Treasury wants changes to procurement law

February 4, 2011

, NAIROBI, Kenya Feb 4 – The Ministry of Finance is pushing for amendments to the Procurement Act as it seeks to speed up implementation of projects under the Economic Stimulus Program (ESP).

This comes as the ministry faults lengthy procurement procedures for the slow disbursement of finances to fund key projects.

Finance Minister Uhuru Kenyatta said on Friday that sealing all loopholes associated with the program would improve its effectiveness.

"There are ways and means that can be used to help fast track the procurement process so that these projects are implemented on time and we all benefit from them," Mr Kenyatta said.

The Sh22 billion-stimulus program which was initiated in the 2009/2010 financial budget to jump-start the economy following its slump, has been a success in putting the economy on a growth path.

Kenya\’s economy plummeted from a high of 7.1 percent in 2007 to 1.7 percent following twin effects of the post election violence and the global economic crisis.

However, there have been concerns over failure to spend the allocated funds as a result of bureaucracy and other bottlenecks.

The Finance Minister said his ministry was working with the Public Procurement Oversight Authority to amend the Act to suit the ESP.

Projects under the stimulus program range from agriculture, industrialisation, healthcare and education, which are sectors the government feels have a multiplier effect on the economy.

Mr Kenyatta said the program, which is currently in its second phase, has received an estimated Sh30 billion with projects at various levels of implementation.

Given the relative success of the program, the Ministry of Finance has said that it was considering suspending funding the economic stimulus program as it weighs whether the economy can sustain itself in the future.

Should the Treasury discontinue funding the program, line ministries will be expected to cater for any envisaged costs associated with these programs under their dockets.

The Ministry of Finance recently launched a monitoring website for the stimulus program aimed at making it more efficient, accountable and transparent to the public, which officials say is critical to accelerating economic growth.

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