A third of Sh4.2 trillion national budget will go to waste or stolen

The annual budget process is an official ritual that Kenyans cannot avoid courtesy of the country’s established constitutional and democratic order. Over the years, the budget making process has become a mixed bag depending on which side of the feeding trough one stands on.

What is certain however, from various accountability frameworks, including audited government accounts, Controller of Budgets (CoB) reports, anti-corruption and civil society oversight, is that a significant amount of the appropriated funds is usually set aside for official waste and outright theft. With this in mind, the only question open for debate is: How much of the 2025/26 budget allocations shall  trickle down for the benefit of Wanjiku?

Conservative estimates from various credible sources have placed the amounts that go to waste or theft to be at least one third of the approved budget. To public governance practitioners, it is an open secret that while there is sluggishness on spending towards beneficial public goods and services, programs earmarked to either siphon funds or support official extravagance gets implemented with lightning speed.

From a technical point of view, the presentation of the budget highlights before the National Assembly on Thursday by Treasury Cabinet Secretary John Mbadi, is largely a ceremonial exercise for the house to receive the legal instrument that they must approve to grant authority for withdrawals from the Exchequer.

On Tuesday week, the Committee of Supply, which is the committee of the whole house, voted on the actual allocations to individual votes and spending programmes following the tabling of the Budget Appropriation Committee (BAC) report, in fulfillment of Article 221 of the Constitution. For the purpose of understanding the gist of this column’s analysis today, reference shall be made to key vote heads as contained in the BAC report that was approved prior to the formal presentation of the Appropriation bill.

On the brighter side, the BAC led by.Samuel Atandi did a good analysis and consideration of the public participation submissions made to it by heads of various sector committees, public forums held in sampled 11 counties and 14 written submissions made to it.

Understandably, most of the public discourse has leaned on the twin Finance Bill, that deals with the proposed tax measures.

Going back to the trilemma of our budgets, it is not possible for anyone to draw funds from public coffers without first planning and budgeting for it, except for monies drawn under Article 223 (famous for executive abuse to draw funds for questionable expenditures). Theoretically, this means that those that plunder our public coffers cleverly plan, budget for and execute their theft within the system.

It is on this understanding that it becomes plausible to ask: of the Sh4.23 trillion tabled before Parliament, how much of it is earmarked for waste and theft?

The BAC report seems to inadvertently leave trails of potential risks in their analysis. For practical reasons, it is not possible to list everything that there is in a single article. Therefore, we highlight a few of the approved votes that accountability advocates must monitor keenly.

First is the expenditure on consolidated fund services, that are not part of the Appropriation Bill that is usually tabled before the house. The amount voted for expenditure under this vote head as per the BAC report is estimated at Sh1.34 trillion. The bulk of the amount is set aside for public debt interest expense at Sh1.097 trillion, pension and salaries for constitutional offices Sh239.6 billion. The reasons to worry under this vote is because pension spending has been a grey area for several years and recent public complaints by the CoB on the loophole created by the Constitution that grants the executive power for Exchequer withdrawals under Article 223, outside the Appropriation Act.

Second is that within the energy, infrastructure and ICT cluster, the BAC approved appropriation of Sh95 billion from the Affordable Housing Fund, together with Sh69 billion from Road Maintenance Levy and Sh25 billion from Petroleum Development Levy. While the latter two levies have been with us over several budgets, it is the proposed spending from the Affordable Housing Fund that raises valid curiosity.

According to the BAC report, the Sh95 billion is set to defray partial cost for 215,221 affordable housing units, 80,909 social units, 94,368 student hostel beds, 8,000 hostel units, 23,672 prison and police houses and 10,033 for Kenya Defence Forces houses. Total amount allocated for these housing units is Sh119.8 billion

In addition, the committee seems to question interest of Sh4.2 billion from the funds invested in government Treasury bills. From the ongoing affordable housing projects, units completed per year are way too few compared to what has been projected for the 2025/26 financial year.

What miracle will the implementors of the program do to absorbed such astronomical allocations in a single financial year?

The third curious allocation is Sh58 billion set for the National Government Constituency Development Fund. The reason to worry about this allocation is premised on the High Court determination that the Fund is incurably unconstitutional that it must die on the stroke of the clock on midnight June 30, 2026. The understanding here is that the court allowed for only a grace period to wound-up ongoing projects.

MPs seem to read from the same page based on their aggressive attempts to entrench the fund in the Constitution. What then justifies such a huge allocation in a year the fund is supposed to be winding up? Does this have to do with advance front-rolling to mobilise resources for 2027 campaigns?

Other allocations to watch are around the Social Health Insurance Fund (SHIF), fertilizer subsidies, Hustler Fund and a new programme National Equipment Services Programme (NESP) to succeed the controversial Managed Equipment Supplies (MES) program.

On SHIF, Sh10 billion is set for coordination of Universal Health Coverage, same amount as that allocated to Chronic and Emergency Fund. The fertiliser subsidy programme takes Sh8 billion despite the fraud around the programme in the ending financial year.

Kenya Kwanza criticised and abolished the MES programme when they took over power, why has it become necessary now to bring the program back through the backdoor without proper public engagement and despite a pending bill of sh.6.5 billion for MES? The Hustler Fund analysis in the BAC report outrightly fails short of the Auditor General’s findings, raising questions as to whether Parliament was trying to sanitize it.

Finally, there are obvious vote-heads that seem to be non-touchable that fuel the comfort of big people holding state offices. For instance, Parliament approved for itself Sh48 billion against Treasury’s allocation of Sh42.5 billion. The Presidency budget is disaggregated to several spending units to conceal the total allocation, that is almost five times that of the Kibaki administration on his final year in office.

Still, with such astronomical allocation, the presidency has blown its entire budget within nine months each year, to become the biggest beneficiary of Supplementary estimates for three consecutive budgets.