Kenya has accused some donors of sponsoring projects based on their interests rather than actual needs, sparking a trail of stalled projects due to lack of counterpart funding from the government.
The government says donor-funded projects in the country have largely been fuelled by their needs, ignoring real public interest and costing taxpayers, as the government is charged billions of shillings when it fails to match its share of funding.
The Treasury says the government, through the Deputy President’s office, is reviewing all donor-funded projects in the country, following revelations that 234 projects valued at Sh2.17 trillion are at risk of stalling should the government fail to provide Sh130 billion counterpart funding.
Treasury Cabinet Secretary John Mbadi said in an interview that donor-funded projects have been stalling due to the funding model that favours donors’, rather than Kenyans’ interests.
“It is because the donor funding we are getting in this country has to some extent relied on the suppliers. It's supplier-driven, not demand-driven. You find that some projects are initiated because some donors want to come in and put money,” he said.
The CS said the government has been engaging donors and is currently reviewing the projects to establish those that lack value.
Treasury acknowledges that part of the talks involves challenges the government has been experiencing in providing counterpart funding to donor-funded projects, which attracts hefty commission fees at taxpayers’ cost.
“We are reviewing all the portfolios that are there, the pipeline of portfolios. It's a meeting we have been having, and we have been engaging donors through the DP's office,” Mbadi said.
Treasury’s disclosure comes at a time the Parliamentary Budget Office (PBO) last month revealed that the country is littered with some 234 projects valued at Sh2.17 trillion that could stall if the state fails to provide Sh130 billion counterpart funding.
National Treasury and Economic Planning Cabinet Secretary John Mbadi during a past event in Nairobi on August 28, 2025.
Photo credit: Wilfred Nyangaresi | Nation Media Group
The PBO noted that Sh1.92 trillion projects are being funded through loans and Sh251 billion projects through grants, but they come with a requirement that Kenya funds a portion before they can progress.
“Kenya has previously experienced low absorption of donor funds due to bureaucratic hurdles, capacity constraints, and delays in counterpart funding. The risk of stalled or incomplete projects, especially those with significant public investment value and locally financed components, remains high,” the PBO said.
The office warns that this is a huge risk for the country, considering that home financed development spending is expected to remain subdued, due to pending bills linked to those projects.
