Roads lose Sh13.9 billion in President Ruto’s second mini-budget
The construction of the Kenol-Sagana-Marua highway at Kakuzi area on May 31, 2022. The mini budget has also slashed allocation to for dualling of the Thika-Kenol-Marua Lot 2 (Sagana-Marua Section Section) by Sh1.5 billion.
Budgetary allocation for major infrastructure projects has been slashed by Sh13.9 billion in President William Ruto’s second mini-budget, which has also shifted resources from development to recurrent spending.
This has affected dozens of road projects with the biggest loser being the Horn of Africa Gateway Development Project which has been docked Sh2.3 billion in the latest the second supplementary budget.
This is a further cut from the Sh3.7 billion that the road, which aimed at enhancing connectivity between Kenya, Somalia and Ethiopia, was subject to in Dr Ruto’s first supplementary budget in January.
Former President Uhuru Kenyatta, who splurged a lot of money on mega infrastructure, had earlier allocated the project Sh9.97 billion.
The second supplementary budget, which comes less than two weeks to the end of the current financial year, has also slashed allocation to for dualling of the Thika-Kenol-Marua Lot 2 (Sagana-Marua Section Section) by Sh1.5 billion.
Dualling of the KenolSagana section of the same road has lost Sh1 billion in allocation even as resources were shifted to recurrent spending such as salaries.
Several other road projects have seen their budgets cut by a total of Sh6.87 billion in a mini-budget that has cut total development spend by Sh39 billion.
So far, the Kenya Kwanza administration has been able to reduce its budget deficit, but mostly it has been at the expense of development projects with most projects being put on the ice.
A cash crunch has forced the government to reduce development spending while shifting resources to recurrent expenditure, especially payment of interest which has ballooned due to the weakening shilling.
Development spending in 2022
The World Bank, in its latest Kenya Economic Update, noted that investment is estimated to have contracted in 2022 in line with an 11 percent year-on-year decline in development spending in 2022 on fiscal consolidation measures.
“To support fiscal consolidation, the government has committed to contain spending pressures. Much of the adjustment fell on development spending, redirecting resources from inactive investment projects to focus on completing existing projects, reduced funds for foreign-financed projects, while slowing down or freezing of new projects,” said the World Bank.
In the first supplementary budget, the transport department was the biggest loser with the new government trimming its budget by Sh47.29 billion.
However, allocation to roads has since been increased in the Financial Year 2023/24, with infrastructure chosen as one of the enablers of Dr Ruto’s Bottom Up Economic and Transformation Agenda (BETA).
“The National Treasury is in the process of developing a 10-year infrastructure plan that will be cross-cutting across various Ministries, to support delivery and prioritisation of projects,” said Professor Njuguna Ndung’u, the Cabinet Secretary for National Treasury and Economic Planning in his budget speech.
