Late disbursements hurt FY2023/24 half year budget spending

 

Low budget absorption rates continues to stalk the government with development vote lagging recurrent budget.

The Controller of Budget (CoB) report for the first half of 2023/24 fiscal year shows the government only spent a quarter of its development budget in the period between July and December.

In the period under consideration, the government spent a total of Ksh 1.64 trillion which is 36.1pc of the revised gross budget estimates of Ksh 4.5 trillion.

According to the report, the education sector was the biggest spender, with Ksh 308.2 billion already disbursed out of its total allocation of Ksh 690 billion.

In the period under review the exchequer released Ksh 142 billion to the counties. CoB is also raising concerns with the high numbers unbudgeted items being tabled by ministries and state agencies. In the six months to December 2023, ministries and departments sought additional funds totaling Ksh 51 billion.

These includes, Ksh 500 million for the purchase of E-Passport booklets, Ksh 1.5 billion for the KICC facelift, Ksh 660 billion to cater for settlement of Mau Forest evictees as well as Ksh 700 million for the construction of a modern Presidential dais at the State House gardens.

However, only Ksh 3.3 billion was disbursed piling pressure on the pending bills owed to contractors. The stock of public debt increased by 8.4pc from Ksh 10.28 trillion as of June 30th 2023 to Ksh 11.14 trillion as of December 31,2023.

This was driven by a spike in the portfolio of external debt which accelerated by 11.8pc on account of a weak shilling.

The government disbursed a total of Ksh 598 billion towards public debt. External debt servicing amounted to Ksh 238 billion while domestic debt repayment was recorded at Ksh 360 billion.

The office of the controller of budget is advocating for the timely release of exchequer funds and strict compliance with the set public debt ceiling to curb further growth in public debt.

By Regina Manyara