Treasury undermining crucial State projects by withholding funds - MPs

The National Treasury has been put on the spot and accused of sabotaging key development projects by failing to release funds appropriated to State Departments.

The National Assembly Departmental Committee on Trade, Industry and Cooperatives on Tuesday raised concerns that Sh218.5 billion has not been disbursed to five state agencies within the Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs).

 John Gakuya, Chairman of the Committee, specifically highlighted the affected departments were Investment Promotion, Industry, Trade, Cooperatives, and MSMEs.

"Our biggest concern as a committee is that the National Treasury has decided to kill industrialisation and the manufacturing sector by starving the state departments of funds," he said.

Aldai MP Maryanne Kitany, who also serves as the Vice Chair of the committee, questioned why State Departments and their agencies were deprived of development funds, especially considering that certain sectors are crucial for revenue generation.

"For the government to collect more revenue in the key sectors of the economy, it has to invest funds to spur growth in the various sectors. How do you project to get revenue when you are not investing?" she posed.

Officers from the Treasury who appeared before the committee include Francis Anyona, Director of Budget and John Anjera, Director of Planning-Macro and Fiscal Affairs) who explained that lack of funds is to blame for the situation.

"Due to the shortfall of revenue and scarcity of cash resources, the National Treasury usually apply for administrative criteria by giving priority to public debt, security, salaries, counties, social programmes such as education, health, development and flagship projects and others," the officers told the MPs.

Several key projects are in limbo due to the National Treasury's failure to release allocated funds. These include the construction of six Export Promotion Zones (EPZ), each allocated Sh500 million in the last financial year, amounting to Sh3 billion.

 So far, only Sh300 million has been released for these projects, which were directed by President William Ruto.

Furthermore, despite Parliament allocating Sh4 billion for the Coffee Cherry Fund in the Financial Year 2023-2024 budget, Sh3.5 billion remains unreleased.

 Similarly, the Treasury is yet to disburse Sh350 million earmarked for the modernization of Kenya Planters Cooperative Union (KPCU) warehouses, as approved by the National Assembly in the Supplementary Budget II of 2023-2024.