Africog: The Goverment Has Spent Trillions On Development Projects That Are Not Visible On The Ground

Africog:  The Goverment Has Spent Trillions On Development Projects That Are Not Visible On The Ground

The Jubilee administration has spent trillions in development projects but they are not visible on the ground, a study by Africa Centre for Open Governance shows. 

According to the report, the national and county governments spent Sh2.25 trillion and Sh334 billion respectively on development projects between 2013 and 2014. 

It means for every shilling spent by the county governments on development projects, the national government spent Sh6.70, almost seven times.

“These are mind-boggling figures. Where are these projects that the national government has sunk well over Sh2 trillion into?” the researchers ask. 

They allege the government has been inflating project budgets to steal money. 

“Projects are conceived for the purpose of siphoning the money out of the budget,” Africog said in its latest report. The study is titled “Highway Robbery: Budgeted Corruption as State Capture: A Case Study of Infrastructure Spending under the Jubilee Administration”.

Africog is a non-profit organisation that provides research and monitoring on anti-corruption, governance and public ethics issues in both the public and private sectors.

“Such is the mystery that Kenyans joke that to see the projects, you need to log onto the portal referring to the administration’s 2017 election campaign website”

The author of the study, economist David Ndii went on to explain that in absolute terms, county governments spent on average Sh7 billion per county, while the national government spent Sh47 billion per county.

The report says Kenyans should be experiencing seven times as much development impact from the national as from the county governments.

“It is very doubtful that there is a county where the national government’s development spending is felt more than the county governments’, or even CDF sometimes,” it said. 

The study examined budgets and expenditure in three key infrastructure sectors: electricity, roads and water.

In the roads sector, the study said there was a 20 per cent (Sh16 million per km) escalation in construction costs. “In financial terms, this translates to Sh49 billion, or 760 km of road equivalent,” it explained.

There was a Sh33 billion discrepancy between the expenditure on the national electricity grid reflected in the government budget and the actual cost of construction, the report said. 

The study found that the water sector is characterised by systemic flaws, stalled and outright ghost projects affecting nearly the entire portfolio of large dams.

The researchers said that there have been hugely inflated project pipeline and budgets that are way beyond the country’s water investment requirements.

The report shows that since assuming office seven years ago, the Jubilee administration has increased the country’s public debt four-fold, from Sh1.5 trillion to Sh6 trillion as at the end of December 2019.

The borrowing raised the country’s public debt to GDP ratio from 42 per cent to over 60 per cent, on par with the country’s historical peak indebtedness reached in the late 1990s.

“At the same time, the Jubilee administration has been stalked by “mega” corruption scandals,” the study said.

“Five cabinet secretaries have vacated office because of corruption allegations. The National Youth Service, one of the administration’s flagship programmes, was engulfed by two egregious corruption scandals.”

The report further noted that at the end of his tenure, former Auditor General Edward Ouko spoke of a phenomenon he termed “budgeted corruption.”

“It implies that the budget is inflated by monies that are earmarked to be stolen. Projects are conceived for the purpose of siphoning the money out of the budget. Ouko characterised such projects as exit lanes,” it added.

The study set out to test the hypothesis that the runaway corruption that has dominated headlines during the Jubilee administration is evidence of “budgeted corruption”.

It sought to establish the extent to which there was systematic deviation of project choice from Public Finance Management value for money norms, and whether that divergence could be construed to be “exit lanes” for budgeted corruption.