Market News

More counties increase development spend


National Treasury Cabinet Secretary Ukur Yatani during the launch of Economic Survey Report 2021 on September 9, 2021. NMG PHOTO

More counties spent money on development over the first nine months of the financial year ended June 30, 2021, compared to a similar period in the previous year, a report by the Treasury shows, raising hope for growth in the devolved units.

Kajiado, Kakamega, Kitui, Mandera, Makueni, Marsabit, Mombasa, Murang’a, and Wajir spent more than 30 percent of their budgets on projects in the first three quarters of the 2020/2021 fiscal year—an improvement from the previous year.

“Compared to the financial year 2019/20, this is an increase from the five county governments who had exceeded the 30 percent on the actual development spending for the first nine months,” the Treasury said.

Marsabit topped the list on actual expenditure on development at 37.4percent followed by Kajiado(35.5 percent), Mandera(33.6 percent), Kakamega(33.4 percent), Murang’a(33.1 percent), Makueni(32.5 percent), Mombasa(31.3 percent), Wajir(31 percent), and Kitui(30.4 percent).

Baringo, Lamu, and Nairobi were the lowest spenders over the period at 7.9, 7.7 and 1 percent respectively.

The report further showed improvement in the allocation of budgets for development by the counties, bucking a trend in previous years when more funds went towards recurrent expenditure.

Treasury said all counties except Nairobi met the statutory requirement on the allocation of budgets for development over the review period.

Section 107(b) of the Public Finance Management Act, 2012 requires that over the medium term, a minimum of 30 percent of each county government’s budget shall be allocated to development expenditure.

The report also shows that the overall absorption rate--actual expenditure over budget-- for the county governments combined for the first nine months of the fiscal year 2020/21 was 44.2 percent, which is lower than the absorption rate in the financial year 2019/20 by 4 percent.