This archive report was first published on 7 October 2019.
On October 7, 2019, the National Treasury building in Nairobi was a symbol of the country's economic growth. According to recent data, counties have made a significant stride in development spending, with a 62 percent growth from the previous year, reaching a total of Sh107.4 billion.
This increase is commendable and, if sustained, can have a transformative impact on the country's economy. In recent years, counties have faced criticism for their extravagant spending on foreign trips, allowances, and other non-development expenditure, despite a deterioration in critical services and dilapidated infrastructure.
However, the rise in spending on development projects, such as roads, water, and real estate, is good news. It spurs economic growth by creating jobs and provides an opportunity for local firms to thrive. Additionally, more money will be circulating in the counties, further stimulating economic activities and boosting taxes.
Good infrastructure creates a good environment for investment and enhances the competitiveness of goods produced locally. While the current development spending is a step in the right direction, some counties still need to improve their mix of development and recurrent spending, including addressing corruption and embezzlement.
Currently, development spending accounts for only 28 percent of the total expenditure, which is below the recommended 30 percent. This indicates that there is room for improvement.
