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Economy

Only one ministry received development cash in July

Spending on development projects spurs economic
Spending on development projects spurs economic activities. FILE PHOTO | NMG 

Only a single ministry received cash for development in July, which marks the first month of the financial year, pointing to a cash flow that is hurting projects and jobs.

The latest Kenya Gazette shows Treasury released Sh1.6 billion to the State Department of Energy for its infrastructure projects.

The remaining 54 government ministries, departments and agencies (MDAs) had not spent cash on projects despite a warning by President Uhuru Kenyatta on the sluggish absorption of the development budget.

Parliament approved a budget of Sh422.3 billion for project spending on roads, power plants, water infrastructure and electricity transmission.

The delayed release of funds for projects comes in a period workers at the counties are staging a go-slow that has disrupted operations following failure to service their July dues.

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The 47 devolved units have not received a coin from the Treasury following a stalemate over the Division of Revenue Bill — which guides the sharing of income between the national government and counties.

Spending on development projects spurs economic activities.

The contractors working in the projects hire workers and also boost auxiliary sectors like cement makers, steel dealers and firms dealing in heavy equipment like excavators.

The government is the biggest buyer of goods and services and reduced spending affects economic growth and activities.

The MDAs have in the past blamed procurement laws and sluggish disbursement of funds, especially from donors at the start of the fiscal year in July for the low execution of development plans.

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