Ministries’ reluctant spending on development worrying

The poor performance of government Ministries, Departments and Agencies (MDAs) has come into sharp focus this week amid reports that the President was upset by the unsatisfactory utilisation of voted funds by MDAs. According to the Controller of Budget report for the half year to December 31, 2014, the national government had utilised only 26 per cent of the total development budget for the 2014/15 financial year, amounting to Sh476 billion, leaving over Sh350 billion unutilised with only a few months left to the end of the financial year. That’s more than the total amounts allocated to the counties for the entire financial year.

The President may have been upset but the trend is nothing unusual even in the days he was at the helm of the Treasury. In the same period the previous year 2013/14, Treasury had utilised only 16 per cent of the amounts allocated for development. In entire 2012/13 financial year, only 44 per cent of the Sh453 billion voted for development expenditure was spent by Treasury. The average absorption of development expenditure has in fact declined from 55 per cent in 2011/12 to just above 46 per cent in the last financial year. This trend has always been the same for years. Despite lofty budget figures read out on the budget day, we normally realise only about half the expenditure.

Uhuru has every right to be worried. Several of his flagship programmes may not be realised by the time his first term is up. This includes key infrastructural projects such as the laptops for schools, the million-acre Galana irrigation project, the Greenfield Terminal at JKIA, LAPSSET, and several infrastructure and energy projects. The poor performance and failure to deliver on the development projects will likely affects his first term legacy and undermine his development record.

Donors too are worried by the poor absorption record despite efforts in recent years to coordinate budget support to the government. Donor support to the budget is 10 per cent. Stringent donor conditions including project negotiation terms, approval and monitoring often slows down implementation and limits the government’s ability to draw on more funding from development partners. Observers also cite active alienation of Civil Society Ogansiations engaged in development initiatives as a bad precedent for effective development cooperation.

In development terms, low absorption of funds adversely affects service delivery, and lowers the economic growth. The government has often blamed the rigid public procurement rules and the onerous litigation on nearly every major project. In softening the procurement laws, the government also runs the risk of expanding the room for corruption in a system where officials are more interested in raiding public coffers than public good.

Is the President on top of things in his government? According to media reports this week, 23 directives issued by the President on these infrastructure projects since coming to office have not been implemented. Now that’s alarming! Some officials simply stall projects because of failure to get kickbacks; others not at all motivated to perform for various reasons, or even under performers because of close relationship to the President.

That there are folks in government who don’t act on the President’s directives says much about the efficacy and effectiveness of his leadership. Leadership is about influencing change, and getting things done. The President has read the riot act to his officers too often but with little success. To redeem his legacy, he must firmly exercise his authority on all poor performers regardless of their status in his administration.