Treasury Cabinet Secretary John Mbadi has disclosed that President William Ruto’s government unlawfully spent Ksh415 billion on recurrent expenditure in the 2023/2024 fiscal year.
In a report, Mbadi revealed that of the Ksh766 billion borrowed by Ruto’s administration, Ksh415 billion was allocated to recurrent expenses. In contrast, only Ksh350 billion went toward development projects.
The government’s decision to spend more on recurrent expenditure than on development violates Section 2C of the Finance Management Act of 2012. The Act mandates that recurrent expenditure must not consume excessive portions of borrowed funds or revenue.
Mbadi’s report highlighted that the Ksh415 billion spent represents an 82 percent increase compared to the previous period, where Ksh227 billion was used on recurrent expenditure, as per legal limits.
The significant rise in recurrent expenditure has raised concerns, with Mbadi pointing out that such spending is unsustainable. “This breach of the Finance Management Act undermines fiscal responsibility and threatens future economic stability,” Mbadi said.
The report also emphasized the pressure of rising government spending amidst missed tax collection targets. Mbadi noted that the government’s focus on recurrent costs, including salaries and administrative expenses, has worsened the situation.
“The pressure to meet recurrent obligations continues to affect the government’s ability to allocate adequate resources for development projects,” Mbadi stated.
The 2024 Budget Review and Outlook draft paper by Mbadi also details how such over expenditure impacted the wider fiscal health of the country. These included long-term risks such as increased debt burdens and lower allocations to development programs.
