The World Bank has called on Kenya’s National Treasury to inform Parliament promptly when emergency spending requests under Article 223 arise, in order to curb the rise of supplementary budgets.
Article 223 of the Constitution permits the national government to spend money not previously appropriated, but requires parliamentary approval within two months after the first withdrawal, and the multilateral lender says the provision has been abused for non-pressing expenditures.
In a report released last week, the World Bank said Parliament should be notified before the expenditure occurs and that supplementary proposals should receive scrutiny comparable to the original budget, adding that “Requests for additional spending must be supported by clear evidence demonstrating that the expenditure is genuinely unforeseen, unavoidable, and that it cannot be met through existing budget reallocations.”
The bank notes that regulations under the Public Finance Management Act restrict supplementary budgets to unforeseen and unavoidable costs, yet additional spending has often covered predictable needs, weakening the approved budget’s role and reducing public oversight.
World Bank calculations show that total expenditure by ministries, departments and agencies deviated from the original budget by a record 15 per cent in the final supplementary budget for the financial year ended June 2026.
The government usually tables two supplementary budgets each fiscal year; 2024/25 saw three, and the 2025/26 budget approved at KSh4.239 trillion in June 2025 rose to KSh4.656 trillion after the second supplementary, before ending the cycle at a lower KSh4.484 trillion in June 2026.
The divergence between approved budgets and fiscal outturns has eroded both the overall fiscal balance and the primary balance, increasing financing needs and delaying debt-reduction progress.
Treasury officials have previously relied on realistic revenue and expenditure forecasts to limit supplementary budgets, but the exchequer is preparing to table its first supplementary for the 2026/27 cycle after higher requests from ministries amid weak domestic revenues.
Principal Secretary to the National Treasury Chris Kiptoo told the National Assembly Finance and National Planning Committee that “The problem right now is that spending pressures are very high. I am getting requests every now and then from MDAs asking for more money, but we are unable to raise corresponding revenues.”
The upcoming supplementary budget is expected to cover pending bills of less than KSh50 million and to provide capital infusion to Kenya Airways.
The World Bank says amending PFM regulations could tighten off-budget spending, while changing Article 223 itself would be difficult, and it is discussing subsidiary regulatory reforms with the government.
Senior Economist at the World Bank Group Richard Walker said, “It’s obviously tough to amend the provision in the constitution, so for now our conversation with the government is looking at subsidiary regulations, potentially amending the PFM Act and its regulations. Article 223 spending has been one of the routes that have allowed supplementary budgets to go out of control.”
