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Tuesday, August 3, 2021

Public servants spent billions on foreign travel and entertainment during COVID-19 lockdown

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Public servants in the National government spent billions on foreign trips, entertainment and hotels at the height of the COVID-19, despite austerity measures in place.

In foreign travel alone, public servants spent Sh1 Billion in the six months to December 2020, when most of the countries had instituted lockdowns.

Controller of Budget (COB), Margaret Nyakang’o, in her National Government Budget Implementation Review showed that much of the spending, estimated at Sh628 million, was spent within the four months of lockdown, when international travel was banned – between July and September 2020.

However, the foreign expenditure in the first-half of the current financial year ending June 2020, was a drop of 68.7 per cent. 

In the same period in the Financial Year (FY) 2019-20, Ministries, Departments and Agencies (MDAs) spent Sh3.18billion to travel outside of the country.

After four months of being grounded, domestic commercial and passenger flights resumed on July 15, while international travel resumed on August 1.

The COB report showed State officials spent Sh1.9billion on hospitality at a period when hotels and restaurants remained largely closed in compliance with the safety and health guidelines issued by the Ministry of Health.

“The National Treasury should ensure exchequer issues to MDAs and counties are released as per their annual work-plan and cash flow projections,” said Nyakang’o.

The performance in budget implementation during this period was slow compared to a similar period in FY 2019-2020.

Receipts into the Consolidated Fund, national government’s bank account at the Central Bank stood at Sh1.20trillion, which was 42.5 percent of the annual target, recording a decline compared to Sh1.25 trillion received in a similar period of the FY 2019-20 (47 per cent of the annual target).

“The decline could be attributable to low economic activities occasioned by the measures introduced by the government in mitigating the spread of the pandemic,” she said.

The effects on economic activities included loss of employment due to closure of businesses in the manufacturing and hospitality industries, a decline in foreign trade volumes, reduction on Value Added Tax from 16 per cent to 14 per cent, Pay as You Earn and Corporate tax from 30 to 25 per cent, among other tax measures.

Exchequer issues to MDAs and counties in the reporting period were Sh1.18 trillion representing 42.2 percent of the net estimates.

This comprised Sh139.35billion for development expenditure, Sh917.40 billion for recurrent expenditure and Sh123.96billion towards county governments representing 35.9 percent, 43.8 percent and 39.2 percent respectively.

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