CorporateNews

President Ruto shields Eastern Bypass from budget cuts

President William Ruto’s wants to fast track the completion of Eastern Bypass that links Kenyatta family-owned Northlands City increasing budgetary allocations to cover construction of 10 kilometers up from the three kilometers that had been budgeted for.

Eastern Bypass, the 28-kilometer road, which stretches from City Cabanas on Mombasa Road to Ruiru, is one of the few roads exempted from the Kenya Kwanza government budget cuts to save on Kes47.3 billion under the road sector and instead has had its budget increased.

The multi-billion-shilling project is aimed at easing traffic on the key road that connects motorists from the busy Jomo Kenyatta International Airport and Mombasa-Nairobi highway to Thika Superhighway and will be key to the Kenyatta family-owned Northlands City’s estimated 250,000 people working and living in the metropolis comprising of residential, industrial and commercial units.

Most roads including 540 kilometres Mau Mau Road project, covering four counties in Mt Kenya region have been scaled down in the supplementary budget tabled in parliament as the government moves to check spending.

President Ruto had hoped to cut expenditure by up to Kes300 billion in a move that saw the Treasury scale down road construction targets across Kenya.

“The Approved Estimates have been revised to Kes174.0 billion under FY 2022/23 Supplementary Estimates No. 1. This comprises of Kes69.3 billion and Kes104.7 billion for current and capital expenditures respectively. This reflects a net decrease of Kes47.3 billion. The decrease is mainly due to budget rationalization,” Treasury Cabinet Secretary Njuguna Ndungu said in the supplementary budget.

The budget cuts, however, have not resulted in overall reduction in net spending with revised estimates showing increased expenditure from Kes3.36 trillion to Kes3.37 trillion albeit with a narrower borrowing target.

Read also: Kenya leaves rate at 8.75 percent bucking the trend in key economies in Africa

This is because the money saved from the budget cuts have gone into sticky expenses such as undisbursed expenses inherited from the previous administration, extra-budgetary spending, hustler fund launch, and a host of other subsidies to cushion mwananchi.

Budget cuts in the construction sector has hit the industry that has was heavily reliant on former President Uhuru Kenyatta’s mega infrastructure projects. 

Kenya’s construction sector growth fell to 4.3 percent in the third quarter of last year from 6.7 percent in 2021 coinciding with a decrease in the volume of imported Bitumen from 36,762 tonnes in the third quarter of 2021 to 24,930 tonnes last year.

Central Bank of Kenya (CBK) shows that cement production and consumption have dipped in the negative over the last six months in sync with the completion of mega projects such as the Nairobi Expressway.

“Cement there was a decline in June, July, and August. And really we talked to the cement producers and you can see there is that dip since mid-year, and they assess this as related to the completion of large projects, and I mentioned this last time, the expressway etc. But also some concerns about payments that are delayed,” CBK Governor Dr Patrick Njoroge  explained during the Monetary Policy Meeting briefing.

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