The Treasury spent 23 billion shillings without MPs shaking their heads in the last days of Uhuru

By Judy J. Beasley Last updated Jan 31, 2023

Economy

The Treasury spent 23 billion shillings without MPs shaking their heads in the last days of Uhuru

Wednesday, September 21, 2022

Treasury building in Nairobi on June 11, 2020. PHOTO | SILA KIPLAGAT | NMG

The Treasury spent 23 billion shillings without parliamentary approval in the weeks before President William Ruto was sworn in.

Documents tabled in Parliament show that the Treasury made disbursements for, among others, the maize flour and fuel subsidies, an undisclosed payment to Telkom Kenya and the construction of a military research hospital.

He paid 810 million shillings to the State House, 2.2 billion shillings for the construction of the military research hospital, 4.5 billion shillings for the discontinued cornmeal subsidy.

A further 9.45 billion shillings were allocated for road construction and 6 billion shillings for Telkom Kenya for reasons that were not disclosed in documents tabled in parliament on Tuesday.

The Constitution requires the Treasury to table a mini-budget two months after it withdrew funds from the Consolidated Fund without the approval of MPs, whose terms ended on July 9.

The 23 billion shillings is part of the 54.6 billion shillings he had pledged to withdraw from the government’s main account without parliamentary approval.

“The Treasury has already invoked Section 223 of the Constitution which allows it to spend money without parliamentary approval. They approved the withdrawal of 45.67 billion shillings out of which 23 billion shillings were paid,” Martin Masinde, acting director of the Parliamentary Budget Office (PBO), told MPs.

“It comes just two months into the new financial year. They now want Parliament to regularize expenses, including salaries, which is not an unforeseen expense.

The Treasury now wants Parliament to approve the transferred money in accordance with the Constitution.

The revelations come amid complaints from key allies of Dr Ruto that they inherited a bankrupt government with no money in the treasury.

Vice President Rigathi Gachagua said it would take them about two to three months to get the economy back on track.

Although Dr Ruto was the incumbent vice president, former president Uhuru Kenyatta had thrown his weight behind opposition leader Raila Odinga, sparking a vicious campaign for the top job.

The Supreme Court unanimously upheld Dr Ruto’s election as president, rejecting several motions, including one filed by Mr Odinga and his running mate, Martha Karua.

The bench of seven judges said the petitioners failed to prove the polls were rigged.

Dr Ruto was sworn in as Kenya’s fifth president on September 13.

He will have to contend with soaring food and fuel prices, high unemployment and growing public debt used to fund development over the past 10 years under his predecessor.

The PBO, a unit of parliament that advises lawmakers on financial and budgetary matters, says the Treasury has yet to disburse 8.1 billion shillings to schools, 2.8 billion shillings to the State House, 1, 3 billion shillings for the military hospital and 16.5 billion shillings. for fuel subsidies from the unapproved allocation.

“This article of the Constitution has been hijacked by the Treasury. What is happening now is that the treasury takes money to fund what is not budgeted and comes to parliament to approve spending? Mr. Masinde asked.

He asked the 13th Parliament to propose a law that will require the Treasury to approach Parliament first and discuss the intention of spending before disbursing the money.

On August 31, former President Kenyatta presided over the groundbreaking ceremony for the construction of a 700-bed capacity Kenya National Research and Referral Hospital (KNRRH) at the army barracks of Kabete, Nairobi County.

The energy regulator scrapped the gasoline subsidy a day after Dr Ruto said the subsidies were unsustainable, which could add upward pressure on inflation.

For the first time in a year, it fully withdrew a 20.5 shillings per liter subsidy on petrol which will be sold in the month until October 14 and halved relief on kerosene and diesel at 26.25 shillings and 20.82 shillings respectively.

Dr Ruto said in a speech after being sworn in that the subsidies had been costly and subject to abuse, including causing artificial shortages of the very subsidized products.

The decision to scrap the subsidies will ease cash flow problems for traders following delays in getting compensation, resulting in arrears of nearly 50 billion shillings.

The president said the maize subsidy had gobbled up 7 billion shillings in a month with no impact on reducing the cost of food.