Budget II 2024/25: Major Cuts Hit Housing, Water, Energy, and ICT

The Kenyan government has slashed billions from key sectors in the latest Supplementary Budget II for 2024/25.

The revised budget, tabled in Parliament, aims to align expenditures with available funds through June 2025. However, state departments such as Housing, Water, Energy, and ICT have suffered the deepest cuts.

These reductions could slow down major projects, affecting essential services and development goals.

Billions Cut from Key Sectors in Supplementary Budget II 2024/25

The Supplementary Budget II for 2024/25 has significantly reduced funding for crucial departments, impacting ongoing projects and future initiatives. Below is a breakdown of the hardest-hit sectors:

Water Department Loses Ksh.22 Billion

The State Department of Water faces the biggest cut, with its budget slashed from Ksh.49 billion to Ksh.27.8 billion, a massive decrease of Ksh.22 billion.

The revised allocation includes Ksh.6.6 billion for recurrent expenditure and Ksh.21.2 billion for development projects. This cut affects crucial programs, including:

• Water resource conservation and protection
• Water resource management
• National water and sanitation investment

These reductions could delay clean water supply projects and impact water infrastructure nationwide.

Housing Budget Shrinks by Ksh.11.6 Billion

The Affordable Housing initiative, a flagship project of President William Ruto, also faces budget cuts.

The State Department for Housing’s budget dropped from Ksh.86.5 billion to Ksh.74.9 billion, marking a reduction of Ksh.11.6 billion.

According to the Treasury, the reduction is mainly due to lower donor funding for capital projects. However, an additional Ksh.64.5 million was allocated for salaries under recurrent expenditure. This cut may slow down affordable housing projects and urban infrastructure improvements.

ICT Sector Budget Slashed by Ksh.7.8 Billion

The ICT sector, a key driver of Kenya’s digital transformation, has seen its budget drop from Ksh.20 billion to Ksh.12.2 billion, a loss of Ksh.7.8 billion.

Some of the affected projects include:

• ICT infrastructure connectivity
• Business Process Outsourcing (BPO) development

Notably, the budget for e-government services, a major initiative in President Ruto’s administration, was reduced from Ksh.3.5 billion to Ksh.2.4 billion. This reduction could slow efforts to digitize government services, affecting efficiency and accessibility.

Energy Sector Faces Ksh.7.6 Billion Cut

The Energy sector, essential for powering homes and industries, has also suffered. Its budget dropped from Ksh. 54.1 billion to Ksh. 46.4 billion, a reduction of Ksh.7.6 billion.

This cut could affect ongoing renewable energy projects, electricity connectivity programs, and grid expansion initiatives. Reduced funding may also delay government plans to increase access to affordable electricity.

Other Departments Affected By Supplementary Budget II 2024/25

Apart from Housing, Water, ICT, and Energy, several other state departments have faced budget reductions, including:

• Cabinet Affairs
• Parliamentary Affairs
• Diaspora Affairs
• Transport
• Irrigation

These cuts could lead to delays in policy implementation, infrastructure development, and service delivery.

What These Budget Cuts Mean for Kenyans

The Supplementary Budget II 2024/25 shows the government’s effort to realign expenditures, but the deep cuts in critical sectors raise concerns.

Reduced funding for water, housing, ICT, and energy could slow down key infrastructure projects, limit access to essential services, and affect economic growth.

As Parliament debates this budget, Kenyans will be watching closely to see how the government balances financial constraints while ensuring crucial projects continue.

The impact of these cuts will be felt across the country, particularly in sectors that drive economic progress and social welfare.