Critical projects in health, transport and housing suffered the biggest setbacks amid budget cuts that saw the national government miss spending on projects by Sh103 billion in the six months to December 2024.
During the first half of the 2024-25 fiscal year, the government spent Sh217.4 billion on projects, falling short of the Sh320.6 billion target, a new Treasury report shows.
The biggest casualties of the missed development spend, who accounted for 88.8 percent (Sh91.67 billion) of the Sh103.2 billion, were the State departments for Energy, Housing, Treasury, Economic planning, Transport and Water.
The departments have been implementing crucial projects such as treatment and testing of tuberculosis and HIV, affordable housing and railways, all of which have been hit.
“Recurrent expenditure for the period ending December 31, 2024, was Sh746 billion against a target of Sh798.7 billion, while development expenditure amounted to Sh217.4 billion against a target of Sh320.6 billion,” said the Treasury in the October-December 2024 budget report.
Overall, the national government missed spending by Sh156.1 billion, but two-thirds of the unspent budget was on development projects.
With a missed development spending of Sh21.48 billion, the state Department for Housing suffered the biggest hit over the six months, which affected crucial projects in housing development and affordable housing.
The state department was budgeted to spend Sh42.59 billion on development activities over the six months to December, but only spent Sh21.1 billion.
The Treasury in the second supplementary budget published last month cut the state department’s budget by Sh11.6 billion to Sh74.9 billion, with huge cuts affecting housing development and urban development and planning services.
The Treasury itself missed its development spending targets by Sh18.5 billion, amid impacts on funding of crucial health and financial services projects.
The Treasury was budgeted to spend Sh26.25 billion in the six months to December, but spent Sh7.7 billion only.
In the second supplementary budget, Sh16.9 billion was taken away from the Treasury’s development budget, even as Sh13.4 billion was increased to cater for recurrent activities such as salaries.
“The change in current expenditure comprises additional funds to cater for shortfall in personnel emoluments, operations and maintenance, the Motor Vehicle Leasing Programme and operations of the Kenya Revenue Authority,” said the Treasury documents.
On the development front, however, crucial projects under the support of the Treasury such as treatment of tuberculosis (TB), HIV testing, funding climate projects and funding the Equalization Fund will suffer huge setbacks, following the budget cuts.
The revised budget reduced the percentage of TB cases treatment from 85 to 20 percent while the number of Kenyans to be tested for HIV has been reduced from 7.6 million to 3 million.
Photo credit: Pool
For instance, the revised budget reduced the percentage of TB cases treatment from 85 to 20 percent while the number of Kenyans to be tested for HIV has been reduced from 7.6 million to 3 million.
The State Department for economic planning missed spending on projects by Sh11.4 billion after it implemented projects valued at Sh22.9 billion over the six months.
At the State Department for Transport, whose main projects are in the railways sector, Sh15.27 billion that was budgeted for spending in the six months to December was missed.
The state department planned to spend Sh16 billion on projects over the six months but spent Sh726 million only, amid budget revisions that have seen a number of plans by the state department scrapped or largely scaled down.
Among projects that were affected include the construction of the Riruta–Lenana–Ngong Railway Line, purchase and overhaul of hundreds of coaches and wagons, and the construction of Longonot- Malaba MGR Phase II.
The state department for water, which has huge projects in construction of dams and other water services, missed development spending by Sh14.2 billion, out of its six-month budget of Sh22 billion.
In the budget revision by the Treasury, the state department’s budget was cut from Sh49.8 billion to Sh27.8 billion, with the construction of Thwake Multipurpose Dam scaled down from a projected 95 percent completion level to 80 percent.
The state department for energy missed development spending by Sh10.7 billion, spending just above half of the budgeted Sh22 billion over the six months.
Overall, missed spending on projects by the six state departments accounted for Sh91.67 billion of the total missed development spending of Sh103.2 billion across the national government.
