Kenya government loses Sh500 billion to wasteful expenditure

By James Anyanzwa

NAIROBI, KENYA: Taxpayers risk losing about Sh492 billion of the 2013/2014 Budget.

A forum of accountants noted that avenues through which funds are lost include State wastage and flawed procurement contracts.

The money is nearly twice the total amount allocated to infrastructure development (Sh288.5 billion) in the 2013-14 budget.

Speaking at a post–budget analysis forum organised by the Institute of Certified Accountants of Kenya (ICPAK) in Nairobi yesterday, Dr Thomas Kibua, a senior economist at the African Development and Economic Consultants said the Government loses up to 30 per cent of its annual budget on workshops and foreign trips.

Other means through which money is lost are consultancies and inflated public contracts — often irregularly awarded to rogue and briefcase contractors.

“The State can be a wasteful entity. We need to audit and monitor Government expenditures at all times,” Kibua said. 

“A lot of money is often wasted on seminars, workshops and flawed procurement.”

 The latest revelation comes barely a fortnight after the Parliamentary Budget and Appropriations Committee directed the National Treasury to cut spending on hospitality supplies, foreign travel, printing and advertising. These non-core expenses consume a whopping Sh1.3 billion.

The committee headed by Mutava Musyimi had raised reservations about the huge amounts of money allocated to non-essential items such as external travel, hospitality and flowers among others.

Increased borrowing

ICPAK Chairman Benson Okundi called for financial discipline in Government as a way of cutting deficits rather than borrowing, which he termed as “unsustainable and burdensome to taxpayers”.

“As an Institute, we do not encourage any further borrowing. We are already overburdened as a country,” said Okundi, adding that prudent financial management is a more practical and affordable solution to deficits.

Treasury Cabinet Secretary Henry Rotich on Thursday last week unveiled a Sh1.64 trillion budget for the 2013/2014 financial year with a massive fiscal deficit of Sh329.7 billion.

To plug the deficit, Rotich said Treasury would be seeking foreign financing (Sh223 billion) as well as well as resorting to domestic borrowing to the tune Sh106.7 billion — a move Okundi described as ill-advised and designed to fail the economy.

Kenya’s Gross Domestic Product grew by Sh141.4 billion to Sh1 trillion on April 5, 2013 from Sh858.8 billion at the end of June 2012.

Total public debt rose to Sh1.8 trillion by December 2012 — leaving every Kenyan including babies Sh45,000 indebt.