Sh45 billion funding shortfall cripples development projects in counties
The law mandates counties to allocate at least 30 per cent of their budgets to development expenditures.
Counties are grappling with a severe funding shortfall, having achieved just three per cent of their budgeted development expenditure in the first quarter of the Financial Year 2024-2025.
New data from the Controller of Budget (CoB) reveals that counties spent only Sh6.7 billion on development activities out of the allocated Sh205.3 billion, creating a Sh44.6 billion deficit within three months.
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The funding gap poses significant challenges for counties to deliver development projects, compounded by delayed disbursements from the National Treasury and underperformance in local revenue collection.
"During the reporting period, the county government's development expenditure amounted to Sh6.71 billion, translating to an absorption rate of three per cent of the annual development budget of Sh205.33 billion," the report says.
"This represented a decline from the four per cent absorption rate realised in a similar period in the Financial Year 2023-2024 when the cumulative expenditure on development was Sh6.92 billion," the CoB reported.
The law mandates counties to allocate at least 30 per cent of their budgets to development expenditures.
However, in the first quarter, counties allocated just 12 per cent of their total spending — Sh6.7 billion of the Sh55.7 billion spent during this period — to development.
The delay in disbursing equitable share revenues by the National Treasury has been a critical factor hampering budget implementation.
By the end of September, the Treasury had disbursed Sh32.7 billion out of the Sh380 billion budgeted for the fiscal year, leaving Sh62 billion undisbursed.
The CoB warned that this trend risks halting county operations, further derailing development goals.
In total, counties have a Sh576.7 billion budget for the FY 2024-2025.
However, they only spent 10 per cent of this amount (Sh55.7 billion) in the first quarter, a decline compared to Sh67.5 billion spent during the same period last year.
This leaves counties under pressure to spend Sh521 billion within the remaining nine months to meet their annual targets, a task that appears increasingly unattainable given the persistent delays and revenue underperformance.
The CoB also flagged 10 counties for failing to report any spending on development activities during the quarter.
These include Baringo, Elgeyo-Marakwet, Kajiado, Kisii, Lamu, Nairobi and Nyandarua.
