The Controller of Budget (CoB) has called for tighter controls on the use of emergency spending powers after the government spent more than Sh144.4 billion to settle international sovereign bond obligations during the first nine months of the 2025-26 financial year.
In her latest National Government Budget Implementation Review Report, CoB Margaret Nyakang’o notes that “increased reliance on supplementary expenditure under Article 223 of the Constitution” remains one of the major challenges affecting budget implementation, alongside delays in procurement and rising pending bills.
The report shows that the National Treasury approved Sh276.76 billion in additional spending under Article 223 between July 2025 and March 2026. Out of this, Sh207.99 billion went to recurrent expenditure while Sh68.77 billion was allocated to development spending. The approvals accounted for six per cent of the national budget and remained within the constitutional limit of 10 per cent.
Article 223 of the Constitution allows the national government to spend money that has not been appropriated by Parliament where an approved budget is insufficient, unforeseen needs arise, or funds are withdrawn from the Contingencies Fund.
Despite staying within the legal ceiling, the report shows that the amount approved under this provision was more than five times the Sh48.88 billion approved in the same period of the previous financial year, raising concern over its growing use.
According to the report, 77 per cent of the recurrent Exchequer issues, equivalent to Sh144.40 billion, were directed to public debt for the repayment of international sovereign bonds. The Controller authorised total withdrawals of Sh206.81 billion, with recurrent spending accounting for Sh185.34 billion.
The report warns that some of the approvals were not strictly emergency-based.
“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,” reads the report.
The office also questioned whether some of the spending met legal requirements. It sought explanations from accounting officers on whether the expenditure complied with the Public Finance Management (National Government) Regulations, including whether the costs were foreseeable and whether they should have been included in the 2025-26 budget estimates.
Several government offices and programmes benefited from the emergency allocations. State House received an additional Sh4.45 billion.
The report notes that “the over-expenditure on Coordination of State House Functions sub-programme was attributable to additional funding of Sh4.45 billion under Article 223 of the Constitution in favour of the State House for other operating expenses.”
The Deputy President Services programme also went beyond its approved budget after receiving Sh507.84 million. The report states that this was “to cater for hospitality supplies and services, hire of transport and other operating expenses.”
The National Intelligence Service also exceeded its budget, spending Sh53.93 billion on recurrent activities after receiving emergency funding.
Security-related agencies were also among the key beneficiaries. The State Department for Internal Security and National Administration exceeded its recurrent budget after receiving Sh8.09 billion under Article 223, while “the National Government Coordination Services sub-programme surpassed its budget by 32 per cent… utilised for security-related operations.”
The findings come at a time when the country’s debt levels continue to rise. Public debt stood at Sh12.82 trillion by March 2026, representing 69.9 per cent of gross domestic product, above the approved debt anchor of 55 per cent.
During the same period, debt servicing consumed Sh1.35 trillion, driven mainly by repayments of external debt principal. The report also notes that the government has increasingly relied on liability management operations, including buying back international sovereign bonds through new Eurobond issuances, to manage refinancing risks and smooth repayment schedules.
Beyond debt and routine government operations, Article 223 funds were also used to support a range of programmes. These included the 2025 national examinations, the Joint Mobile Registration Outreach Programme for national identity cards and birth certificates, the Health Internship Programme, the Kenya Covid-19 Health Emergency Response Project, drought intervention, milk mop-up to stabilise raw milk prices, the Nyota youth empowerment programme, and the Dongo Kundu Special Economic Zone Project.
The State Department for Special Programmes received Sh5.61 billion “for purchase of essential food items for drought intervention in the country,” while the State Department for Co-operatives received Sh2 billion for “milk mop-up of excess milk” to stabilise prices.
Although Nyakango did not conclude that there was a constitutional breach, she warned of growing pressure on the system. The report states that there is “over-reliance on Article 223 of the Constitution to fund government programmes and settlement of debt obligations,” describing it as a key fiscal risk affecting budget implementation.
To address the challenge, Nyakang’o has recommended stronger discipline in the use of emergency funds. She stated that “requisitions under Article 223 of the Constitution should be applied strictly in line with the requirements on use of Article 223, which are unforeseen and of an emergent nature.”
The report further called for a review of the legal framework governing Article 223 and the introduction of stronger controls to improve accountability, safeguard fiscal discipline and strengthen budget transparency.
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