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Spend on projects hits record high in February

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Economy

Development spend hits monthly highest

The Treasury says Sh184.63 billion was spent on development in eight months through February. FILE PHOTO | NMG 

Spend on development projects hit the highest monthly levels in February, weeks after President Uhuru Kenyatta picked a team to monitor infrastructure expenditure.

The Treasury signed off nearly Sh51.99 billion towards projects being implemented by State ministries, departments and agencies (MDAs) in February, signalling increased disbursement following a slow start to the year.

This is Sh33.04 billion, or 174.35 percent more than the Sh18.95 billion average monthly disbursement in the seven months to January.

Mr Kenyatta on January 22 created a Cabinet committee to supervise and co-ordinate implementation of development projects with reporting structures spread down to the counties.

The National Development Implementation and Communication Cabinet Committee has been tasked to guide Mr Kenyatta on addressing emerging challenges and evaluating follow-up for resources to ensure proper use of funds and meeting of targets.

The team is led by Interior Cabinet Secretary Fred Matiang’i and deputised by his Treasury counterpart Henry Rotich.

Statistics released last Friday by Mr Rotich show Sh51.99 billion was channelled to capital projects, more than triple Sh15.71 billion spent in January, Sh28.58 billion (December) and November’s Sh16.49 billion.

Some Sh184.63 billion was spent on development projects in eight months through February, the Treasury data shows, Sh37.27 billion, or 25.29 percent, more than the corresponding period the previous financial year. The absorption of development budget was hit at the start of year after Mr Kenyatta froze implementation of new projects in July 2018 to complete ongoing works.

Higher spending on development projects such as roads, water, power plants, real estate and electricity transmission lines stimulates economic activities, helping to create job opportunities for the expanding unemployed graduate youth and grow government revenue, largely taxes.

Absorption of the development funds is likely to get further boost if lawmakers pass Public Finance Management (PFM) Amendment Bill which sailed through the second reading on February 14.

The bill seeks, among others, to empower the Parliamentary Budget Office (PBO) to monitor and evaluate government projects and programmes.

“Executive Order No. 1 of 2019 offers an avenue where government projects are monitored and coordinated by the Executive,” Mr Churchill Ogutu, a research analyst at Genghis Capital wrote in a note this month.

“We believe ex-ante evaluation of projects by PBO will help enhance viability and curb wastage of public funds.”

The spend in the July-February period accounts for 50.83 percent of the Sh363.22 billion budgeted for development projects this year ending June.



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