Kenya’s spending on development drops by 24%

A report by the Central Bank of Kenya shows that in the fiscal year that ended in June 2018, the government spent KSh1.32 trillion on salaries and other recurrent expenses, KSh485.7 billion on development, and KSh306.2 billion on transfers to counties.

The report states that, “development expenditure reduced significantly by 24.1 per cent, and accounted for 23 per cent of the total Government expenditure and net lending.”

Recurring expenses (operating costs, salaries, and pension payments) shot up 11.9 percent to reach Ksh1.3 trillion and represented 62.5 percent of total government spending.

Since 2014, funds put into development programs have increased by 52 percent while those spent on recurrent expenses increased by 68 percent.

Economists have raised concern over the high spending on recurrent costs. They argue that the model is not sustainable as Kenya needs to invest in more income generating projects which will assist in paying off public debt. Kenya government debt has risen from KSh2.37 trillion in 2014, to KSh5.04 trillion in the 2018 equal to 112 percent increase.