A bombshell audit report has revealed that Kenya has left a staggering Sh304.4 billion gathering dust in unspent funds across at least 14 major government projects. These funds, earmarked for critical infrastructure and development, have remained idle for up to five years.
The revelation comes from Auditor-General Nancy Gathungu, who sounded the alarm before the National Assembly’s Budget and Appropriations Committee.
Her warning is clear and urgent—Kenya is paying billions in penalties for loans it has not used, while essential projects stall and millions of citizens wait for promised roads, schools, and services that may never arrive.
Kenya Sits on Sh304bn Idle Funds While Development Stalls
The Auditor-General’s latest report lays bare a damning failure of budget absorption. Out of Sh515.1 billion allocated to flagship development projects over five years, only 40.9 per cent has been utilised. That leaves Sh304.4 billion untouched — money that was supposed to change lives, build roads, and lift communities.
Nancy Gathungu called it out plainly. Appearing before Parliament, she pointed to systemic delays, poor planning, and stalled execution. The result is a pile-up of unused cash and rising debt penalties.
Among the worst-hit is the Mombasa Gate Bridge project. Launched in 2019 with a budget of Sh49.05 billion, only Sh938.2 million — just 2 per cent — has been spent. The remaining Sh48.11 billion lies idle. This inactivity is not just wasteful — it’s expensive. Kenya continues to pay commitment fees on these unused loans.
Between 2020 and 2024, taxpayers shelled out Sh6.569 billion in such fees alone. That’s money lost to penalties — not a single road paved, classroom built, or hospital opened.
How Projects Are Failing to Spend Allocated Funds
The audit names several high-profile projects that have choked under the weight of bureaucracy, mismanagement, or simply inaction.
- East Africa Skills Transformation Project: Allocated Sh1.1 billion to run until 2024. By June, only 61 per cent of donor funds had been absorbed.
- Kapchorwa-Suam-Kitale and Eldoret Bypass Roads: Valued at Sh23.5 billion, these road projects had a 35 per cent undrawn balance by September 2023.
The trend repeats across multiple initiatives. Ministries receive the money, but the projects lag. Either contracts are delayed, designs remain incomplete, or red tape holds up execution.
This inefficiency is not just embarrassing — it’s legally questionable. The Public Finance Management Act demands that 30 per cent of the national budget be set aside for development. Kenya is failing this test.
In 2023/24, only 15 per cent of the Sh4.26 trillion total expenditure went to development. The 2024/25 projections offer little improvement, with just 25.8 per cent allocated — still below the legal mark.
Taxpayers Losing Billions to Commitment Charges
Idle funds don’t just sit quietly. They cost money. The government pays commitment fees to foreign lenders on undrawn loan amounts. These are penalties for borrowing money and not using it.
The numbers are alarming:
- 2020/21: Sh2 billion lost
- 2021/22: Sh1.48 billion lost
- 2022/23: Sh1.43 billion lost
- 2023/24: Sh1.58 billion lost
This is money wasted on inaction. The projects that should have used these loans — from roads to energy and education — failed to spend the money. The government still had to pay.
The Mombasa Gate Bridge, once touted as a game-changer for Kenya’s infrastructure, is now a prime example. Designed to connect the island city to the mainland and ease transport, its budget remains mostly unspent. And the country is being penalized for the delay.
Clause II (2.03) of the financing agreement confirms it — undrawn funds attract penalties. The longer the delay, the more Kenya pays without receiving the benefits.
