Ruto’s officials spent billions on luxuries – CoB

While Kenyans were nursing the pains of the high cost of living and fighting over bread and butter issues, President William Ruto and his officials spent nearly Sh3.3 billion on comfort as he settled at State House.

In a clear case of investment in opulence, the new Kenya Kwanza government exploited a loophole in the law to get additional funding for non-priority items.

The money, which was obtained as an emergency kitty, was used to give State House a new shine, purchase cars and construct a dais befitting an incoming President.

And in a damning revelation about the Ruto government’s bad spending habits, a report by the Controller of Budget (CoB) shows that out of the Sh1.4 trillion sent to State agencies for the last six months, only Sh70.41 billion went to development.

A huge chunk of the money was used for personnel emoluments.

The report shows that various Ministries, Departments and Agencies (MDAs) were allowed to spend a total of Sh3.29 billion under Article 223 of the Constitution for the first six months of the 2023/24 financial year.

Although the amount was a 0.07 per cent of the gross budget estimates and, therefore, within the 10 per cent ceiling set out in Article 223 of the Constitution, the report shows that some of the money was spent on non-priority items.

 Article 223 of the Constitution allows government agencies to access additional funding during the budget implementation process if the amount appropriated for any purpose under the Appropriation Act is insufficient or a need has arisen for expenditure for a purpose for which no amount has been claimed by that Act or money has been withdrawn from the Contingencies Fund.

  “The cumulative exchequer issues under Article 223 amounted to Sh3.29 billion, representing 0.2 per cent of the MDAs’ revised net estimates budget of Sh1.82 trillion appropriated by Parliament,” says the report dated February 2014.

It adds: “In line with Article 223 (2) of the Constitution, the consent of Parliament should be obtained or sought within two months after the first withdrawal of the money.

If Parliament is not sitting during the time contemplated in clause (2) or is sitting but adjourns before the approval has been sought, the approval should be sought within two weeks after its next sitting.”

To reflect the change of guard, State House was allocated Sh400 million to cater for the purchase of motor vehicles and another Sh700 million for the construction of a modern presidential dais at the State House Gardens.

 A total of Sh16.3 million was allocated for the purchase of East African Community Cabinet Secretary Penina Malonza’s official vehicle and Sh1.6 billion to cater for the facelift of Kenyatta International Convention Center (KICC).

El Nino support

The State Law Office was given Sh250 million for the refurbishment works of the former company’s registry to create modern office spaces and another Sh450.8 million to cater for Value Added Tax (VAT) refund to the US Embassy.

State Department for Micro, Small and Medium Enterprises Development was given Sh470.4 million for the implementation of Kenya Youth Employment and Opportunity Project (KYEOP) closure, National Treasury Sh405 million to cater for implementation of the East African Transport, Trade and Development facilitation project, while the state Department for ICT & The Digital received Sh873 million to support the regional transport, trade and development facilitation project (ICTA).

The report shows that a number of ministries received additional funding to cater for various needs.
The departments include the Ministry of Defense Sh200 million to support operations in response to El Nino rains and Sh1.5 billion for AIA under the Eastern Electricity Highway Project (Kenya Ethiopia Interconnector), Ministry of Energy and Petroleum Sh18.4 billion for stabilisation of petroleum pump prices for August-September while the Ministry of Roads and Transport got Sh500 million to facilitate payment of the pending bill for Mwache-Tsunza-Mtenza road.

The Department for Basic Education received Sh200 million for Wings to Fly funding under the Federal Republic of Germany.

Lion’s share

Others are State Department for Crop and Development Sh2.24 billion for procurement of maize drying and storage facilities and Sh500 million to pay the National Cereals and Produce Board (NCPB) for the National Food Reserve to cater for the purchase of excess maize.

The State Department for Medical Services got Sh290 million to cater for the Covid-19 outbreak and strengthen the National System for Public Health Emergency.

The report also shows that out of Sh1.4 trillion exchequer issues sent to various departments in the last six months, recurrent expenditure took the lions share of Sh1.23 trillion comprising Sh560.99 billion for Ministries, Departments and Agencies (MDAs) and Sh142.47 billion for county governments.

The report shows that state agencies only used Sh70.41 billion on development.

A review of the recurrent expenditure shows that Sh291.28 billion was spent on personnel emoluments, representing 38.6 per cent of the gross recurrent expenditure.

However, the amount does not include personnel costs for the National Intelligence Service and the Military.

Total grants/transfers to other government institutions was Sh346.62 billion, use of goods and services at Sh83.56 billion while subsidies amounted to Sh27.84 billion.

Adds the report: “During the reporting period, the Controller of Budget identified key issues and made recommendations to address them.

They included: delays in the release of exchequer to both MDAs and Counties, Overdrawn budget lines due to budget rationalization without considering expenditure already incurred, and a high level of public debt.”

 The top five spending institutions on recurrent expenditure include Teachers Service Commission (Sh163.74 billion), State Department for Education (Sh84.56billion), Ministry of Defense (Sh69.96 billion), National Police Service (Sh55.89 billion) State Department for Higher Education and Research (Sh42.69billion).
 The top 10 highest spenders on development expenditure in the last six-month include State department for Economic Planning (Sh27.72 billion), State Department for Transport (Sh20.28 billion), State Department for Roads (Sh17.01 billion), State Department of Water and Sanitation (Sh15.48 billion) and State department for Crop Development (Sh14.02 billion).

 On public debt as at December 31, 2023, the Public debt stock stood at Sh11.14 trillion, comprising Sh6.09 trillion (54.7 per cent) dues to external lenders and Sh5.05 trillion (45.3 per cent) dues to domestic lenders.

 The report notes that the public debt stock increased by 8.4 per cent from Sh10.28 trillion as of June 30, 2023 to Sh11.14 trillion as of December 31, 2023 with external debt recording the highest growth at 11.8 per cent while domestic debt recorded 4.5 per cent.