How Treasury Spent Money in the First Month of the Financial Year

The national government spent its opening month of the new financial year servicing debt at nearly four times the rate it funded new development projects, according to data from the Treasury.

• Of the KSh 293.72 billion the Treasury released to the entire national government in July, KSh113.75 billion (about 39%) went to service public debt. 
• The item was larger than everything the government spent on development projects across all ministries and state departments combined, which came to just KSh29.33 billion.
• The pattern held even as revenue collection got off to a soft start, as tax receipts totaled KSh195.30 billion in July, equal to 6.83% of the KSh2.86 trillion targeted for the full year. 

Non-tax revenue fared worse, at just 3.6% of its annual target and the Treasury recorded zero shillings in external loans and grants in July, despite budgeting for KSh612.33 billion of it over the year. To cover the gap, the Treasury leaned on domestic borrowing, pulling in KSh138.25 billion in the month, more than it collected in tax revenue for the same period and slightly ahead of the pace needed to hit its full-year borrowing target.

Among the ministries and agencies that did get funded, the Teachers Service Commission (TSC) topped the list with KSh33.57 billion, Kenya's single largest recurrent payout in July, followed by the State Department for Basic Education at KSh23.55 billion, and the Ministry of Defence at KSh19.12 billion. The National Police Service received KSh9.57 billion, while the National Intelligence Service got KSh5.36 billion. State House received KSh939.5 million in recurrent funding in July, 7.51% of its KSh12.51 billion annual allocation, plus KSh150 million toward its KSh1.03 billion development budget. 

On the development side, the State Department for Sports received KSh3.3 billion in July, which amounts to 96% of its entire KSh3.43 billion development budget for the whole year. No other state department came close to that pace. 

Elsewhere, the picture was thinner as the Judiciary, budgeted KSh27.07 billion for the year, received nothing in July. Neither did the Independent Electoral and Boundaries Commission (IEBC), which has a KSh24.9 billion annual allocation, nor the Senate, the Public Service Commission (PSC), or the state departments for Foreign Affairs, Vocational and Technical Training, Housing, Water and Sanitation, Trade, and Energy, among others.

On the development budget, the State Department for Roads, with the year's largest single development allocation at KSh74.93 billion, saw none of it released in July.

Overall, the Treasury released just 6.18% of the KSh4.75 trillion it plans to spend on the national government this year, below the roughly 8.33% mark a flat, evenly-spread year would imply.