SECTIONS
Premium

How President Uhuru Kenyatta spent Sh23tr over the years

President Uhuru Kenyatta at Mbita Bridge, Kisumu County, January 2022. [PSCU]

By the end of June next year, the last coin of the Sh23 trillion budgetary outlay under President Uhuru Kenyatta’s 10-year rule will be spent.

His successor after the August 9 General Election will have the unenviable task of implementing the last of his Sh3.31 trillion spending plan for the country from this amount.

In all likelihood, the task will either fall on his deputy, Dr William Ruto, an ally-turned-rival, or former Prime Minister Raila Odinga, a rival-turned-ally.  

On April 7, National Treasury Cabinet Secretary Ukur Yatani is expected to read the Sh3.31 trillion Budget for the upcoming 2022/23 financial year, which kicks in on July 1.

The Budget is already a subject of horse-trading between the different political factions who would like to shape it to their liking just in case they take the reins of power on August 9.

By end of June next year, President Kenyatta’s cumulative budget for the 10 financial years he has been at the helm will amount to Sh23 trillion.

Although he will have little say in the implementation of the Budget for the 2022/23 financial year, his administration is responsible for crafting it.

If you remove the upcoming financial year ending June next year, which will be implemented by the next government, Kenya’s fourth President’s total budget in nine financial years drops to Sh19.7 trillion.

The Jubilee administration’s first Budget, read by the then National Treasury Cabinet Secretary Henry Rotich, was in June 2013.

Of the Sh23 trillion, most of the spending (Sh14.5 trillion) is for recurrent activities such as paying wages, repaying interest on loans, travelling, hospitality, printing, advertising and maintenance.

The government has struggled to control recurrent spending, with the International Monetary Fund (IMF) now asking Treasury to control the rising wage bill by freezing some of the collective bargaining agreements, removing ghost workers from its payrolls and requiring civil servants to start contributing to their pensions.

IMF is also pushing for the restructuring of inefficient State corporations, in what could lead to job losses as some departments will be merged and others shut down.

The logo of the International Monetary Fund (IMF) at the organization's headquarters in Washington, DC, May 16, 2011. [AFP]

Spending on interest payments and wages has constituted more than half of the recurrent spending, a worrying trend in the last nine years as this has come at the expense of capital-generating projects aimed at helping grow the economy, creating jobs and reducing poverty.

At Sh3.7 trillion, the funds used for interest payments is more than what has been allocated to counties over the 10 years. By June next year, counties are expected to receive a total of Sh3.2 trillion.

Interest payments as a percentage of total revenue have increased from 12 per cent in the  2013/14 financial year and are expected to hit 28 per cent by the end of the next financial year.

The sharp growth in interest payments is due to the contraction of expensive commercial loans such as the Eurobond, syndicated loans and some of the Chinese loans. These loans have interest rates as high as 10 per cent, shorter grace periods and tenors.

President Kenyatta’s administration has come under sharp criticism for its binge-borrowing, which saw the country’s debt stock rise to Sh8.2 trillion by the end of June 2021 compared to Sh4.05 trillion when he came to power in April 2013.

Should the borrowing plans be included in the Budget Policy Statement 2022, then Mr Kenyatta’s government will have borrowed a total of Sh6.9 trillion, from domestic and foreign investors.

However, the Head of State has defended the binge-borrowing, saying the money has been used to build roads and seaports, as well as to modernise the railway network and to carry out energy projects, among others.

His administration will have pumped close to Sh5.5 trillion into development projects, including railways, roads, ports, dams, substations and bridges.

In his last state of the nation address in November last year, Mr Kenyatta also noted that his administration had revived projects that had been abandoned by earlier regimes such as the metre-gauge railway from Nairobi to Nanyuki and the Kenya Meat Commission and fish landing site.

The Standard Gauge Railway (SGR), Uhuru’s largest project, has gobbled up close to Sh600 trillion, with the line running from the port city of Mombasa through Nairobi to Naivasha.

The modern railway was supposed to extend to Kisumu and finally to Malaba, but that has since been put on hold. Instead, the government has upgraded the metre-gauge railway from Naivasha to Kisumu.

Other major projects that the Jubilee administration has completed during this period include the Sh45.8 billion Lamu Port and several roads.

The Standard Gauge Railway (SGR), Uhuru Kenyatta’s largest project, has gobbled up close to Sh600 trillion. [Kipsang Joseph, Standard]

President Kenyatta insists he has more than doubled the number of tarmacked roads around the country.

“There are some counties which have received their first tarmacked roads since independence during my administration,” he said in his address, adding that the roads have been able to open up the country and spurred business investments.

The President made a strong case for his economic strategy over the last nine years that has been characterised by massive borrowing to finance mega infrastructure projects.

He explained that since 2013, he has relied on the strategies of economic acceleration and the “Big Push Investments” that have significantly grown the economy and improved the living standards of Kenyans.

This is by building roads, seaports, issuing title deeds and connecting more Kenyans to the grid. 

The economy, which was adversely affected by Covid-19 pandemic, seems to be on a recovery path, and Mr Yatani has come up with a third economic stimulus package, which the Parliamentary Budget Office, a think-tank for legislators, insists is unnecessary.

The size of the national cake, or the Gross Domestic Product (GDP), has more than doubled since 2013. That has since pushed Kenya into a low middle-class country.

From being ranked 12th eight years ago, the country is now the sixth wealthiest country in Africa, though much of this is due to the review of the country’s structure of the economy, which has been carried out twice during President Kenyatta’s two terms.

He has insisted that he has built roads 15 times faster than the previous three administrations. 

Other projects that his administration has accelerated include the power grid and devolution of functions and resources to regional governments within one year instead of three as envisaged in the Constitution.

Mr Kenyatta also spoke of “Big Push Investments”, including reviving what had initially been abandoned by previous governments as dead capital.