Treasury Cabinet Secretary John Mbadi (left) and President William Ruto at State House, Nairobi, on August 12, 2024.
The government created six additional state departments through an executive order during the first six months of the 2025/2026 financial year despite publicly pursuing austerity measures that included scrapping more than 40 state corporations.
A new report by Controller of Budget (CoB) Margaret Nyakang’o shows that the number of Ministries, Departments and Agencies (MDAs) rose to 87 from 81 in the 2024/2025 financial year.
According to the report, the additional state departments were created through Executive Order No 1 of 2025 which repealed Executive Order No 2 of 2023, dissolved the State Department for Performance and Delivery Management and established seven new state departments.
The new departments and their budget allocations for the 2025/2026 financial year include National Government Coordination (Sh1.04 billion), Public Investments and Assets Management (Sh3.91 billion), Special Programmes (Sh653.69 million), Aviation and Aerospace Development (Sh14.52 billion) and Human Rights and Constitutional Affairs (Sh1.02 billion).
Others are Science, Research and Innovation, Children Services and Justice.
However, the report provided detailed information on all the state departments except Children Services and Justice and Science, Research and Innovation, which had neither their mandates nor budgetary allocations and performance indicated during the period under review.
The Controller of Budget Margaret Nyakang'o.
In January 2025, President William Ruto announced the restructuring of 47 state corporations in a move aimed at eliminating overlapping functions, reducing government expenditure and easing the burden of the growing national debt on taxpayers.
According to Dr Ruto, staff from the affected corporations were to be redeployed to other ministries and state agencies, while public servants who had attained the retirement age of 60 years would retire immediately without extension.
The plan to privatise, merge and dissolve several state corporations including suspending the hiring of Chief Administrative Secretaries (CASs) followed the rejection of the Finance Bill, which sparked nationwide protests in June 2024.
Other austerity measures announced by the government included scrapping budget allocations for the offices of the First Lady, the Deputy President’s spouse and the Prime Cabinet Secretary, as well as eliminating confidential budgetary provisions in various executive offices, including the President’s office.
In a circular issued by the then National Treasury Cabinet Secretary Njuguna Ndung’u, President Ruto also directed government ministries and departments to cancel all new projects in that financial year.
Deputy Presidednt Kithure Kindiki alighting from a Kenya Air Force plane. His office has laid down a spending plan of Sh409.66 million on transportation, storage and mail services in the year ending June 2026.
Dr Ruto further stated that no new tenders would be awarded and that only pending bills from the 2023/2024 financial year would be prioritised.
The CoB analysis of the Office of the Deputy President revealed mixed performance across its programmes during the period under review.
While all domestic and foreign engagements for the Deputy President were coordinated achieving 100 per cent of the target consultative forums with MDAs and other actors on coffee value chain interventions recorded no output in the first six months of the current financial year against a target of four engagements.
The performance of programmes under the Office of the Deputy President also showed varied fund utilisation and absorption rates.
Under the Office of the Prime Cabinet Secretary, the CoB noted that the Government Coordination and Supervision Programme fully facilitated the Prime Cabinet Secretary, achieving 100 per cent of its target, indicating adequate operational support in the first six months of the 2025/2026 financial year.
However, the office recorded poor performance in convening National Development Implementation Committee meetings, holding only one meeting against a target of four.
Treasury Cabinet Secretary John Mbadi (left) and President William Ruto at State House, Nairobi, on August 12, 2024.
Similarly, the development and signing of Memoranda of Understanding (MoUs) with MDAs and partners recorded poor performance, managing only three collaborative frameworks against a target of 12, the report shows.
According to the United Nations Classification of the Functions of Government, MDAs are grouped into ten sectors to support fiscal analysis by breaking down government fiscal statistics for comparability.
Overall, the MDAs received Sh954.23 billion, comprising Sh145.03 billion for development expenditure and Sh809.19 billion for recurrent expenditure.
Development spending was highest in capital transfers to MDAs in the form of subsidies, grants and direct transfers to Semi-Autonomous Government Agencies (SAGAs), which totalled Sh169.55 billion.
Other major development expenditures included construction and civil works at Sh62.75 billion and the purchase of specialised plant, equipment and machinery at Sh9.13 billion.
The State Department for Housing and Urban Development recorded the highest ministerial expenditure under the construction and civil works category at Sh58.89 billion.
The report also indicates that MDAs spent Sh337.63 billion on compensation to employees, equivalent to 25 per cent of the national government’s equitable share of revenue raised nationally.
This is within the threshold set by the Public Finance Management Act, 2015, which stipulates that compensation for employees should not exceed 35 per cent of the national government’s equitable share of revenue.
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