Budgetary allocation for major infrastructure projects has been slashed by Sh13.9 billion in President William Ruto’s second mini-budget which has also shifted resources from development to recurrent spending.
This has affected dozens of road projects with the biggest loser being the Horn of Africa Gateway Development Project which has been docked Sh2.3 billion in the latest second supplementary budget.
This is a further cut from the Sh3.7 billion that the road, which aimed at improving connectivity between Kenya, Somalia and Ethiopia, was subjected to in the first mini-budget in January.
Former President Uhuru Kenyatta, who put a lot of money into mega infrastructural projects, earlier allocated the project Sh9.97 billion.
The second supplementary budget, which comes less than two weeks to the end of the current financial year, has also cut the allocation for dualling the Thika-Kenol-Marua Lot 2 by Sh1.5 billion.
Dualling of the Kenol-Sagana section has lost Sh1 billion even as resources were shifted to recurrent spending such as salaries.
Several other road projects have seen cuts totalling Sh6.87 billion in a mini-budget that has reduced total development spend by Sh39 billion.
So far, the Kenya Kwanza administration has reduced its budget deficit, but mostly it has been at the expense of development projects, many put on ice.
A cash crunch has forced the government to reduce development spending while shifting resources to recurrent expenditure, especially payment of interest which has ballooned due to the weakening of the Shilling.
The World Bank, in its latest Kenya Economic Update, noted that investment is estimated to have contracted in 2022 in line with an 11 percent year-on-year decline in development spending on fiscal consolidation.
