Treasury allocates Sh6.98 billion more for infrastructure, reversing previous cuts
A major beneficiary of the increased allocation is the World Bank-funded South Sudan Eastern Africa Transport, Trade, and Development Facilitation project.
The National Treasury has allocated an additional Sh6.98 billion for infrastructure development in the latest mini-budget, reversing a trend of funding cuts that had been in place.
With the additional funds, the development budget for the State Department of Roads now stands at Sh120.07 billion.
This comes as spending on infrastructure gains momentum in the first six months of the Financial Year 2024-2025.
A portion of the funds – Sh1.737 billion – has been allocated to roads constructed using the low-volume seal roads (LVSR) technology, which was introduced in 2014 by former President Uhuru Kenyatta.
Road quality
While the government had previously hinted at discontinuing this programme in early 2023 due to concerns about road quality, it appears to have reconsidered following concerns over reduced financing in the sector.
Another major beneficiary of the increased allocation is the World Bank-funded South Sudan Eastern Africa Transport, Trade, and Development Facilitation project.
This initiative, aimed at improving movement along the Lokichar-Nadapal and Nakodok stretch of the Eldoret-Nadapal and Nakodok road, will receive an additional Sh5.2 billion from the World Bank.
While some road projects have faced budget reductions, the overall allocation for the State Department of Roads has increased.
Historically, road projects have been among the first to experience cuts in mini-budgets, a situation that has had economic repercussions.
The construction sector experienced a downturn in the second and third quarters of 2024, a trend last seen 22 years ago during the late former president Daniel Arap Moi's tenure.
The decline, coupled with reduced credit to the private sector, slowed economic growth during the first three quarters of 2024.
The sector's contraction was largely attributed to budget cuts on major infrastructure projects by the Kenya Kwanza government, along with rising costs of building materials like cement.
In response, the government has now tripled disbursements for road and bridge construction over the past six months, reversing a two-year trend of deep cuts.
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