The Treasury notice indicates that 51 MDAs had not spent cash on projects despite last year’s warning by President Uhuru Kenyatta on the sluggish absorption of the development budget.
Parliament has approved a budget of Sh410 billion for project spending on roads, power plants, water infrastructure and electricity transmission.
The delayed release of funds for projects comes in a period that saw the 47 counties receive nothing from the Treasury in what could dim economic growth and jobs creation.
All the government ministries, departments and agencies (MDAs) had not spent a single cent on development at the end of the first month in the fiscal year beginning July, Treasury documents show.
The Treasury notice indicates that 51 MDAs had not spent cash on projects despite last year’s warning by President Uhuru Kenyatta on the sluggish absorption of the development budget.
Parliament has approved a budget of Sh410 billion for project spending on roads, power plants, water infrastructure and electricity transmission.
The delayed release of funds for projects comes in a period that saw the 47 counties receive nothing from the Treasury in what could dim economic growth and jobs creation.
The government remains the biggest buyer of goods and services and reduced spending has an effect on economic growth and activities.
'The MDAs have in the past blamed procurement laws and sluggish disbursement of funds by the Treasury at the start of the fiscal year in July for the problem. Delayed disbursement of funds budgeted for infrastructure projects from donors has also been cited as a major cause of the low execution of development plans.
Kenya has been struggling to free up cash for use in projects that will ultimately boost infrastructure and create jobs in a country where unemployment stands at above 40 per cent.
Mr Kenyatta in July directed ministries not to sanction new projects until ongoing ones are completed in order to stop wastage of resources.
Delay in spending development budget means that projects go beyond their timelines affecting their viability.
The development spending also boosts economic growth with contractors hiring more workers and buying supplies from other companies.
This puts money in private hands through demand for raw materials, which ultimately creates jobs.
Cement makers, steel manufacturers, contractors and the thousands of workers employed in infrastructure projects benefit from public spending and are likely to feel the pinch of the budget cuts.
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