Wasted billions: Auditor-General raises alarm over Sh304bn unused in key government projects

Auditor General Nancy Gathungu. (Photo: Office of the Auditor General)

By Lucy Mumbi
Monday, June 2, 2025

Gathungu expressed concern over the government’s repeated failure to fully utilise development funds, warning that the trend poses a threat to the delivery of key infrastructure and social projects.

A total of 14 major government projects, with an allocation of Sh515.1 billion, have failed to utilise more than half of their funds, exposing serious inefficiencies in budget absorption over the past five years.

According to Auditor-General Nancy Gathungu, these projects left Sh304.4 billion, equivalent to 59.1 per cent of the allocated budget, undrawn, highlighting significant financial mismanagement and delays in implementation.

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Appearing before the National Assembly’s Budget and Appropriations Committee, Gathungu expressed concern over the government’s repeated failure to fully utilise development funds, warning that the trend poses a threat to the delivery of key infrastructure and social projects.

Many of these projects, she said, now risk lapsing without achieving their intended goals.

She also revealed that taxpayers have lost Sh6.569 billion in commitment fees for undrawn funds tied to loans from foreign lenders, which were intended to finance these underperforming initiatives.

“Indeed, between the FY 2020/2021 and FY 2023/2024, the Government paid commitment fees totalling Sh6.569 billion on undrawn amounts in respect of loans signed between the Government of Kenya and foreign lenders,” Gathungu said.

The breakdown of the fees shows the government paid Sh2 billion in 2020/21, Sh1.48 billion in 2021/22, Sh1.43 billion in 2022/23, and Sh1.58 billion in 2023/24.

National budget

The Auditor-General further raised concerns over low development allocations in the national budget, noting that only 15 per cent or Sh708.85 billion of the Sh4.26 trillion gross expenditure in the 2023/24 financial year was allocated to development.

In the proposed 2024/25 budget, development spending is set at Sh643.9 billion, or 25.8 per cent of national expenditure, which Gathungu notes remains below the legal minimum.

“This is contrary to the provisions of Section 15(2)(a) of the Public Finance Management Act, 2012 which requires that, over the medium term, a minimum of thirty per cent (30 per cent) of the National and County Governments budgets shall be allocated to development expenditure,” reads the report.

Several high-profile projects highlighted in the Auditor-General’s report exemplify the crisis of underutilisation and financial inefficiency. For instance, the East Africa Skills Transformation Project, which runs from 2018 to 2024 and has a budget of Sh1.1 billion, had only utilised 61 per cent of donor commitments by June 2024.

Likewise, the Sh23.5 billion Kapchorwa-Suam-Kitale and Eldoret bypass road projects had an undrawn balance of 35 per cent by September 2023.

One of the most alarming cases is the Mombasa Gate Bridge project, which was allocated Sh49.05 billion over seven years from December 2019, but after four years, only Sh938.2 million—just two per cent—has been spent, leaving Sh48.11 billion unutilised.

“In accordance with Clause II (2.03) of the financing agreement, the loan will continue to attract a penalty on the undrawn balance in the form of commitment fees,” Gathungu warned.