Development spend falls to 15pc on rise in wage bill, debt pay


Construction of the Standard Gauge Railway berth number five at the port of Mombasa. FILE PHOTO | NMG

Development expenditure accounted for 15.38 per cent of the total cash released by the Treasury in 10 months through April, official statistics show, highlighting increased demand from administrative expenses and debt servicing.

The national government spent Sh67.21 billion less on development projects between July 2017 and April 2018 compared with the same period a year earlier, latest data from the Treasury shows.

Recurrent expenditure and debt repayments gobbled up the lion’s share of the nearly Sh1.37 trillion, which was released from the exchequer in the review period, leaving Sh210.15 billion for development.

That means for every Sh100 that was spent by ministries, departments and agencies, only Sh15 went into development – the lowest share in Jubilee administration’s six-year reign.

The expenditure on development in the period was half the 30 per cent provided for under the Public Finance Management Act, 2012.

Recurring expenses such as salaries, travel costs, entertainment and office stationery surged by Sh109.68 billion to stand at Sh716.58 billion, partly reflecting the impact of the Sh10 billion on repeat presidential poll last October and slight pay raises for doctors and lecturers.

READ: Public wage bill rises by Sh90bn in nine months

President Uhuru Kenyatta has also created the positions chief administrative secretaries (CASs) in each ministry who work under Cabinet Secretaries, further exerting pressure on the country’s already bloated public wage.

The country continued to spend more on servicing debt than on development, a trend which picked up from financial year 2016-17 as some of the borrowing that the Jubilee administration has contracted since 2013 started maturing.

Between July last year and April, the Treasury spent Sh387.26 billion on public debt – a growth of 20.39 per cent over a year ago and 84.28 per cent more than the spend on development projects.

Mr Kenyatta’s administration has largely contracted external debt since 2014 to build roads, bridges, power plants and a modern railway, projects seen as stimulants for growth in economic activities.