How supplementary budgets water down main plan, alter projects

Over the current financial year, the budget for State House was initially set at Sh8.58 billion. This, however, ballooned to Sh17 billion in the supplementary budget that was tabled and approved by Parliament in April. 

Thus, while the budget for State House for the 2026/27 financial year has been reduced to Sh13.44 billion, analysts advise caution, noting that the spending for this and other state entities could go up in the coming months as the government starts budget implementation for the year.

Supplementary budgets, which regularise spending incurred by government without parliamentary approval, have been contentious and several times been the subject of scrutiny including a special audit by the Auditor General, while the International Monetary Fund (IMF) has also raised concerns.

There have been concerns that the mini budgets have, in the past watered down Kenya’s budget-making process, which is elaborate and people centred. The process started shortly after the beginning of the financial year in August, running through the year and culminating in the budget statement by the National Treasury Cabinet Secretary and debate on the budget estimates and the Finance Bill.

This months’ long process, according to observers, appears to be negated by supplementary budgets that have at times significantly altered spending plans and while subject to public participation, it is not as rigorous as the main budget.

Treasury CS John Mbadi recently conceded to the disruptive nature of supplementary budgets and said he plans to phase out mini budgets in the coming financial years. 

“We are trying to kill supplementary budgets. I am one person who believes that we should kill supplementary budgets. We used to have supplementary budgets as early as November or December," said Mbadi at a recent forum, noting that the early introduction of a mini budget would usually pave the way for subsequent supplementary budgets in the course of a financial year.

“If we can start by reducing the number of supplementaries… such that while we have been having three every year, we can start by reducing to two then to one, then we kill it. We  can make sure that we budget properly and everything is factored in.”

Analysts have noted that the supplementary budgets tend to relegate the main budget-making process to public relations exercise but also a formality to meet constitutional requirements s. The true picture of the budget emerges later as when Treasury the supplementary estimates are tabled in Parliament.

“Where the interesting bit is going to be is in the supplementary budget. That is what is going to give us the details on how the government is going to spend,” Steve Biko Wafula, chief executive Soko Analyst, said at a panel discussing this year’s budget. 

In the current financial year, the government introduced a Supplementary Budget that increased the overall budget by a massive Sh316.7 billion, bringing the total spending for the year that ends June 30 to Sh4.69 trillion from Sh4.3 trillion. The higher expenditures were despite underperformance in revenue collection, resulting in a higher budget deficit that grew by Sh221 billion to Sh1.15 trillion from Sh933 billion, plunging the country deeper into debt.

Notable in the mini budget was the doubling of the budget for the State House, which increased to Sh17 billion from Sh8.58 billion. State House had in the first six months of the financial year, nearly outstripped its annual allocation, spending SHH7.12 billion of the Sh8.58 billion it had been allocated.

In the the Supplementary Budget 1, there were also significant increase in allocations to other sectors, including security that received an extra Sh60 billion, education (Sh45 billion), affordable housing (Sh25 billion), agriculture (Sh17 billion) and health (Sh12 billion)

Observers say the government has exercised restraint this year going by experience in previous years. 

In the 2024/25 financial year, the government introduced a record three supplementary budgets. The first was submitted to Parliament early in the financial year in July 2024, which factored in the budget the revenue loss following rejection of the Finance Bill 2024 while the third came in June 2025, weeks to the end of the financial year.

The only other time that Kenya saw a third supplementary budget was over the 2019/2020 financial year. During the year, the Jubilee Administration submitted the second supplementary budget in April that regularised the first wave of Covid19 intervention and tax relief measures. It later submitted Supplementary III in June that was aimed at sourcing funds to finance an economic rescue plan after Covid-19 broke out locally in March 2020. The mini budget reallocated billions of shillings from development projects to fund acquisition of hospital beds and emergency medical supplies. The budget was tabled in Parliament in June 2025, rather late in the financial year, and approved 

Government spending without parliamentary approval and seeking this approval later has always been problematic through the years, with the National Assembly and the International Monetary Fund (IMF) raising concerns. The number of supplementary budgets rose during Jubilee’s second term, where on average there were two mini-budgets.

The National Assembly’s Public Accounts Committee (PAC) had in April 2023 requested the Auditor General to undertake a special audit on all expenditure incurred under Article 223 of the Constitution for the financial year 2022/2023. 

This was after the government spent an alarmingly high Sh147 billion under Article 223 during the 2022/2023 financial year. The funds were spent on subsidies for fuel, flour and fertilizer as well as provision for relief food and enhanced security operations. This was in the months tending to the August 2022 elections as the government wooed voters. 

The expenditure also included a controversial Sh6 billion that was used for the purchase of  a 60 per cent stake in Telkom Kenya  from Helios Investment Partners and saw ownership of the telco revert to government. The deal, concluded in September 2022, was however reversed in 2023  by the Cabinet after public outcry. 

Earlier, IMF had also required Kenya to carry out a similar audit as among the conditions for the Extended Credit Facility Program and required the Auditor General to carry out a special audit on the supplementary budget expenditure over a three year period to 2023.

The audit process was expected to provide proper accountability and transparency on the supplementary budget spending by various Ministries, Departments and Agencies while also establishing the potential risks.

In its report in November 2023, the office of the Auditor General found an increasing trend where the government was spending more under Article 223.

The report noted that “there has been a gradual increase in requests for funding under Article 223 of the Constitution. From an amount of Sh1.1 billion requested in the 2014/15 financial year to Sh147.39 billion in the 2022/23 financial year, representing a percentage increase of 13,299 per cent over the nine years”.

The Auditor General noted that the number of the mini budgets has increased, initially going up to two every financial year to accommodate higher spending levels.

“The government has passed two supplementary budgets in each of the last nine financial years,” said the Auditor General in the report, noting an exception was in the 2019/20 financial year when there was a third supplementary budget. 

The Auditor General also noted the nonchalant manner in which Treasury and also MDAs disclosed information to Parliament when seeking approval after the spending as well as the Controller of Budget. The report details instances where five MDAs spent a combined Sh7.9 billion but this was not disclosed  in the information submitted by Treasury. It also noted that records maintained at Treasury differed with the actual expenditure incurred by MDAs, a pointer that MDAs at times tend to incur over and above what Treasury approves under Article 223.