The Foreign Affairs Ministry sought Sh523.8 million to support former Prime Minister Raila Odinga’s campaign, as he ran for the African Union Commission (AUC) Chairperson position, in line with the foreign policy of Kenya, 2024.

The Controller of Budget (CoB), Margaret Nyakang’o, has, however, said in the Budget implementation review report of the first nine months for Financial Year 2024/25, that her office approved Sh216.3 million.

The initial amount was approved by the National Treasury on November 14, but CoB approved the Sh216.3 million on February 5, just about two weeks before the AUC elections date.

This came as the third quarterly report revealed that while the State agencies requested additional funding amounting to Sh48.8 billion, Nyakang’o only approved Sh42.22 billion.

She also said that the State House sought Sh1.5 billion to cater for utilities, rent, local presidential visits, hospitality services, fuel expenses, and maintenance of motor vehicles, an amount approved by the National Treasury on February 27, and the CoB approved Sh1.1 billion on diverse dates.

CoB’s first approval of Sh160.6 million was made on February 28, the second one of Sh401.6 million on March 7, the third one of Sh221.1 million, and the last one of Sh374.4 million on March 19.

“Article 223 of the Constitution allows the national government to access additional funding during the budget implementation by spending money that has not been appropriated if the amount appropriated for any purpose under the Appropriation Act is insufficient or a need for unbudgeted expenditure arises for which no amount has been appropriated, or money has been withdrawn from the Contingencies Fund,” Nyakang’o has explained.

“During the first nine months of FY 2024/2025, the Controller of Budget authorised a total of Sh42.22 billion under article 223 of the Constitution,” she added.

She said that all the affected additional funding was regularised in Supplementary II budget estimates as required by Article 223 (2) of the Constitution, except for Sh1.24 billion disbursed by the World Bank and spent by the State Department for Social Protection and Senior Citizen Affairs under the Kenya Social and Economic Inclusion Project.

At the same time, she cited budget implementation challenges, which included the accumulation of significant pending bills, which stood at Sh511.75 billion by March 2025, limiting cash flows and affecting suppliers’ operations, especially SMEs.

She also said there was low revenue outturn, with only 62 per cent of the annual target collected in the first nine months, occasioning delayed disbursement of funds and low absorption rates across MDAs and County Governments.

At the same time, she said there was irregular reliance on Article 223 of the Constitution to fund existing government programmes and settle predictable obligations, indicating weaknesses in the budget formulation process.

The CoB has also said that in-year changes to programme output targets undermined performance tracking, while delays in completing multi-year development projects further hindered effective budget execution.

To address the challenges, the Controller of Budget has recommended that the National Treasury fast-tracks the verification and settlement of pending bills and adopt more realistic revenue projections to reduce reliance on borrowing.

“There is a need for improved fiscal planning and enhanced revenue collection, particularly from Appropriations-in-Aid. To strengthen expenditure management, government agencies should reduce reliance on Article 223 by ensuring better upfront budgeting for known expenditures,” she recommends.

She has also urged Ministries, Departments and Agencies (MDAs) to set specific and stable targets at the start of the financial year to facilitate accurate performance measurement, and also priority should be given to completing ongoing multi-year projects before initiating new ones to enhance project completion rates and optimise resource utilisation.               

According to CoB, the National Government’s original gross budget was Sh4.49 trillion, revised to Sh4.37 trillion in Supplementary Budget I and Sh4.64 trillion in Supplementary Budget II, compared to Sh4.34 trillion for Financial Year 2023/24.

She explained that the revised budget comprises Sh616.09 billion for ministerial development expenditure, which was 13 per cent of the revised gross national budget and 26 per cent of the revised gross ministerial budget of Sh2.35 trillion.

At the same time, she said recurrent allocation comprised ministerial recurrent allocation of Sh1.73 trillion (37 per cent of the revised gross national budget) and Consolidated Fund Services (CFS) at Sh2.29 trillion (49 per cent of the revised gross national budget).

During the reporting period, receipts into the Consolidated Fund amounted to Sh2.75 trillion, representing 62 per cent of the revised net estimates of Sh4.47 trillion, compared to the Sh2.7 trillion (63 per cent) received in a similar period in FY 2023/24.

“The total exchequer issues from the Consolidated Fund to MDAs, CFS, and the County Governments amounted to Sh2.64 trillion, representing 59 per cent of the revised net estimates of Sh4.47 trillion, compared to Sh2.7 trillion recorded in a similar period in FY 2023/24,” she explained.

The report has also shown that the exchequer issues comprised Sh170.83 billion (48 per cent) for ministerial development expenditure, Sh991.75 billion (70 per cent) for recurrent expenditure, Sh1.2 trillion (53 per cent) to CFS, and Sh255.54 billion (61 per cent) to County governments as equitable shareable revenue.

County government exchequer issues from the national government included Sh30.83 billion for June 2024 arrears.

CoB has also stated that the development expenditure with the highest spending included Capital Transfers by the MDAs in subsidies, grants, or direct transfers to Semi-Autonomous Government Agencies (SAGAs) at Sh253.79 billion, representing 75 per cent of the gross development spending.

Other major development expenditure comprised the Construction and Civil Works at Sh41.61 billion and the Purchase of Specialised Plant, Equipment and Machinery at Sh7.62 billion, representing 12 per cent and 2 per cent, respectively, of the gross development expenditure.

The CoB has stated that during the first nine months of FY 2024/2025, the Controller of Budget authorised 20 requests amounting to Sh2.21 billion from the Equalization Fund.

“The amount comprises Sh198.50 million for the Equalization Fund Secretariat’s recurrent expenses, Sh356.87 million for Policy 1 development pending bills under the Ministry of Water and Sanitation, and Sh1.66 billion for 2nd policy development projects for 35 marginalised areas.