National Assembly's Trade Committee Accuses Treasury of Sabotaging Key Ruto's Development Projects

Members of the National Assembly's Trade Committee have accused the Treasury Ministry, now led by John Mbadi, of stalling key development projects across the country by withholding critical funding. The accusations were made during a heated meeting on Tuesday with senior officials from the Treasury, where the committee expressed frustration over the failure to release appropriated funds to State Departments.

Embakasi North MP John Gakuya, who chairs the Departmental Committee on Trade, Industry, and Cooperatives, criticized the Treasury for what he described as a deliberate attempt to undermine the industrialization and manufacturing sectors. "Our biggest concern as a committee is that the National Treasury has decided to kill industrialization and the manufacturing sector by starving the state departments of funds," Gakuya, an ally of the ruling United Democratic Alliance (UDA), stated.

Aldai MP Marianne Kitany, also from UDA, echoed these concerns, questioning the Treasury's decision to deny development funds to state departments and agencies that are crucial for revenue generation, particularly at a time when the government is struggling to raise money. "For the government to collect more revenue in the key sectors of the economy, it has to invest funds to spur growth in the various sectors. How do you project to get revenue when you are not investing?" Kitany challenged Treasury officials.

The committee's grievances come as several key projects face uncertainty due to the Treasury’s failure to release funds allocated in the budget. Among these projects are six Export Promotion Zones (EPZs), each allocated Ksh500 million in the last financial year, but which have only received a total of Ksh300 million following a directive by President William Ruto.

The MPs also highlighted the Treasury's failure to release Ksh3.5 billion for the Coffee Cherry Fund, despite Parliament allocating Ksh4 billion for it in the 2023/24 budget. Additionally, Ksh350 million earmarked for the modernization of Kenya Planters Cooperative Union (KPCU) warehouses remains unallocated, despite being included in the Supplementary Budget II for the fiscal year 2023/2024.

Responding to the accusations, Treasury officials, led by Benard Ndungu, the Director General in charge of Accounting Services, cited a shortfall in revenue and a scarcity of cash resources as the primary reasons for the delays. "Due to the shortfall of revenue and scarcity of cash resources, the National Treasury usually applies administrative criteria by giving priority to public debt," Ndungu explained to the lawmakers.

He further emphasized that the government has been forced to prioritize recurrent expenditures, including security, salaries, county allocations, and social programs such as education and health, over development projects. The Treasury also disclosed that a total of Ksh218.5 billion had not been released to five state agencies under the Ministry of Cooperatives and Micro, Small, and Medium Enterprises (MSMEs) due to these financial constraints.

The ongoing standoff highlights the growing tension between the National Assembly and the Treasury, as lawmakers grapple with the implications of the budget shortfall on the country’s development agenda. As the government faces increasing pressure to meet its financial obligations, the fate of critical projects remains in limbo, raising concerns about the long-term impact on Kenya's economic growth and industrialization goals.