The State House and Executive Office of the President withdrew nearly Sh900 million more than the budget for the nine-month period ended March 2024, signalling poor projections in expenditure plans.
Latest quarterly Treasury disclosures show expenditure at President William Ruto’s official office and residence as well as the offices for his coterie of aides amounted to Sh11.29 billion between July 2023 and March 2024 against a target of Sh10.40 billion.
This translates to an over-expenditure of Sh882 million, pointing to the offices at State House and Harambee House committing more money to projects than budgeted for.
Expenditure above the budget goes against a commitment by the National Treasury to reject cash requests beyond what has been approved, except for critical sectors such as security and education.
“In order to maintain the primary balance consistent with the fiscal consolidation path, expenditures have to be maintained at the levels approved in printed estimates,” the Treasury officials wrote in the Budget Review and Outlook Paper for the current fiscal year ending June. “... additional spending pressures will be accommodated within approved ceilings, that is reallocation possibilities, except those of the security and education sectors.”
The Treasury’s quarterly budgetary disclosures show that expenditure at the State House surpassed the Sh7.38 billion budget by Sh689 million, while the Executive Office of President’s withdrawals exceeded the Sh3.03 billion target by Sh193 million.
The expenditures exclude those for the Office of the Deputy President and Prime Cabinet Secretary which are done under separate votes. This is despite Dr Ruto listing them under the Executive Office of the President through Executive Order No. 1 of 2023.
Deputy President Rigathi Gachagua’s office spent Sh2.995 billion, slightly below Sh3.224 billion budget for the nine-month period. Prime CS Musalia Mudavadi’s office surpassed the Sh897 million target for the nine-month period by Sh10 million.
The Office of the President as per the executive order comprises the Chief of Staff, Head of the Public Service and his deputy, Secretary to the Cabinet and State House Controller.
Other key offices are for Council of Economic Advisors, National Security Advisor, Council of Climate Change Advisor, Women Rights Advisor, Private Secretary to the President, Fiscal Affairs and Budget Policy Office, Economic Transformation Office, Head of the Presidential Communication Service and Statehouse Spokesperson.
Recurrent bills such as maintenance, administration and compensation for employees at State House overshot the budget by Sh486 million between July 2023 and March 2024 to slightly more than Sh6.88 billion.
The budget for the day-to-day running of the Executive Office of the President was also Sh181 million more than the Treasury’s target, according to the disclosures.
This came on the back of the State House getting an additional Sh2.53 billion in the supplementary budget late last year “to cater for personnel emolument, enhanced operations & maintenance expenses, refurbishment of buildings and other civil works”.
Article 223 of the Constitution, operationalised through Section 36(9) of the Public Finance Management (National Government) Regulations, enables State offices to spend as much as 10 percent over the cash approved by the National Assembly.
The Constitution requires the Treasury to table in the House a mini-budget two months after the withdrawal of unbudgeted money from the Consolidated Fund without the approval of the members of parliament. This was done last month, and the document is awaiting debate and approval.
The PFM regulations, however, bar legislators from approving a supplementary budget that exceeds 10 percent of “the approved budget estimates of a programme or sub-vote unless it is for unforeseen and unavoidable need”.
The over-expenditure by the State House shines the spotlight on the Ruto administration’s austerity measures aimed at reversing a past trend where the Treasury has been forced to borrow cash to fund government operations.
Kenya’s fiscal austerity is largely hinged on the increased taxation, including doubling of value added tax on fuel to 16 percent and 1.5 percent housing levy on monthly pay for workers which has been declared unconstitutional by the courts.
The austerities target to reduce the hole in the budget – which is filled through borrowing – from 5.6 percent of gross domestic product last financial year ended June 2023 to 4.4 percent in the current one and 3.9 percent in the one that follows.
“The Government will continue to rationalize expenditures by eliminating non-core expenditures while improving efficiency in development projects implementation so as to contain expenditure growth, stabilize debt and reduce debt vulnerabilities,” Treasury wrote in the 2024 Budget Policy Statement. “Expenditure rationalization cuts across all Ministries, Departments and Agencies.”
