Kenya economy wobbles on diminished government spending
Kenya’s economy has been on a rough patch recently, a circumstance partly caused by reduced government spending on infrastructure projects.
Recent disclosures from the Treasury reveal that the government used Kes283 billion on development projects, of the Kes2.35 trillion spent by the national government in the 2021/22 fiscal year.
The amount comprises about 12 percent of the national government spending, although it is exclusive of foreign funds earmarked for development projects.
This fraction of expenditure on such projects as roads and bridges was the smallest in the past eight years according to a Business Daily exchequer analysis.
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Previous years saw considerably higher expenditure, with project spending taking up 13.67 percent of the national government budget in 2021, and 15.60 percent in 2020.
Through project spending, the government advances infrastructure and contributes to currency circulation in the country through the procurement of raw materials, which ultimately livens up the economy.
With the government being the most capable monetary player in the economy, suppressed infrastructure spending as seen in this financial year only limits economic activity.
Also, uninspiring government spending adversely affects contractors, cement and steel manufacturers, and thousands of workers in the construction value chain, who chiefly benefit from public spending.
