The latest Supplementary Budget II for the 2024/25 fiscal year has revealed significant reductions in funding for critical state departments, including Housing, Water, Energy, and ICT. The revised budget aims to align expenditures with available resources through June 2025, significantly impacting various development projects.
Water Sector Sees Substantial Cuts
The State Department for Water faces one of the largest reductions, with its budget slashed from Ksh.49 billion to Ksh.27.8 billion—a Ksh.22 billion decrease. This reduction affects both current and capital expenditures, with Ksh.6.6 billion allocated for operational costs and Ksh.21.2 billion for infrastructure projects.
Projects impacted include water resource conservation, national water and sanitation investments, and water resource management initiatives.
Housing Sector Funding Reduced
The Housing Department, a key focus area for the government, saw its budget revised from Ksh.86.5 billion to Ksh.74.9 billion, reflecting an Ksh.11.6 billion reduction. Treasury attributed this decrease to a decline in donor funding for capital projects. However, an additional Ksh.64.5 million has been allocated to cover salaries under current expenditures.
ICT and Energy Budgets Downscaled
Both the ICT and Energy sectors have experienced notable budget reductions. The ICT budget was cut by Ksh.7.8 billion, dropping from Ksh.20 billion to Ksh.12.2 billion. Critical initiatives such as ICT infrastructure connectivity and Business Process Outsourcing (BPO) development have been affected. Additionally, the implementation budget for e-government services, a cornerstone of President William Ruto’s administration, was reduced from Ksh.3.5 billion to Ksh.2.4 billion.
The Energy Department’s budget fell from Ksh.54.1 billion to Ksh.46.4 billion, representing a Ksh.7.6 billion reduction.
Other Departments Affected
Additional state departments, including Cabinet Affairs, Parliamentary Affairs, Diaspora Affairs, Transport, and Irrigation, have also faced significant budget cuts, underscoring the government’s prioritization amid constrained resources.
Impact and Outlook
These budget adjustments could delay critical development projects in Kenya, raising concerns about the government’s ability to meet its long-term goals in infrastructure, digital transformation, and service delivery.
