Public investment in roads, power generation plants and transmission lines has been the hardest hit by the William Ruto administration’s sharp development budget cuts, official data shows.
Expenditure on road and energy projects from the government’s main account hit the lowest levels in the first half of the current financial year since the Treasury started publishing the exchequer data a decade ago.
Cash channelled to the Roads department for development amounted to Sh7.77 billion in the six months ended December, marking the smallest expenditure since the financial year 2023/14 when such data is publicly available.
The development expenditure by the department primarily tasked with building roads and bridges represents a fall of more than half (57.66 percent) compared with Sh18.35 billion in a similar period the year before.
The contraction is even sharper at 75.11 percent compared with Sh31.21 billion splashed on projects in the same period during the fiscal year ending June 2022, the final year of the administration of former president Uhuru Kenyatta.
This signals a major policy shift by President Ruto from his predecessor’s heavy investment in infrastructural projects at a time when the country is grappling with a record debt repayment burden. Projects in the energy sector such as electricity generation plants and power transmission lines have also been hit, with expenditure in the review period similarly touching the lowest levels in the review period.
The Treasury data shows a modest Sh2.50 billion was wired to development projects in the half-year period, a sharp fall from a record high of Sh17.27 billion in a similar period in the financial year 2017/18.
Road and energy infrastructure arguably gobbled the lion’s share of the budget under the Kenyatta administration, but this came with the burden of debt on taxpayers largely through loans contracted from China.
That attracted criticism from Dr Ruto’s campaign in the run-up to the August 2022 closely contested presidential polls, with the current Prime Cabinet Secretary Musalia Mudavadi reportedly remarking that “Kenyans don’t eat roads”.
The cost of debt repayments has, for instance, become the single largest expenditure, gobbling up Sh600.73 billion. The ballooning debt servicing expenses underline the impact of commercial loans contracted in the last decade to put up much-needed roads, bridges, power plants and a modern railway line.
“The government will continue to strengthen the institutional framework for road development in order to accelerate the speed of completion of new and stalled road construction projects to cater for the growing population,” the Treasury wrote in the draft 2024 Budget Policy Statement (BPS).
“In order to minimise waste of resources, the government will ensure all projects are completed within two years and no new project to be launched before the ongoing ones are complete.”
Mr Kenyatta said in his last address at a national celebration that his administration had built more than 11,000 kilometres of tarmac roads since taking power in April 2013, estimating the additional network at nearly six times that put up by his three predecessors since independence.
“The naysayers said that we should not invest so heavily in infrastructure because people don’t eat roads and floating bridges,” he said on June 1, 2022. “I refused their pessimism because I know what a new road means to the farmer who has for decades been unable to get their produce quickly to the market.”
The Ruto government last year said it was experiencing cash flow challenges that have slowed down work on projects inherited from the previous administration amid a policy to freeze new projects pending the completion of the existing ones.
Dr Ruto expressed shock at Sh900 billion in commitments for the roads sector by his predecessor’s government in which he served as Deputy President for 10 years.
He said his administration has scaled down the commitments by nearly a quarter, or Sh220 billion, following consultations with road agencies — the Kenya National Highways Authority (KeNHA), the Kenya Urban Roads Authority (Kura) and the Kenya Rural Roads Authority (KeRRA).
“We have tried to cut it down; we have tried to cut some of the roads that have not started. But we remain with about Sh680 billion that we have to manage,” the Kenyan leader told a joint media session last year.
The drop in budget for the construction of roads and energy is a reflection of a similar trend in overall development expenditure, which fell 51.34 percent to Sh70.41 billion— the lowest on record in the last decade.
Economists say reduced spending on development projects such as roads, water, power plants, housing and electricity transmission lines slows down economic activities, hurting the creation of new job opportunities and government revenue, largely taxes.
Cement makers, steel manufacturers, contractors and the thousands of workers employed in the infrastructure pipeline benefit from public spending and usually feel the pinch of a drop in public expenditure on development.
