Kenya’s budget watchdog flags record KSh209B in unplanned government spending

The highest use of emergency constitutional spending powers in four years raises urgent questions about fiscal discipline and whether austerity commitments mean anything in practice

By Grace Wanja

Kenya’s Controller of Budget Margaret Nyakang’o yesterday flagged a record KSh209.37B in government expenditure approved outside the national budget in the 2025/2026 financial year, the highest deployment of emergency constitutional spending powers recorded in at least four years and a figure that directly contradicts the Treasury’s stated commitment to fiscal consolidation.

The spending was authorised under Article 223 of the Constitution, a provision that permits urgent, unforeseen expenditure not previously appropriated by Parliament. In a single financial year, the government used that provision to approve KSh21.47B in development expenditure and KSh187.90B in recurrent expenditure — routine operational costs that, by their very nature, raise the most pointed questions about why they were not anticipated and budgeted for in the first place.

Controller of Budget Margaret Nyakang’o did not soften her assessment. The scale of the figure is significant, but it is the trend she finds most troubling. “What we should be asking is why it’s getting more and more frequent,” she said. “One of the reasons we cannot ignore, and that most of these entities raise, is that they tried to budget for these items but were not given the funds. Later, they find that they cannot operate without the funds, so they now come through the door of Article 223.” In other words, Article 223 is increasingly functioning not as a safeguard for genuine emergencies but as a back channel for funding that was denied through the normal appropriations process — a distinction with serious implications for parliamentary oversight and budget credibility.

The historical trajectory sharpens the concern. In the 2022/2023 financial year, KSh103.68B was approved under the provision, with KSh69.2B ultimately disbursed. The following year saw approvals fall sharply to KSh65.4B, with only KSh19.2B spent. In 2024/2025, approvals rose again to KSh72.24B, of which KSh66.56B was utilised. The leap to KSh209.37B in the current financial year is not a gradual drift — it is a dramatic acceleration that demands explanation from the National Treasury.

Stephen Otieno, Assistant Director of Budget Implementation at the Controller of Budget’s office, confirmed that the nature of the spending is as troubling as its volume. “Our concern is that some of them are related to day-to-day operations,” he said. “Our concern was the rising use rather than the increase, as well as the nature of some of the operations that were being funded.” Day-to-day operational costs — salaries, utilities, supplies — are precisely the categories that should never require emergency constitutional authorisation. Their appearance under Article 223 in such quantities suggests a budgeting process that is either deeply dysfunctional or being deliberately circumvented.

The implications for Kenya’s fiscal position are direct. The government has repeatedly committed to reducing its spending and narrowing the deficit, commitments made to both domestic audiences and international creditors monitoring Kenya’s debt sustainability. A KSh209B spike in off-budget expenditure — equivalent to a significant share of total government spending — undermines those commitments in the most visible way possible. It also makes it considerably harder for Parliament, civil society and the public to hold the executive accountable, since spending approved under Article 223 bypasses the standard appropriations scrutiny that gives the legislature its primary oversight role.

Nyakang’o raised two additional concerns that extend the accountability problem beyond emergency spending. The first involves county investment conferences and the bodies organising them. An increasing number of counties have established investment promotion entities to attract private capital to their regions — an initiative with obvious developmental merit. But Nyakang’o pointed out that these bodies operate entirely outside the legal framework governing public financial management. “These investment bodies are not legal entities. They are not allowed; they are not in the PFM Act,” she said. “You can’t find it anywhere, and so they don’t even report on these investment forums.” The practical consequence is that significant financial activity connected to public entities is occurring with no reporting obligation, no audit trail and no accountability mechanism.

The second concern involves Parliament itself. The Controller of Budget acknowledged that her office’s visibility into how the National Assembly utilises its annual Exchequer allocations is severely limited. “From the CoB’s point of view, we cannot really go further than taking it as other expenses,” Nyakang’o said. “The Auditor-General is allowed to dive in and find out what they are all about. To answer you, we don’t have visibility beyond the budgetary limits and what has been reported to us.” A legislature that scrutinises executive spending while shielding its own allocations from equivalent scrutiny creates an accountability gap that weakens the entire oversight architecture.

Taken together, these findings present a damaging picture. Kenya’s budget watchdog is raising alarms about off-budget executive spending at record levels, county bodies operating outside the law and parliamentary expenditure that falls beyond effective independent review — all in the same financial year that the government is publicly committed to fiscal discipline.

The question Nyakang’o is really asking is not a technical one. It is whether Kenya’s public financial management framework is being treated as a binding constraint or as a set of procedures to be worked around when inconvenient. At KSh209B and rising, the answer is becoming harder to avoid.

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