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Kenya Business News

Ministries, Agencies Withhold Billions Needed For Economic Growth, Blames Shortage Of Employees.

Key government departments failed to spend the billions of shillings allocated to them in the national budget leaving the economy without the financing steam to power growth. Ministries and agencies had only spent a total of Sh510.5 billion or 44 per cent of their allocations by the end of nine months of this financial year underscoring the problems in budget absorption.

The Office of the Controller of Budget (OCoB) says billions of development budget funds are lying idle with the exchequer as the quantity and quality of public services declines and the pace of economic growth remains subdued for the second year in a row.

The budget execution report says state agencies had spent only one third of the development funds by the end of March pointing to the likelihood that less than half of the money will have been used by the close of the year. Only Sh510.5 billion or 44 per cent of the total annual development and recurrent expenditure funds had been spent nine months into the financial year — against the target 75 per cent.

Agnes Odhiambo, the Controller of Budget, says an acute shortage of human resources and lack of expenditure monitoring structures has left most government departments without the means to spend the budget billions with serious consequences on the pace of economic activity. With the high unemployment rate in Kenya of 40%, one would question the reason behind the acute staffing crisis in key government departments .

This comes at a time when a report released on May 15  2012  shows a decline in the  private sector  jobs creation momentum  with economic growth decelerating for the first time since the 2008 post-election.

The Ethics and Anti-Corruption Commission (EACC) topped the list of government ministries and agencies that had spent the least amounts of the development money by the end of March. The agency, which has been without top executives since the removal of lawyer PLO Lumumba late last year, had spent less than seven per cent of the money it was allocated for development – pointing to the planning and approvals paralysis arising from the absence of the top managers.

Other poor spenders were the Cabinet Office, and three ministries including East African Community, Labour as well as the Justice and Constitutional Affairs.These agencies had used less than eight per cent of the funds at their disposal only three months to the close of the financial year in June.

The ministry of local government topped the list of departments that lacked the capacity to utilise recurrent expenditure funds – followed by the Ministry of Planning and the Public Service Commission.

Mrs Odhiambo says understaffing and slow recruitment processes in the public service have weakened the capacity of most ministries and state agencies to spend recurrent budget funds – pressing the case for employment of a large number of civil servants in the next financial year.



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