The Equalisation Fund Board has come under scrutiny for reportedly financing development projects that fall outside its remit.
While appearing before the National Assembly Finance and National Planning Committee on Wednesday, July 16, the MPs expressed concerns over the fund's the misuse of billions of shillings meant for the provision of water, roads, health facilities, and electricity in marginalised areas.
Intended to bridge the development gap by improving the quality of basic services in marginalised areas to the level comparable to the rest of the nation, the Equalisation Fund is meant to address priority needs like food insecurity, health, water, sanitation, as well as electricity and energy needs by funding short-term projects on the same.
However, the committee found that the fund had financed projects like laying of cabros on pavements, street lighting, staff housing, and kitchen renovations rather than focusing on the provision of basic services as enshrined in its mandate.
It was further discovered that the fund had financed projects meant for the National Government Constituencies Development Fund (NG-CDF), like the construction of classrooms, while also duplicating county governments’ functions.
The committee also scrutinised the 310 ongoing projects, pointing out glaring inconsistencies in their implementation status.
In one such instance, a five-acre irrigation scheme project cost Ksh2.6 million, while the same project on a ten acre land was allocated Ksh3.6 million in the same locality.
“There are some questionable projects like the construction of a staff house at Chalaluma Dispensary in Witu, Lamu, at a cost of Ksh6.2 million. If projects are this arbitrary, how can we ensure value for money?” the committee chair, Molo MP Kuria Kimani, asked.
"The projects are so diverse that even if you allocate money to the fund for 10 years, it will never make sense.”
In another case, the board had indicated that a bridge project in Turkana South constituency was only two per cent complete, while the area MP, John Ariko, who is a member of the committee, noted it was 40 per cent complete, accusing the board of presenting misleading reports.
In its defence, the board stated that its role is to fund projects determined by the Commission on Revenue Allocation (CRA), with the board chair, Mahboub Mohamed, stating, “The Equalisation Fund has no role in identifying beneficiaries and needs of a region. This is done by the CRA."
"The unpredictable movement of funds has resulted in many audit queries. We have people queuing for pending bills," Engineer Mohamed explained.
Mohamed further claimed that the total entitlement to the Equalisation Fund from the Treasury stood at Ksh80 billion as at the end of June 2025, further saying that only Ksh39.89 billion was appropriated to the Equalisation Fund, out of which only Ksh15 billion had been released to the Fund.
