furniture purchase budgets as of September 30, 2022, would be slashed.

Back to sanity

Dr Ruto announced budget cuts to bring the country "back to sanity", seeking to succeed where the previous administration had made an unsuccessful attempt.

The Treasury has over the years picked seminars, training, and hospitality as key avenues where taxpayer funds were wasted and unsuccessfully directed MDAs to cut spending on these items.

Increased spending on the items continues to hurt the Exchequer’s ability to free up funds for development given the huge expenditure on the servicing of foreign debt.

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