NAIROBI, Kenya— Controller of Budget Margaret Nyakango has raised red flags over the National Treasury’s fiscal management, revealing that Sh77.48 billion was spent outside the legal budget framework in the 2024/25 financial year.
In her report, Controller Margaret Nyakang’o noted that Sh66.54 billion of this amount was drawn directly from the Consolidated Fund to settle pending bills and salary arrears expenses that were largely foreseeable and should have been accounted for in the approved budget.
“Reliance on Article 223 to implement existing Government programmes or initiatives breaches Paragraph 40 (4) of the PFM Regulations, 2015,” the report stated.
“This suggests potential lapses in the budget formulation process and weaknesses in the budgeting cycle.”
Under Article 223 of the Constitution, the government can legally spend beyond approved budgets only in emergencies or unforeseen circumstances, subject to a cap of 10 percent of total allocations.
However, Nyakang’o cautioned that the provision has increasingly been treated as a routine tool to fund ongoing obligations, including road projects, medical doctors’ salary arrears, and higher education financing.
The report also highlights broader fiscal pressures, including Sh524.8 billion in pending bills, rising debt service costs, and heavy reliance on domestic borrowing. Such trends, Nyakang’o warns, threaten the credibility of Kenya’s fiscal framework and could strain the government’s ability to meet future financial obligations.
To address these challenges, the Controller recommended stricter planning and alignment of expenditure with operational realities.
She urged the Treasury to limit the use of Article 223 to genuine emergencies rather than predictable recurrent costs, emphasizing the need for disciplined budget preparation and execution.
Economists say extra-budgetary spending, if unchecked, risks inflating public debt and eroding investor confidence.
