The national government has prioritised disbursements for roads, the Constituency Development Fund (CDF) and food security initiatives, amid cash challenges that saw just Sh129.8 billion put to development in the first six months of the current fiscal year.
The latest statement of exchequer shows that in the half year to December, 70 percent of the cash released to fund the national government’s development projects went to seven State departments.
The statement captures only development funding from the exchequer and does not address other sources of funding for projects.
The state department for roads received the largest development funding of Sh26.4 billion from the exchequer, though this was still less than half of its budget of Sh66.2 billion for the year, leaving it with a Sh39.8 billion balance to settle in the remaining six months.
The government had in the first quarter spent a total of Sh24 billion on construction and rehabilitation of 140km roads, with funding from the exchequer and other sources.
Over the six months to the end of December, the State Department for Economic Planning had the second-highest disbursements from the exchequer, receiving Sh22.9 billion (33 percent of its development budget in 2024/25).
The state department’s spending during the period has been heavily on community development activities, mainly funding the National Government Constituency Fund (NG-CDF) to which it had released Sh11.8 billion in the first quarter.
“An analysis of the State Department for Economic Planning report on the project implementation reveals that many projects faced inadequate budget allocation, donor non-compliance and budget cuts,” the Controller of Budget (CoB) noted in a report for the first quarter of 2024/25.
During the six months, Sh1 in every Sh2.6 that the government released went to the two state departments, underlining the government’s focus on roads and CDF which mainly funds bursaries for students and construction of classrooms.
The two state departments received a total of Sh49.3 billion.
"Further analysis shows the state department for roads had the highest capital transfers at Sh24.47 billion, representing 29 percent of the total capital transfers, followed by the state department for economic planning at Sh14.16 billion," the COB noted in the report.
The national government was originally budgeted to spend Sh458.8 billion on development projects funded by the exchequer during the current fiscal year, but this was revised down to Sh351.3 billion after the Finance Bill 2024 was withdrawn.
Recently, the Treasury has attributed poor funding to key programmes to debt-service pressures that have seen the exchequer release Sh653 billion for debt payments in six months alone.
Treasury Cabinet Secretary John Mbadi last week attributed delays to release capitation funds for schools, equitable shareable revenues to counties and salaries to some public servants to debt-service pressures.
“The reason why we have not released capitation funds is because this month we had to pay a Sh70 billion loan to external lenders,” Mr Mbadi said.
The Sh129.8 billion that the Treasury released to fund projects being implemented by national government entities during the six months was 37 percent of the revised annual development budget, and left a balance of Sh221.5 billion to be released during the remaining six months.
The Treasury did not release any development cash to the national police service, state department for culture and heritage, state department for public service, and the national gender and equality commission.
The four agencies are budgeted to collectively spend Sh218 million during the current fiscal year.
The Treasury released Sh12.7 billion to fund development activities in the state department for crop development which has been heavily involved in food security initiatives, Sh8.3 billion to the state department for energy and Sh8.2 billion to the state department for basic education.
The Treasury also released Sh6.8 billion to the state department for irrigation and Sh6.4 billion to the National Treasury, bringing to Sh91.7 billion the total amount of development exchequer releases to the top seven state departments during the six months.
Collectively, the top seven state departments with highest development exchequer receipts during the half-year received 70.6 percent of all the money Treasury released to fund development over the period, even as Treasury failed to release any development funding to some four agencies.
The Treasury did not release any development cash to the national police service, state department for culture and heritage, state department for public service, and the national gender and equality commission.
The four agencies are budgeted to collectively spend Sh218 million during the current fiscal year.