Government in buying frenzy ahead of Budget

Two days before the reading of the annual Budget, government ministries were Monday still in a spending frenzy to empty public coffers before Budget Day.

Ministries that do not spend all the money they are allocated are penalised by having a similar amount removed from their allocation the following financial year.

In the last three days, procurement officers and chief finance officers across the civil service have been rushing to make hurried and in some cases unnecessary purchases — literally burning the midnight oil — to ensure that all the money in the vote book is spent.

Planning to borrow

But even as the government is racing to spend the money, it is planning to borrow Sh109 billion from the domestic market, the highest such borrowing in budget history, risking higher prices and interest rates.

Suppliers were on Monday said to be having a field day because with ministries under pressure to spend the money within a short time lengthy procurement procedures and regulations were probably being circumvented.

The frenzy of last-minute spending just before Budget Day is common.

But this year’s case would appear to have been complicated by hitches experienced by the IFMIS information technology system that processes all payments by the government.

The system has been rolled out in more than 30 line ministries. In recent months, it has had to be shut down several times over the controversy surrounding the accuracy of this year’s supplementary budget.

Controversy

The dust raised by the controversy caused Finance minister Uhuru Kenyatta, also the Deputy Prime Minister, to print fresh budget documents, which inevitably led to the shutting down of IFMIS, and consequently a temporary freeze in government spending.

“We are catching up on lost time”, said a procurement officer in the Ministry of Local Government who worked over the weekend to commit funds.

But Financial Secretary Mutua Kilaka told the Nation that the government had sent a circular to all those with authority to incur expenditure to stop buying at the end of the financial year.

Transactions

“We have stopped any transactions especially procurement to avoid the rush expenditure. The use of government funds during this period could cause unhealthy behaviours,” he said.

But the rush expenditure with upfront procurement of office stationery, petrol, repairs and refurbishment of offices, payment of casual workers and contractors continued.

A senior Finance official said some departments were buying now because there will be no money for three months as they wait for Parliament to approve the ministry budgets.