Auditor-General flags major risks in Ruto's "Bottom-up" plan
Auditor-General Nancy Gathungu highlighted implementation gaps, mismanagement, and financial shortfalls that could hinder the five main pillars of the plan.
2Auditor-General Nancy Gathungu has raised serious concerns about the effectiveness of President William Ruto's Bottom-up Economic Transformation Agenda, warning that key challenges and inefficiencies could derail its success.
In her latest audit report submitted to the National Assembly, Gathungu highlighted implementation gaps, mismanagement, and financial shortfalls that could hinder the five main pillars of the plan. These include agricultural transformation, micro, small, and medium enterprises (MSMEs), healthcare, housing and settlement, and the digital superhighway and creative industries.
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“Audit reports for the financial year 2023/2024 for the State Department responsible for the pillars and the relevant State-owned enterprises supporting them have raised concerns about the performance of the pillars, highlighting inefficiencies. Implementation gaps may hinder the overall success of the Bottom-up Economic Transformation Agenda plans if not addressed,” the report states.
One of the most affected areas is agriculture, which is a central pillar of the plan.
The report points to the supply of substandard fertilizer, irregular procurement, missing documentation, and cases where fertilizer was procured but never delivered as major threats to the sector’s success.
The fertiliser subsidy programme, which was introduced in the 2021-2022 financial year to help farmers cope with rising costs, has also been marred by inefficiencies.
“The audit reports for the financial year 2023/2024 for the State Department of Agriculture and related State-owned enterprises (parastatals) like the National Cereals and Produce Board reveal challenges that will hinder the performance of this pillar,” Gathungu noted.
Additionally, concerns have been raised over the accuracy of the farmer distribution list, delays in project completion, and procurement irregularities involving grain dryers and facilities.
“These challenges pose a significant threat to the successful implementation of agricultural transformation, potentially undermining efforts to enhance food security and support small-scale farmers,” the report states.
Setbacks
The report also highlights setbacks in the government’s plan to establish County Aggregation and Industrial Parks (CAIPs) in all devolved units to promote manufacturing and investment.
Financial constraints have slowed down progress, with counties receiving only Sh1.52 billion of the Sh4.5 billion allocated for the 2023/2024 financial year.
“This means that the counties are facing challenges completing the constructions, which will further delay operationalisation of these CAIPs and achievement of the objectives,” Gathungu said.
MSMEs, another key pillar of the economic model, face risks due to mismanagement and non-performing loans in government-backed funds such as the Hustler Fund, Uwezo Fund, Women Enterprise Fund, and Youth Enterprise Fund.
The audit notes that discrepancies in loan allocations and unclear distribution criteria have caused inefficiencies.
“Significant issues which include high non-performing loans and discrepancies in the allocations affect key performance of MSMEs. Additionally, concerns have been raised about the criteria used for distributing the funds which have resulted in inefficiencies and mismanagement that could hinder MSMEs’ growth and sustainability,” the report states.
Gathungu also flagged major financial and operational concerns in the affordable housing programme, a critical component of the Bottom-up agenda.
Challenges such as funding shortfalls, slow procurement, financial mismanagement, and land ownership disputes could prevent the government from meeting its target of constructing 200,000 housing units per year.
“The programme may be unable to achieve the target of 200,000 units per year, delaying the realisation of the housing agenda and its contribution to the economic transformation,” reads the audit report.
Despite the introduction of the housing levy to finance the project, funds remain inadequate, leading to delays.
The Auditor-General announced that a comprehensive audit of the programme will be conducted in the 2025/2026 financial year.
The healthcare sector is also struggling with systemic issues that could affect the quality of services.
While the government has allocated Sh204.5 billion to the sector and rolled out the Social Health Insurance Fund (SHIF) to cover 15 million Kenyans, challenges persist.
“High healthcare costs, limited rural outreach and unresolved critical governance and structural issues threaten the sector’s ability to provide seamless, accessible, and quality care, underscoring the need for urgent reforms and strategic investments,” the report states.
With key enablers such as governance, education, climate change, and infrastructure also facing setbacks, the report warns that without urgent interventions, the Bottom-up Economic Transformation Agenda may struggle to meet its objectives.
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