State House, Interior Ministry in Secret Sh4bn Off-Budget Spend
The State House and Interior Ministry exceeded their budget allocations by over Sh3.8 billion in the fiscal year ending June 30, with minimal transparency regarding the excess expenditure.
Controller of Budget Margaret Nyakang’o disclosed in her latest report that she rejected nearly half of the extra-budgetary funds requested by the State House and Interior Ministry.
The State House sought Sh2.858 billion for “national security and State functions,” all of which were requested on April 9. Out of this, the Controller of Budget approved Sh1.242 billion.
The Ministry of Interior requested Sh3.165 billion, primarily for multi-agency security operations. The Controller of Budget approved Sh2.65 billion of this amount.
Article 223 of the Constitution allows spending beyond the approved budget under emergencies, such as urgent functions or disasters, or when allocated funds are insufficient.
Parliament must authorize such expenditures within two months after the initial withdrawal.
The government is restricted to spending no more than 10 percent of its total approved budget for a given financial year under this provision.
In the 2023-24 fiscal year, the government spent Sh19.1 billion outside its budget, which was later incorporated into the November 2023 and June 2024 supplementary budgets.
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Several other ministries exceeded their approved budgets, including ICT (Sh221 million), Energy (Sh78 million), Agriculture (Sh3.4 billion), the East African Community (Sh1 billion), Environment (Sh2.02 billion), Treasury (Sh3.07 billion), Education (Sh177.5 million), Trade (Sh54.4 million), and Cooperatives (Sh600 million). The National Police Service overspent by Sh2 billion.
The total requests by national government institutions amounted to Sh30.65 billion, but only Sh19.1 billion was approved for spending, equating to 0.5 percent of the national budget for the year.
While the report does not specify the exact national security expenses requested by the State House, President William Ruto’s official visits to Ghana and Guinea Bissau between April 2 and 6 are noteworthy. During this period, Ruto met with Ghana’s President Nana Akufo-Addo to sign bilateral agreements and held talks with Guinea Bissau’s leader, Umaro Sissoco Embalo, to boost trade ties.
On April 8, President Ruto commissioned a clinker plant in West Pokot and hosted Muslim delegations during Ramadan at State House, Nairobi, before touring Laikipia County on April 12.
State House spokesperson Hussein Mohamed insisted that the funds earmarked for national security were used appropriately, although he did not disclose specific amounts allocated to national security or state functions, nor confirm whether the foreign trips were funded from the same budget.
The Interior Ministry’s Sh2.65 billion spending was attributed to multi-agency security operations, Madaraka Day preparations, local presidential functions, and compensation for flood victims in Nairobi. Interior Cabinet Secretary Prof. Kithure Kindiki made eight budgetary requests between February 22 and May 27.
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The report also emphasizes financial challenges stemming from rising debt, with loan repayments growing by almost 30 percent in the 2023/24 fiscal year compared to the prior year. The initial allocation to Consolidated Fund Services (CFS) in 2023/24 was Sh1.96 trillion, later revised to Sh2.08 trillion in the first supplementary budget and Sh1.99 trillion in the second.
This is in contrast to the Sh1.58 trillion allocated in 2022/23, accounting for 45 percent of the revised gross national budget of Sh4.43 trillion.
The 26 percent increase (Sh413.74 billion) in the CFS budget between 2022/23 and 2023/24 is attributed to a 29 percent rise in debt repayment obligations and a 9 percent rise in pensions and gratuity payments.
The original allocation for public debt servicing in 2023/24 was Sh1.75 trillion. It was adjusted to Sh1.87 trillion in the first supplementary budget and Sh1.78 trillion in the second, making up 90 percent of the CFS budget. This marks a 29 percent increase compared to the Sh1.39 trillion allocated in 2022/23.
The revised public debt allocation for 2023/24 of Sh1.78 trillion consists of Sh850.56 billion for interest payments and Sh931.84 billion for principal payments.
External debt servicing amounted to Sh763.35 billion, while domestic debt accounted for Sh1.02 trillion.
Public debt servicing in the 2023/24 financial year totaled Sh1.59 trillion, representing 89 percent of the revised estimates, compared to Sh1.15 billion (83 percent) the previous year.
Counties did not receive the Sh30.83 billion allocated for the June 2024 disbursement, as mandated by the County Allocation of Revenue Act, 2023.
State House, Interior Ministry in Secret Sh4bn Off-Budget Spend
