The relationship between budget allocation and spending by ministries in Kenya
Abstract
The fiscal policy in Kenya has remained the most challenging and complex area of
macroeconomic management characterized by persistent budget deficits, rising debt
burden, persistent low economic growth rates, high interest and inflation rates. In
addition, public finance utilization and management has been poor allegedly due to high
level of corruption; poor accountability; improper procurement and tendering; over invoicing;
wasteful expenditure; lack of discipline and proper work ethics in the public
sector; and lack of openness in the budget process. The objective of the study was to
establish the relationship between budget allocation and spending by ministries in Kenya.
The study adopted a descriptive design and targeted 41 government Ministries. Secondary
data was collected from The National Treasury and Controller of Budget for the period
between the financial years 2008/09 to 20012/13. The study established that budget
allocation strongly influence spending by ministries in Kenya. The amounts of money
allocated to the ministries determine the spending priorities and the extent to which the
ministries can carry out their mandates. The study recommended that success rates in the
expenditure should be considered during budget allocations; government should emphasis
on meeting the funding targets that instruct government agencies to limit their budget
requests by specific amounts; there should be an integrated financial framework that
monitors the link between budget allocation and government spending; government needs
to clearly articulate outcomes in the budget allocation process, and develop the internal
capability to enable timely and accurate measurement of both the outcomes delivered and
the costs incurred and; further research on the implications of devolution on the budgetary
process and the spending by government ministries as well as spending by county
governments.
Publisher
University of Nairobi