What Uhuru’s freeze on new projects means

President Uhuru Kenyatta addresses state officials during a meeting at the Kenyatta International Convention Centre on Friday, July 20, 2018. /PSCU

President Uhuru Kenyatta on Friday gave a directive freezing all new government projects until the ongoing ones are completed.

This, he said, is aimed at stopping wastage of resources and the habit of government agencies abandoning incomplete projects before jumping onto others.

He hitherto, sternly warned all government accounting officers that they will be held personally liable should they sanction new projects without express authority from the National Treasury.

The president spoke in a meeting attended by principals secretaries, Parastatal heads, vice chancellors of public universities, and chairmen of state corporations at the Kenyatta International Convention Centre.  

Uhuru's declaration means that monies already allocated in the budget for projects that are yet to kick off will lie idle. 

The only way to put them to use is if the president asks Treasury to present a supplementary budget in Parliament to have the funds transferred to projects that have already commenced.

A supplementary budget is a request to Parliament by Treasury for additional spending of public funds after the budget has been passed.

If such a supplementary budget is not prepared, then funds allocated to the yet to be started projects will have to be returned to Treasury at the end of the 2018/19 financial year.

However, ministry departments can still go ahead and sanction new projects so long as they do so in line with the Public Finance Management Act, 2016.

The Act allows for deviation from budgetary financial objectives subject to Parliamentary approval.

"The national government may, with the approval of Parliament, deviate from the financial objectives in a Budget Policy Statement on a temporary basis where such deviation is necessitated by a major natural disaster or other significant unforeseen event,” reads part of the act.

It states that Treasury shall provide a report to Parliament regarding the deviation, and shall include in the report reasons for and the implications of the deviation, proposals to address the deviation, and the period the deviation is estimated to last.

After following the above procedures, Treasury will publish and publicise the report made after its submission to Parliament after fifteen days.

This, therefore, means if an earthquake were to strike and destroy sections of road infrastructure, the Ministry of Transport is free to start new road projects in the affected area, subject to guidelines in the PFM Act 2016.

This Act also breathes new lease of life in projects that have stalled for years to be finally completed.