Treasury slashes e-procurement funding by 82% despite Ruto's directive

The Treasury is set to significantly reduce its funding for the ongoing automation of government procurement, despite strong calls from President William Ruto for the full implementation of the project.

Draft budget documents reveal that starting in July, the government plans to slash expenditure on the long-delayed project by 82 per cent, from Sh560 million in the current financial year to just Sh100 million.

The automated system, known as the electronic government procurement (e-GP) platform, aims to fully digitise the tendering process, enabling the online initiation, evaluation, and awarding of government contracts.

The full rollout of the system, which is expected to cost approximately Sh5.05 billion, is seen as a critical step toward enhancing transparency and curbing corruption in Kenya's public sector.

The project is closely linked to the Public Procurement and Asset Disposal Act of 2015, which calls for a more transparent, accountable tendering process.

As part of the government's efforts to modernise public service, the system will be integrated with the Integrated Financial Management Information System (IFMIS), which processes payments to suppliers and contractors.

Despite the ambitious goals of the project, the significant budget reduction could delay its full implementation. Treasury officials now predict that the system will not be fully operational until June 2028.

Presidential directive

This timeline stands in stark contrast to President Ruto's directive issued late last year, which called for the full automation of government procurement processes by April 2025.

In his State of the Nation Address in November, President Ruto criticised the National Treasury's slow progress on the e-procurement system.

"The National Treasury has been dragging its feet in the implementation of an e-procurement system for nearly 10 years," Ruto said.

"I direct the National Treasury to roll out the e-procurement system by the end of the first quarter of 2025 and ensure that, going forward, only procurement undertaken through this system is sanctioned."

The e-GP system is a key component of Kenya's ongoing reforms supported by the International Monetary Fund (IMF).

The system is expected to reduce corruption and waste in government dealings, which has long been a major issue in the country.

According to estimates, the Kenyan government loses about a third of its annual budget, estimated at Sh3.8 trillion this financial year, due to corruption and inefficiencies in the procurement process.

Treasury Cabinet Secretary John Mbadi has stressed that automation could save the government substantial amounts.

"By automating the procurement process from budgeting to expenditure, we will be able to reduce wastage. If we automate our systems properly, I believe we can save more than Sh100 billion," he said in October 2024.

The cut in funding for the e-GP platform has raised concerns among supporters of the project, who fear it could slow down the reforms that are crucial for improving government accountability.