MPs have for the first time poured cold water on President Uhuru Kenyatta’s legacy projects even as intricate details emerged of graft gobbling billions of shillings within the Jubilee administration.
In a bold report to Parliament, the Budget Committee expressed doubt Treasury’s budgetary allocations to the Big Four agenda are enough to achieve any meaningful outcome.
The lawmakers, a majority from Kenyatta’s ruling party, came to the conclusion just days after it emerged that Kenya is spending 68 per cent of its revenue to service loans.
“The concern is whether these expenditures provided are enough to achieve any meaningful outcome and whether the implementation are fully equipped/empowered for the task ahead,” the Budget and Appropriations Committee chaired by Kikuyu MP Kimani Ichungwa said. It delivered its report on the Budget Policy Statement and Debt Management Strategy.
President Kenyatta had prioritised food security, affordable housing, manufacturing and universal healthcare as his legacy projects.
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But the mega capital projects, most of which were at the centre of the Jubilee re-election campaign, have been hit by unprecedented scandals.
The latest is the Sh21 billion sunk into the Arror and Kimwarer multi-purpose dams meant to generate hydropower complete with transmission, as well as irrigation.
The one-million-acre Galana-Kulalu irrigation project has collapsed due to squabbling between the contractor and the government.
In a stinging criticism of Treasury mandarins led by Cabinet Secretary Henry Rotich, the 27-member committee said there is no major shift in expenditure allocations to the ministries and agencies that should deliver the Big Four dream.
“This indicates that the distribution of resources may not necessarily be geared towards actualising the Big Four plan,” the committee said.
Gatundu South MP Moses Kuria recently dismissed Kenyatta’s housing plan and asked how he intends to deliver 500,000 affordable houses in three and half years.
According to Kuria, Kenyatta would have to deliver 250 houses every day, an economic and engineering miracle, to realise his pledge.
“We have 42 months left in the current term of the Jubilee government. To build 500,000 houses within the 42 months left, we need to build 11,905 houses per month from today going forward,” he said in January.
Apart from a cash crunch for future projects, the government is also faced with a backlog of stalled capital projects that need about Sh295 billion to complete. The committee expressed reservations, saying the National Treasury failed to develop a master plan to spell out implementation of the plan.
The master plan was to include a results matrix for the resource allocation as well as a monitoring and evaluation framework, making i easier to monitor progress.
“This has not been implemented as recommended by the committee in 2018. Such a blueprint would have been useful in guiding resource allocation as well as for evaluation of progress,” Ichungwa said.
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The budget team further asked the House to query how existing action plans are being handled in the context of the Big Four agenda.
“There already exist some action plans without clear coordination and overarching framework…some important interventions may fail to be implemented,” it said.
Ichungwa’s team has presented their observations to the House for discussion, then the plenary’s decision would inform this year’s budget.
The hope by Kenyatta’s administration to anchor the Big Four in the budget is in trouble, as only Sh650 billion has been projected as development expenditure in the financial year 2019-20.
On December 12 last year, the President outlined the importance of his Big Four economic blueprint, saying it was to be fully entrenched in the government’s day-to-day activities.
However, the government is still grappling with a bloated wage bill and recurrent expenditures projected to swallow up Sh1.2 trillion.
Education will take the lion’s share of the proposed budget at 26 per cent, followed by Energy, Infrastructure and ICT at 22.3 per cent.
Public Administration will take up 14 per cent, while Governance —which includes the Judiciary — will be apportioned 11.2 per cent.
“Critical sectors that are the drivers of the Big Four agenda such as agriculture, rural and urban development under which manufacturing, housing, and food security are domiciled, are the least funded at Sh83 billion,” the Ichungwa team says in its report.
“This is despite the promise under the BPS that the resource allocation would be aligned to projects and programmes that are the drivers of the Big Four agenda.”
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The committee has recommended county governments be involved in the Big Four plan, as some of projects fall under devolved functions — agriculture and health.
“Currently it is not clear how the national government is coordinating with county governments to implement the Big Four plans. Failure to include the county governments will result in poor implementation of the projects,” the MPs warned.
But counties may also suffer budget cuts having been allocated Sh371.6 billion, about Sh5 billion less than what the devolved units received in 2018-19 financial year (Sh376.4 ).
On the stalled projects, MPs further warned that 56 per cent of them are tied to agriculture, rural and urban development — a Big Four pillar.
“So long as these projects remain stalled, they will not yield any returns to the economy,” the team added.
It further cast doubt on whether measures taken by the Kenya Revenue Authority would yield meaningful results given poor revenue performance. The measures were to eliminate dumping, ensure tax compliance by agencies and individual taxpayers, as well as property developers.
“The committee is concerned that the reforms were referred to in the previous BPS documents, but there has never been a report on the progress achieved,” Ichungwa team said.
The lawmakers warned that the country may not meet its revenue target of Sh1.87 trillion, including appropriation in aid, as the reforms’ impact has not been quantified.
“Given the tendency of revenue to under-perform in the previous years, it is important to ensure the revenues projected for 2019-20 are realistic,” the report said.
Apart from revenue worries, the government is also faced with a debt crisis that is eating up billions of its tax collections. MPs warned that the country is “facing significant debt refinancing pressure”, projected to rise to Sh1.04 trillion in the next one year.
In the budget proposal, the Presidency will get Sh9.2 billion, Interior (Sh136 billion), Correctional Services (Sh26.9 billion), Immigration and Citizen Services (Sh3.2 billion), Devolution (Sh9.1 billion), Early Learning (Sh101 billion), University Education (Sh103 billion), while Post Training will get Sh165.5 billion.
The proposed allocation would see the National Treasury get Sh107.3 billion, Planning (Sh52.9 billion), Public Works (Sh4.5 billion), Water and Sanitation (Sh56.6 billion), Environment (Sh15.8 billion), Lands (Sh5.7 billion), Livestock (Sh6.7 billion), Crop Development (Sh28.5 billion), Fisheries and the Blue Economy (Sh4.1 billion), Irrigation (Sh8.2 billion), Agricultural research (Sh4.6 billion) and Cooperatives (Sh1.6 billion).
The State department for Tourism will get Sh4.4 billion should MPs approve the proposal, Wildlife (Sh8.9 billion), Public Service (Sh8.1 billion), Youth (Sh18.2 billion), Gender (Sh4.3 billion), EAC (Sh586 million), Northern Corridor (Sh7.8 billion), State Law Office (Sh5.7 billion), CRA (Sh474 million), Public Service Commission (Sh1.2 billion), SRC (Sh630 million), TSC (Sh253.7 billion), NPSC (Sh736 million), Auditor General (Sh5.6 billion), Budget Controller (Sh723 million), CAJ (Sh565 million).
From talks with the Commission on Revenue Allocation and the Council of Governors, it turns out that government will still spend more cash on salaries.
The committee has, therefore, proposed spending caps for Parliament at Sh39 billion, Judiciary (Sh18.9 billion), and the Executive at Sh1.8 trillion. For counties, the government, through conditional grants, will avail cash for lease of medical equipment at Sh6.2 billion, Level 5 hospitals (Sh4.3 billion), County headquarters supplement (Sh485 million), Village polytechnics (Sh2 billion), Fuel levy (Sh8.9 billion), Loans and grants (Sh38.7 billion).
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