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Projects spending dips by Sh43bn on Ruto cuts

President Ruto

President William Ruto. Spending on development projects fell by 22 per cent in the five months to November as President William Ruto closed the taps of cash on some of the projects that had been prioritised by his predecessor in this year’s budget.

Photo credit: Pool I Nation Media Group

Spending on development projects fell by 22 per cent in the five months to November as President William Ruto closed the taps of cash on some of the projects that had been prioritised by his predecessor in this year’s budget.

Fresh data from the Central Bank of Kenya (CBK) shows development expenditure fell by Sh42.88 billion to Sh148.96 billion during the first five months of the financial year 2022/23 compared to a spend of Sh191.84 billion during the previous fiscal year.

The spending is also Sh26 billion less than what the government had expected to use to finance development projects by end of November indicating a shift of spending priorities by the Kenya Kwanza government.

The National Treasury, in the draft 2023 Budget Policy Statement (BPS) attributed this underspending to reduced disbursements for the projects.

“Total expenditure and net lending for the period ending November 2022 was Sh1.096 trillion which was below the projected amount of Sh1.183 trillion by Sh87.1 billion. Recurrent spending amounted to Sh825.6 billion, development expenditure was Sh149 billion while transfer to county governments was Sh122.1 billion,” said the BPS.

“Development expenditure was below target by Sh26 billion on account of below target disbursements to both domestic and foreign-financed programmes by Sh14.3 billion and Sh11.6 billion respectively,” it said.

Non-priority projects

President Ruto had last year already indicated he will shelve funding to the tune of Sh182 billion to non-priority projects that were allocated these monies in this year’s budget by former President Uhuru Kenyatta.

The Treasury December revealed in disclosures to the International Monetary Fund (IMF) that the cut will be among fiscal readjustments that will be included in the supplementary budget for the financial year 2022/23.

Dr Ruto has committed to cutting this year’s Sh3.3 trillion budget by Sh290 billion targeting non-priority recurrent expenditures such as domestic and foreign travel, training expenses and hospitality costs, and unnamed development projects.

“On the spending side, we will contain expenditures at Sh3.386 trillion by partly offsetting existing pressures (Sh290 billion) through cuts on non-priority recurrent spending for Sh48.6 billion and an ambitious plan of rationalisation of non-priority projects for Sh181.6 billion,” said the Treasury.

In his first few months in office, Dr Ruto has focused on his priority projects including the Hustler Fund which had disbursed Sh15.9 billion by Wednesday, according to MSMEs Cabinet Secretary Simon Chelugui.