The Auditor General has indicated that the National Treasury has withheld KSh 46.5 billion earmarked for the country’s most marginalised communities over the last 14 years.
- •Since the establishment of the Equalisation Fund in 2011, only Ksh 13.4 billion of the Ksh 59.9 billion entitlement has been disbursed to the fund.
- •The law stipulates that 0.5% of national revenue be allocated annually to improve roads, water, electricity and health services in historically underdeveloped areas.
- •With just five years left on its legal mandate, The Equalisation Fund risks becoming another unfulfilled policy ambition, failing to deliver on its mandate both due to the lack of financing and the fact that its projects are either unfinished or unused.
In 2023, Parliament approved an appropriation of KSh 13.9bn to the Fund, covering the 21/22 and 22/23 financial years. While this brought the total amount disbursed since the fund’s inception to KSh 26.3bn, an audit of Treasury records shows that the government only remitted KSh. 1.03 billion that year.
The Auditor General also pointed out that Ksh 156 million in unsupported expenditure was channeled into projects that had already been completed or were never implemented. A review of ten projects under the Equalisation fund’s First Policy Phase found that six projects had been completed but remained unused, while four were unfinished, with equipment worth Ksh 32 million undelivered.
Separately, 57 projects initiated more than five years ago under the policy remain below 50% completion. It was unclear if the value for funds allocated in these projects could be accounted for.
Allocations under the Second Policy Phase have remained low. In the last two years, Ksh 10 billion was spread across 1,424 marginalised areas, with some receiving as little as Ksh 5 million — an amount the Auditor General scoffs at as unlikely to make meaningful impact. This resulted from the lack of an impact assessment of the projects under the First Policy Phase, pointing out the lack of seriousness by the National Government in bolstering the fund.
The Equalisation Fund is intended to amplify development efforts by counties that have faced historical marginalization. These include devolved units like Turkana, Mandera, Wajir, Garissa, Kilifi, Marsabit, Isiolo, and Kwale.
