State is misusing emergency law to fund day-to-day operations

Controller of Budget (COB) Dr Margaret Nyakang'o  noted that  Commitment fees increases public expenditure, when she made  her submissions before the Public Debt and Privatization Commiittee at Bunge Towers, Parliament, Nairobi. August 18th,2026 [Elvis Ogina, Standard]

Controller of Budget Margaret Nyakango has raised concerns over the misuse of an emergency law by the National Treasury to access billions from the Consolidated Fund.

In her National Government Budget Implementation Review Report for the 2025/26 financial year, Nyakango flagged the use of Article 223 of the Constitution by the National Treasury to authorise expenditure of funds on routine, day-to-day office operations contrary to law.

The report documents that during the year under review, National Treasury Cabinet Secretary John Mbadi approved additional funding under Article 223 of the Constitution amounting to Sh281.46 billion, comprising Sh68.77 billion for development and Sh212.69 billion in recurrent expenditure.

 This amount represented six percent of the gross national budget. Of this, the Controller of Budget authorised withdrawals of Sh209.37 billion, comprising Sh187.90 billion for recurrent expenditure and Sh21.47 billion for development expenditure.

This was an increase compared to Sh72.24 billion approved by CS Mbadi, with Sh66.54 billion authorised for withdrawal by the Controller of Budget in the 2024/25 financial year.

“The Controller of the Budget observed that some of the approvals under Article 223 of the Constitution concerned routine, day-to-day office operations but had not been allocated funds in the budget formulation process. This resulted in the Controller of Budget seeking clarification as to whether approvals by the Cabinet Secretary complied with the criteria set in Paragraph 40 (3) and (4) of the Public Finance Management (National Government) Regulations 2015 on whether the purpose for which approval is sought for a supplementary budget was foreseeable and known during the formulation of the Budget Estimates,” reads the report.

Notably, Article 223 of the constitution allows the national government to spend money that has not been appropriated by parliament if the amount appropriated for any purpose is insufficient or if a need has arisen for expenditure for a purpose for which no amount has been appropriated. This could include emergencies such as floods, earthquakes or other natural disasters and anything else that might constitute as an emergency.

In case money has been withdrawn from the public coffers without the authority of the National Assembly, the Article requires the National Treasury to report to Parliament within two months of the last withdrawal for regularisation through a supplementary budget.

The law is however, explicit that the funds withdrawn should not be used for day-to-day operations.

In light of the above, CoB is now calling for a review of the legislative framework governing the criteria for funding under Article 223 of the Constitution, as well as the control mechanisms to ensure fiscal integrity and safeguard budget credibility.

“...Expenditure under Article 223 of the Constitution should be used strictly in line with the requirements on use of Article 223, which is for expenditure that was unforeseen at the time of budget formulation or of an emergency nature,” adds the report.

This is however not the first time that the CoB has raised concern over the misuse of the emergency law by the government, as the same has been cited severally in previous reports.

In her report for the First Nine Months of the 2025/26 financial year, CoB also highlighted the increased reliance on supplementary expenditure under Article 223 of the Constitution, which she termed a challenge affecting budget implementation, alongside delays in procurement and the accumulation of pending bills.

The report revealed that 77 per cent of the recurrent Exchequer issues, equivalent to Sh144.40 billion, was directed towards public debt for the settlement of international sovereign bonds.  Of the approved amount, the Controller of Budget authorized withdrawals totaling Sh206.81 billion, with recurrent expenditure accounting for Sh185.34 billion.

It noted that the National Treasury approved Sh276.76 billion in additional expenditure under Article 223 between July 2025 and March 2026, comprising Sh207.99 billion for recurrent expenditure and Sh68.77 billion for development spending.

The approvals represented six per cent of the national budget and remained within the constitutional ceiling of 10 per cent.

However, the amount approved under the emergency provision was more than five times the Sh48.88 billion approved during the same period in the previous financial year.

“The Controller of Budget observed that some of the approvals under Article 223 of the Constitution were routine in nature, intended to support day-to-day office operations,” read the report.

It added that the office sought explanations from accounting officers on whether the expenditure complied with the Public Finance Management (National Government) Regulations, including whether the spending was foreseeable and whether it ought to have been provided for during the preparation of the 2025-26 Budget Estimates.

The findings showed that some ministries resorted to emergency constitutional provisions to finance expenditure that ordinarily ought to have been included in the annual budget approved by Parliament.

For instance, National Intelligence Service exceeded its approved budget after receiving emergency funding, spending Sh53.93 billion on recurrent activities.

In another report, the CoB fingered the National Treasury over Sh43 billion in extra allocations approved outside the law.

Nyakang’o highlighted that the extra allocations included Sh33.54 billion for recurrent expenditure and Sh9.95 billion for development projects, with the State Department for Transport and the Treasury being the top beneficiaries.

She, again brought to the fore that the expenditure covered foreseeable costs, such as pending Covid-19 bills, which should have been included in the original budget approved by Parliament.

The report detailed that in the 2025/26 fiscal period, CS Mbadi had already authorised Sh43.5 billion in additional funding to various government entities, including the National Treasury, in violation of legal provisions.

“The Treasury CS should expedite the submission of the necessary documentation to the National Assembly for approval within the stipulated two-month period to ensure compliance with constitutional requirements,” stated Nyakang’o. She also decried delays in seeking parliamentary approval for withdrawn funds.

“To reduce over-reliance on Article 223 of the Constitution on foreseen expenses, it is necessary to adopt planning, budget practices, and sound expenditure management by prioritizing all essential services and aligning them with operational realities during budget formulation and implementation,” added the report.