18 May 2018

Kenya: Shock as 14 Counties Spend Zero on Projects

Photo: Daily Nation
Agnes Odhiambo, Controller of Budget.

Fourteen counties spent nothing on development in the six months to December, hurting job creation and infrastructure projects in the devolved units.

Controller of Budget Agnes Odhiambo, in the half year report for the 2017/18 financial year, singled out Embu, Garissa, Kirinyaga, Kisumu, Meru, Nakuru, Nandi, Nyandarua and Nyeri as the affected counties.

Others are Siaya, Taita-Taveta, Tharaka-Nithi, Vihiga, and West Pokot.

TREASURY

Development spending is critical to building infrastructure like roads and sewerage and putting money in private hands through demand for raw materials, which ultimately creates new jobs.

Ms Odhiambo attributed the slow absorption of development funds to delays in disbursement of funds by the National Treasury to the counties.

"During the reporting period, the Treasury did not fully adhere to the Disbursement Schedule, which affected execution of budgeted activities," she said.

The poor performance could also be linked to the long electioneering period that saw the country conduct two presidential elections in under two months.

While Ms Odhiambo did not identify the political instability as an underling factor to the poor performance, it has been cited by most governors.

During the six- month window, counties spent Sh11.4 billion on development projects, down from Sh35.7 billion in similar period a year earlier.

The central government and counties remain the biggest buyers of goods and services and reduced spending has an effect on economic growth.

Cement makers, steel manufacturers, contractors and the thousands of workers who are employed in infrastructure projects all benefit from public spending and are likely to feel the pinch of the slowdown.

Kilifi was ranked first after recording the highest expenditure on development activities at Sh1.65 billion, followed by Kiambu and Kakamega at Sh856 million and Sh844 million respectively.

The report also raised a red flag over the dwindling revenue collected by counties staring at an annual local revenue target of Sh55 billion. The counties only managed to collect Sh9.9 billion which is 18.1 per cent of the annual target.

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