Home ECONOMY EDITORIAL: Seal all loopholes in public projects spending

EDITORIAL: Seal all loopholes in public projects spending

by biasharadigest

EDITORIAL: Seal all loopholes in public projects spending

 Central Bank of Kenya
The Central Bank of Kenya (CBK) building in Nairobi. FILE PHOTO | NMG 

Revelations that half of the 1,000 public projects currently being implemented in Kenya have stalled are indeed quite shocking.

According to the International Monetary Fund (IMF), a staggering Sh1 trillion or 12 percent of the gross domestic product, is now required to complete the stalled projects.

To say that the country has a long way to go in plugging revenue leakages and loopholes would be an understatement. It is a clear pointer to the numerous concerns that have previously been raised about the country’s lax planning and public spending decisions.

Having such a huge number of stalled projects has serious trickle-down ramifications as it ultimately leads to delayed payments to contractors and subsequently job losses. It also makes a mockery of government austerity measures that are aimed at lowering frivolous spending by State officials. These are headaches that the suffering Kenyan economy cannot afford to get with the crunch affecting many sectors. A clear pointer is the latest Central Bank of Kenya (CBK) data showing that the cash circulating outside banks dropped to Sh176.9 billion in September — the lowest since September 2015.

We aver that the government cannot afford to ignore the IMF warning since the Bretton Woods institution has cautioned that the number of stalled projects is increasing.


It notes that one of the major causes of the stalled projects is the failure to pay contractors, insufficient allocation of funds to projects and litigation. Many of the public projects lack a cost-benefit analysis, standardised appraisal and selection plans, effectively failing to match expenditure to available financial resources and producing incomplete white elephant projects.

Another indictment on our government policymakers is the clear lack of gatekeeping functions in monitoring projects right from their inception to conclusion. It makes no sense to launch numerous projects at once without setting clear goals at the beginning. Our politicians are notorious for rolling out projects at taxpayers’ expense without going through the budget guidelines only to abandon those started by their rivals and embarking on new ones regardless of the cost. As a result, we have very many elephant projects scattered across the country.

We urge the government to ensure that no new or unbudgeted for project is allowed to take off if there is still an incomplete and similar project.

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