The Kenyan government has initiated a sweeping review of all donor-funded projects, aiming to halt a cycle of waste that has seen billions of shillings lost on initiatives misaligned with national priorities. Treasury Cabinet Secretary John Mbadi confirmed that a joint team from his ministry and the Deputy President's office is scrutinizing the entire portfolio of foreign-backed projects to ensure they serve the public interest and provide value for money.

The move comes amid startling revelations that 234 projects, valued at a colossal Sh2.17 trillion, are at risk of collapse. The immediate cause is a Sh130 billion shortfall in counterpart funding—Kenya's required contribution—which triggers hefty commitment fees on undrawn loans, costing taxpayers dearly for delayed or dormant projects. Officials argue that many of these projects are "supplier-driven," pushed by donors' commercial or strategic interests rather than being demanded by local needs.

Aligning Aid with Kenya's Blueprint

Under the new directive, no donor-funded project will get the green light unless it aligns with Kenya's core development strategies, such as Vision 2030 and the Bottom-Up Economic Transformation Agenda (BETA). "We will not allow a donor-funded project to start if it does not meet the set conditions," Mbadi emphasized before the Senate Public Accounts Committee. This policy shift is designed to wrest back control over the development agenda and ensure that borrowed funds directly contribute to uplifting the lives of Kenyans.

The problem is not new. Analysts have long pointed to poor coordination, duplication of efforts, and a lack of consultation with beneficiaries as significant hurdles to the effectiveness of foreign aid in the country. An Auditor General report highlighted the scale of the financial leakage, showing that Sh515 billion earmarked for donor projects remained unused by the end of the 2023/24 financial year, attracting unnecessary fees.

The Real Cost to Kenyans

This systemic inefficiency has a direct impact on the Kenyan household. When mega-projects stall, it's not just abstract numbers on a ledger; it's a delayed hospital, a road not built, or a clean water initiative that never materializes. Furthermore, the financial penalties incurred contribute to the national debt burden, which is ultimately shouldered by taxpayers through austerity measures and increased taxes on basic goods.

The government's review aims to free up fiscal space and redirect funds toward projects that can genuinely spur economic growth and improve livelihoods. By insisting on a demand-driven model, the state hopes to break the expensive habit of accepting loans tied to external agendas. The success of this review will depend on rigorous enforcement and transparent communication, ensuring that future agreements put the needs of Kenyans first, transforming foreign aid from a potential liability into a powerful tool for national progress.