LEGACY PROJECT CRISIS

How cash crunch could derail Uhuru’s Big Four

The National Treasury is yet to release Sh153.38 billion for development

In Summary

• President Kenyatta’s key development projects have been hit by a cash crunch that threatens to stall their implementation.

• The crisis has also affected  operations of the 47 county governments that depend on the funding by the National Treasury. 

President Uhuru Kenyatta commissions 114km Garsen-Lamu road.
LEGACY PROJECTS: President Uhuru Kenyatta commissions 114km Garsen-Lamu road.
Image: PSCU

President Uhuru Kenyatta’s Big Four legacy projects have been hit by a cash crunch that threatens to stall their implementation.

The crisis has also slowed the operations of the 47 county governments that depend on the funding by the National Treasury to run nearly everything.

A report on the status of cash releases for development and the counties gives a grim picture of government’s financial soundness and its ability to fulfil its promises.

The report obtained by the Star from the office of Controller of Budget Margaret Nyakango shows the Treasury is yet to release Sh153.38 billion to government departments for development, with only one month left to the end of the financial year.

This is the equivalent of 35.34 per cent of the total development vote, Sh433.89 billion for ministries, departments and agencies (MDAs) for the current financial year.

This could spell doom for the President’s legacy projects in the umbrella of the Big Four agenda, with only 14 months to the end of his term.

"It [delayed releases] clearly signals a cash crunch. However, there is about $400 million (Sh43 billion) of IMF funds which are incoming imminently which might alleviate the issue. The takeaway is the development budget is set to feel the pinch at the expense of the recurrent expenditure," economist Aly-Khan Satchu said.

The situation is the same for the counties, which are yet to receive Sh110.12 billion or 29.47 per cent of their annual allocation of 373.58 billion, as at Thursday.

Governors, through the Council of Governors, have deplored the perennial delays by the Treasury transferring funds to the counties, saying the situation was hurting services and stalling projects.

“This delay has continued to derail our response measures to the Covid-19 pandemic, payments of pending bills and service delivery to Kenyans. As a matter of urgency, we call upon the National Treasury to immediately release these funds counties,” CoG chairman Martin Wambora said.

However, the Treasury has released as much as 82 per cent or Sh894.45 billion for recurrent expenditure.

Treasury CS Ukur Yatani has in the past admitted cash problems in government following the dwindling revenue collection by the Kenya Revenue Authority due to Covid-19.

According to the report, the department of infrastructure, which implements some of the big projects, has received Sh65.34 billion out of an annual allocation of Sh69.95 billion.

The ambitious programme covers food security, affordable housing, manufacturing and health care.

State department of Transport has received Sh15.02 billion out of Sh21.58 billion, Housing and Urban Development has received Sh14.35 billion out of Sh22.92 billion, while Public Works is yet to get Sh114.47 million of the 589.47 billion it was allocated for the year.

The four departments, domiciled in the Ministry of Infrastructure, Transport, Public Works, Housing and Urban Development, are the drivers of the Big Four projects that the Jubilee administration rolled out.

They include the development of Mombasa port, the National Housing Development Fund and the Nairobi Commuter Railway, Kenanie Leather Park and Konza Techno City.

The Ministry of Health, which is supposed to oversee the roll out of the Universal Health Coverage, has received Sh17.25 billion against an annual vote of Sh40.17 billion.

In 2018, the government launched the UHC to provide all 47 million citizens with affordable health care by 2022.

But the programme has been hampered by a costly roll out.

The Ministry of Agriculture, Livestock, Fisheries, Crop Development and Cooperatives is yet to get Sh14.70 billion.

The CS Peter Munya-led ministry is charged with ensuring the country is food secure. It was allocated Sh29.09 billion but has only received Sh14.37 billion as at Thursday.

The Ministry of Trade and Industrialisation has received Sh2.88 billion against an annual allocation of Sh4.28 billion, the report read.

The giant Ministry of Education is yet to receive Sh6.90 billion with barely one month to the end of the financial year.

The Ministry of Water, Sanitation and Irrigation has received Sh21.83 billion against Sh34.48 billion; the Lands and Physical Planning Ministry has got Sh2.29 billion compared to Sh3.59 billion it was allocated for the year.

The cash crisis hits when the President seems to be in a mad rush to complete the projects ahead of his retirement, or at least get them well underway. Uhuru has launched a dozen of projects in recent weeks.

On Wednesday, Uhuru launched a Sh300 million abattoir with a capacity to slaughter 12, 000 goats and 6,000 sheep a day.

On Monday, he presided over the launch of the refurbished Kenya Meat Commission factory. Last Thursday, he launched the Sh310 billion Lamu port.

“When complete, the Sh310 billion port will have 32 berths, 29 of which will be financed by the private sector, making it the largest deep water port in the Sub-Saharan Africa,” he said during the launch.

On the same day, he launched the 114km Garsen-Witu-Lamu road that will facilitate movement of cargo in and out of Lamu port.

According to the Controller of Budget, the department of Petroleum has received Sh800.71 million against Sh8005.70 million; the department of Tourism has got Sh2.15 billion against Sh3.45 billion while that of Wildlife has received Sh393.66 million against Sh444.25 million.

The department of Interior and Citizen Services has so far received Sh3.43 billion against an annual budget of Sh3.77 billion; Devolution department has received Sh275.65 million against Sh2.80 billion.

The cash crunch has not spared the Presidency. According to the report, the Presidency has only received Sh3.9 billion out of Sh7.49 billion this financial year.

(Edited by V. Graham)