The National Treasury incurred Sh54.68 billion in unbudgeted public expenditure towards the end of President Uhuru Kenyatta’s term.
This raised questions about the fiscal discipline of a country that is grappling with liquidity issues and a huge public debt, on a day when MPs accused the National Treasury of overstepping its mandate in the budget-making process.
The expenditure worsened the issue of pending bills, making the budget deficit a moving target.
Documents tabled in Parliament show the Treasury made disbursements for, among others, the maize flour and fuel subsidies, an undisclosed Telkom Kenya payment and building of a military research hospital.
It disbursed Sh810 million to the State House, Sh2.2 billion for building the military research hospital, Sh4.5 billion for the discontinued maize flour subsidy.
Another Sh9.45 billion was allocated for road construction and Sh6 billion to Telkom Kenya for reasons that were not disclosed in the documents tabled in Parliament on Tuesday.
The Constitution requires the Treasury to table a mini-budget two months after withdrawing funds from the Consolidated Fund without the approval of MPs—whose term ended on July 9.
The Sh23 billion is part of the Sh54.6 billion it had committed to withdraw from the government’s main account without parliamentary approval.
“Already the Treasury has invoked Article 223 of the Constitution that allows them to spend money without the approval of Parliament. They have approved the withdrawal of Sh45.67 billion out of which Sh23 billion has been paid out,” Martin Masinde, the acting director of the Parliamentary Budget Office (PBO), told MPs.
“This is coming just two months into the new financial year. They now want Parliament to regularise the expenditure including salaries which is not an unforeseen expenditure.”
The Treasury now wants Parliament to approve the wired cash in line with the Constitution.
The revelations come amid complaints by key allies of Dr Ruto that they inherited a broke government with no cash at the Treasury.
Deputy President Rigathi Gachagua has said that it will take them about two to three months to get the economy back on track.
Although Dr Ruto was the incumbent Deputy President, former President Uhuru Kenyatta had thrown his weight behind opposition leader Raila Odinga, triggering a vicious campaign for the top job.
The Supreme Court unanimously upheld the election of Dr Ruto as President, rejecting several petitions, including one lodged by Mr Odinga and his running mate, Martha Karua.
The seven-judge bench said that the petitioners failed to prove claims that the polls had been rigged.
Dr Ruto was sworn in as Kenya’s fifth president on September 13.
He will have to tackle a surge in food and fuel prices, high unemployment and rising public debt used to finance development over the past 10 years under his predecessor.
PBO, a unit of Parliament that advises lawmakers on financial and budgetary matters, says the Treasury is yet to disburse Sh8.1 billion to schools, Sh2.8 billion to State House, Sh1.3 billion for the military hospital and Sh16.5 billion for fuel subsidies from the unapproved allocation.
“This Article of the Constitution has been abused by the Treasury. What happens now is that the Treasury withdraws money to fund what is not budgeted and comes to Parliament to rubberstamp the expenditure?” Mr Masinde asked.
He asked the 13th Parliament to come up with a law that will force the Treasury to first approach Parliament and discuss the intention of expenditures before disbursing the money.
Former President Kenyatta on August 31 presided over the groundbreaking ceremony for the construction of a 700-bed capacity Kenya National Research and Referral Hospital (KNRRH) at the Kabete Army Barracks, Nairobi County.
The energy regulator scrapped the subsidy on petrol a day after Dr Ruto said subsidies were unsustainable, in a move that could add to the upward pressure on inflation.
It for the first time in a year fully withdrew a Sh20.5 a litre subsidy on petrol that will be sold in the month to October 14 and halved the reliefs on kerosene and diesel to Sh26.25 and Sh20.82 respectively.
Dr Ruto said in a speech after being sworn in that subsidies had been costly and prone to abuse, including causing artificial shortages of the very products being subsidised.
The decision to scrap the subsidies will ease the marketers’ cash flow problems following delays in getting compensation, leading to arrears of nearly Sh50 billion.
The President said the maize subsidy had gobbled Sh7 billion in one month with no impact on the reduction of the cost of food.
