Cost of running public offices up by a record Sh199bn

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The cost of running offices under the national government jumped by a record Sh199.2 billion in the financial year to June 30, pushing the operations bill above Sh1.3 trillion despite a continued drive to contain recurrent spending.

According to the Treasury, expenditure on operations and maintenance rose by 17.82 percent to Sh1.317 trillion, up from Sh1.118 trillion a year earlier.

It was the largest annual rise as per Treasury records, highlighting the growing cost of keeping ministries, departments and agencies running despite austerity measures and procurement reforms.

The spending covers routine government costs like travel, transport, fuel, supplies, repairs, maintenance, hospitality, training, electricity, water and communication.

The jump in expenses was higher than inflation, which averaged 4.87 percent in the 12 months to June 2026. It means government operating costs rose by almost four times the pace of the general rise in prices.

The increase was nearly three times the Sh67.4 billion rise recorded in financial year 2024/25 and more than seven times the Sh26.5 billion increase in 2022/23.

It also marked an acceleration from the previous financial year when operations and maintenance expenditure rose by 6.4 percent.

The government’s operating bill has more than doubled from Sh653.7 billion in 2020/21 to Sh1.317 trillion in 2025/26. It comes at a time the Treasury maintains that the government is implementing measures to strengthen expenditure.

“The government continues to implement measures to enhance expenditure control and ensure value for money in spending,” Treasury said in the 2026 Budget Policy Statement.

“The government’s effort to streamline operations and maintenance will enhance efficiency by reducing costly repairs and extending asset life cycles.”

Among the measures is continued enforcement of austerity aimed at reducing recurrent expenditure, alongside procurement reforms and the digitisation of government purchasing.

The end-to-end e-Government Procurement system was launched in July 2025 to replace fragmented and manual processes with a centralised digital platform.

Treasury says more than 1,500 procuring entities and at least 33,000 suppliers have registered on the platform.

It has been merged with the Integrated Financial Management Information System (IFMIS), Business Registration Services, e-Citizen and i-Tax as Treasury seeks to improve transparency and reduce inefficiencies.

The Treasury is also relying on better management of government assets to contain maintenance costs and reduce spending arising from inefficient use of facilities.

The reforms include commercialising public land, road corridors and training, improving office-space allocation and standardising leasing arrangements in government institutions.

Treasury is developing a comprehensive leasing framework to guide ministries, departments, agencies and counties in managing assets while creating opportunities for private-sector investment.

The government says it is piloting a Human Resource Management System across ministries and departments as part of efforts to strengthen management and control of public resources.

Despite the reforms, the latest figures suggest that the overall cost of government operations remains under pressure, raising questions on whether the measures are translating to lower spending.

The data does not show which individual spending categories accounted for the Sh199.2 billion rise, leaving the composition of the increase open to scrutiny. Operations and maintenance expenditure rose by Sh186 billion in 2021/22 ahead of the General Election before slowing to a Sh26.5 billion rise in the financial year 2022/23 – the first full financial year in President William Ruto’s administration.

It then jumped by Sh184 billion in 2023/24, followed by a Sh67.4 billion increase in 2024/25 before reaching the record Sh199.2 billion rise last year.

The slower 2024/25 increase followed the Gen Z protests against higher taxes and government wastage, which forced the administration to withdraw the Finance Bill, 2024, and impose spending cuts.

The cuts included halving spending on renovations, travel and hospitality, scrapping office refurbishment budgets and suspending new vehicle purchases except for security agencies.

Ministries were also ordered to halve advisers, a move that was expected to restrain growth in government operating costs.

Reporting originally appeared via Business Daily. Read the full source for additional context.