State House and the Office of the Deputy President overspent their budgets by hundreds of millions of shillings even as Kenya diverted nearly eight out of every ten tax shillings to debt repayment, exposing widening fiscal strain and tightening space for development spending.
- •State House spent KSh 10.40 billion in recurrent expenditures in seven months, exceeding its approved budget of KSh 7.68 billion by 35%.
- •Meanwhile, the Office of the Deputy President overspent its recurrent expenditure by KSh 361.6 million, with expenditures reaching KSh 3.33 billion against a budget of KSh 2.97 billion.
- •The overruns come as Kenya’s fiscal position showed intensifying structural weakness, with debt servicing consuming KSh 1.075 trillion during the period; equivalent to 79.9% of total tax revenue collected, which stood at KSh 1.344 trillion.
Recurrent expenditures reached KSh 885.7 billion during the period, more than five times development spending. Within recurrent expenditures, public sector wages and pension obligations remained among the largest components.
Why it Matters
The executive's talk of fiscal austerity and alternative financing for infrastructure sits uncomfortably alongside the government’s record of unchecked executive spending. While the State House and the Deputy President’s office flagrantly exceeded their budgets, ministries responsible for development and public services struggled to access the funds needed to execute even basic projects.
Despite extensive borrowing and reduced development spending, the government’s cash balance is still extremely thin. The exchequer balance stood at just KSh 2.95 billion as of January 30, a negligible buffer relative to the scale of national expenditure.
The figures show a fiscal system increasingly defined by debt repayment, heavy borrowing, weakened revenue performance, and shrinking development investment, even as core administrative and executive offices exceeded approved spending limits.
The slow pace of disbursements to counties reflected tightening fiscal conditions and cash flow constraints at the national level.
How the Money was Spent
The Teachers Service Commission (TSC) alone spent KSh 225.3 billion, making it the largest single recurrent expenditure category outside debt servicing.
On the other hand, the National Intelligence Service (NIS) spent KSh 39.47 billion, exceeding spending by many core economic ministries including foreign affairs, which spent KSh 10.49 billion, and ICT and digital economy, which spent KSh 1.48 billion.
The Ministry of Defence spent KSh 103.42 billion in recurrent expenditures, while the National Police Service spent KSh 71.74 billion. Spending on social protection programs reached KSh 22.30 billion, while the Judiciary spent KSh 13.96 billion.
Even as national government spending accelerated, transfers to county governments lagged significantly behind target.
County governments received KSh 205.43 billion in equitable share transfers out of the KSh 415 billion allocated for the fiscal year, representing just 49.5% of the approved amount.
External financing also fell far short of projections as Kenya received KSh 234.85 billion in external loans and grants against a target of KSh 569.81 billion, achieving just 41.2% of planned inflows, forcing greater reliance on domestic borrowing.
Despite the surge in borrowing, development spending collapsed sharply as the government spent only KSh 167.8 billion on development projects out of a planned KSh 407.1 billion, representing an execution rate of just 41.2%. Debt servicing alone exceeded development spending by six times.
The Drought Question
As Kenya battles a ravaging drought sweeping across the arid and semi-arid counties, development spending on water, irrigation, and crop resilience is staggering behind schedule. The State Department for Water and Sanitation disbursed just KSh 12.2 billion of a KSh 31 billion allocation, while irrigation projects reached only KSh 2.63 billion of KSh 4.96 billion.
Crop development programs fared slightly better at KSh 20 billion out of KSh 29 billion, and the State Department for Special Programmes, which channels emergency drought relief, spent only half of its modest KSh 165 million development allocation.
Altogether, Kenya has poured roughly KSh 35 billion into drought management, barely half of planned resources, leaving critical resilience projects underfunded as millions face food and water insecurity.
The State Department of Medical Services only received KSh 3.96 billion against its KSh 13.61 billion budgetary allocation, while the public health department only received KSh 1.8 billion.
The State Department for Roads spent only KSh 24.31 billion out of its KSh 76.24 billion allocation, achieving just 31.9% execution. Housing development spending was even weaker, with only KSh 1.79 billion disbursed out of KSh 20.89 billion, or 8.6% of the approved budget.
The State Department for Economic Planning, one of the largest development spending units, disbursed KSh 35.23 billion out of KSh 59.30 billion, while energy development spending stood at KSh 9.32 billion out of KSh 21.12 billion.
