After a day of heated exchanges in Parliament over stalled constituency funding, Treasury Cabinet Secretary John Mbadi announced on April 16 that KSh 7 billion of the National Government Constituencies Development Fund (NG‑CDF) had been released, with another KSh 7 billion to follow before month’s end. His commitment aims to reduce funding arrears to one month, yet it also highlights the tightrope the government walks between development priorities, mounting debt obligations, and public-sector wage and county transfers.

Lawmakers’ frustration erupts

When the National Assembly convened on April 15, dozens of MPs rose to voice their fury over delayed NG‑CDF allocations. Constituents in every county depend on those funds for school bursaries, clean‑water projects, and health‑clinic upgrades. With term reopening just weeks away, headteachers and community leaders had warned that thousands of needy pupils might sit out classes if bursary disbursements didn’t arrive. Threats to stall House business underscored the depth of anger.

One MP declared that failing to pay NG‑CDF on time was a betrayal of the social contract between government and citizen, while another warned that reputations and votes could be lost if children were denied their education. The urgency contrasted sharply with the procedural calm MPs usually display—this felt personal, fueled by stories from home.

The role and reach of NG‑CDF

The NG‑CDF was created in 2003 to bring development decisions closer to the grassroots. Each of Kenya’s 290 constituencies receives an equal share of the fund’s annual allocation, managed by locally appointed committees. Over the years, CDF has financed everything from classroom construction and library refurbishments to rural road repairs and borehole drilling.

By mid‑2024, the fund’s annual size had grown to over KSh 50 billion—money earmarked explicitly for education, health, water, and small‑scale infrastructure. Constituency committees draw up their own priority lists, offering a degree of local ownership. Yet with great power comes great responsibility—and frustration when promised monies fail to land on time.

Introducing CS John Mbadi

John Mbadi Ng’ongo, a trained accountant with decades in public service, was sworn in as Treasury Cabinet Secretary in August 2024. A former chair of Parliament’s Public Accounts Committee, Mbadi earned a reputation for blunt assessments of government spreadsheets and no‑nonsense pursuit of value for money. His ascent to the Treasury was widely interpreted as a signal that the government would tighten its belt and seek fiscal discipline.

Yet now, Mbadi finds himself squeezed between that very discipline and the clamour for immediate development cash. His task: balance loan repayments and salaries without shortchanging local projects that lawmakers promised their constituents.

The April 16 announcement

Standing before a sea of expectant MPs, Mbadi confirmed that the Treasury had transferred KSh 7 billion to the NG‑CDF Board that morning. “We have honoured our commitment to clear part of the arrears,” he said, voice measured but firm. He then pledged an identical amount before April’s end, aiming to leave just one month’s funding outstanding.

He conceded that salary payments and county equity disbursements take first priority in the cash‑management cycle, meaning NG‑CDF releases must fit around them. Yet he insisted the delays were never intentional. “We will not allow children to suffer for bureaucratic delays,” he added, eliciting nods from several backbenchers.

The grinding machinery of public finance

Kenya’s budget is a complex web. Debt servicing alone—repaying loans, interest charges, and commercial‑paper costs—consumes over 40 percent of collected revenues. Salaries for national and county staff take another 30 percent slice, while governors and county assemblies together absorb roughly 26 percent. Security and pension obligations leave little slack.

In this environment, every disbursement must be carefully scheduled. A missed deadline for one obligation can cascade into arrears elsewhere. The NG‑CDF board, which has limited borrowing power, relies entirely on Treasury transfers. When those transfers slip, local projects grind to a halt—and MPs feel the heat.

Voices from affected communities

In Kisumu County’s Muhoroni constituency, headteacher Stella Achieng recounted how she had to send home 60 students for inability to pay fees by term start. “Parents came to me in tears,” she recalled. “Some had sold goats, others applied for loans. No one expected the delay to last so long.”

Over in Wajir, community elders described a drilling project for clean water that stalled at 80 percent completion. “We watch the rig stand idle,” said one elder. “Every day without water means illness and walking long distances.” The NG‑CDF pump, he said, would have changed lives this year.

These stories fueled MPs’ anger—no spreadsheet debate can match the raw impact of dry wells or locked classroom doors.

Political stakes and public trust

With a general election due in two years, every MP is keenly aware that voter goodwill can evaporate in a single term. Constituency projects are more than civic works—they are political currency. When bursaries arrive late or a bridge remains unfinished, citizens draw direct lines between broken promises and broken systems.

Opposition leaders seized the opportunity to frame the issue as government incompetence, while the ruling party stressed structural constraints and fiscal prudence. Yet both sides agreed: the NG‑CDF must flow predictably, or the social contract frays.

Mbadi’s broader fiscal roadmap

Beyond the October funding reprieve, CS Mbadi outlined a medium‑term debt management strategy to bring the public debt‑to‑GDP ratio below 55 percent by 2028. He spoke of deepening the tax base—digital‑VAT receipts, property‑tax reform, and a clampdown on informal‑sector underreporting—to generate new revenues.

He also touted the newly established Contingency Fund, which sets aside reserves for unforeseen national emergencies. Though small today, the fund’s gradual buildup could one day help smooth cash profiles without tapping NG‑CDF or other devolved allocations.

Parliamentary oversight in action

The NG‑CDF Act vests significant oversight power in Parliament’s Budget and Appropriations Committee as well as the Select Committee on NG‑CDF. Both panels have the authority to vet Board budgets and summon the CS when disbursements falter.

In this case, the threat of formal sanctions—from suspension of House business to censure motions—proved effective. Several committee chairs later praised Mbadi’s responsiveness, noting that robust scrutiny need not undermine good relations but can sharpen accountability.

Moving from crisis to cooperation

As the April tranche disbursement clears the board, MPs and the Treasury face a choice: return to adversarial brinkmanship, or build a collaborative mechanism to prevent repeat chaos. Many parliamentarians are pushing for:

• A published quarterly NG‑CDF calendar with fixed release dates;
  
• A parliamentary‑Treasury cash‑flow task force to anticipate pressure points;
  
• A small dedicated reserve within the Contingency Fund ring‑fenced for NG‑CDF emergencies;
  
• A digital portal where beneficiaries track their constituency’s funding status in real time.
  

Such measures, they argue, will transform the NG‑CDF from a political flashpoint into a model for transparent, responsive devolved finance.

Comparative lessons from neighbours

Kenya is not alone in wrestling with sub‑national funding. Uganda’s decentralization reforms have similarly run into cash‑flow bottlenecks, prompting a shift toward mobile‑money transfers to speed disbursements directly to local account offices.

In Tanzania, a pilot “conditional grant” model links tranche releases to pre‑clearance of project monitoring reports—rewarding well‑managed districts with faster funding.

Kenyan lawmakers say they will study these examples to see whether innovations can cut through bureaucratic gridlock while strengthening oversight.

The human dimension—beyond numbers

At its core, the NG‑CDF debate is about people—students awaiting bursaries, farmers depending on irrigation, parents hoping for better clinic roofs. These are “small” projects by national‑budget standards, but they warp into huge consequences in individual lives.

One young mother in Machakos, whose child fell ill when a school latrine collapsed, said she nearly gave up hope until constituents raised KSh 50,000 to fix it. “We need these funds trusted to arrive when they matter,” she said. “Not in October, not in January—but before we send our children home.”

Charting a path forward

With the second KSh 7 billion tranche due by April’s close, the immediate crisis may ebb. But the underlying tension between Kenya’s development ambitions and its fiscal realities remains.

CS Mbadi’s dual pledge responds to acute pressure, yet long‑term stability demands structural reforms—broader revenue mobilization, tighter debt controls, smarter cash‑management tools, and deeper parliamentary‑executive partnership.

For MPs, the lesson is clear: vigilance must give way to constructive dialogue. For the Treasury, the task is to build resilient systems that honour devolved allocations, even in tight budget months. For communities, patience must be met with accountability.

Above all, the April 2025 NG‑CDF saga should serve as a turning point: transforming a reactive scramble into a proactive framework that ensures every school desk, water pump, and health post is reliably funded—because true development depends on predictability as much as on good intentions.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

17th April, 2025