President Ruto announces Sh177bn budget cuts

President William Ruto has announced a Sh177 billion spending cuts and Sh169 billion in additional borrowing to plug the budget hole left after the withdrawal of the Finance Bill, 2024.

President Ruto, in a live address from State House, said the government would present a proposal to the National Assembly to approve the expenditure cuts after the withdrawal of the Bill intended to raise Sh346 billion in new taxes.

This, the President said, would ensure funding of key budget lines, including the hiring of 46,000 Junior Secondary School teachers on a permanent and pensionable basis, recruitment of medical interns, provision of money to buy milk from farmers at Sh50 per litre, and the retention of the fertiliser subsidy.

Others are the funding to complete stalled road projects, payment of coffee debt and the proposed Coffee Cherry Fund, public-owned sugar firms to pay debts to farmers, new varsity funding and arrears owed to counties, the National Government Constituency Development Fund (NGCDF) and pension.

Overlapping mandates

The measures will also include the dissolution of 47 State corporations with overlapping mandates, the end of harambee for all State officers, and the removal of confidential budgets in all offices, including his own.

These were among the raft of measures announced by Dr Ruto at State House, Nairobi following protests against increased tax measures, which saw the rare climb-down to drop the Finance Bill, 2024, which was rejected by mostly youth protesters as punitive.

On harambee, President Ruto said Attorney General Justin Muturi had been tasked to prepare a law to effect a ban on all State officers participating in such.

The law, he said, will also include laws on philanthropic activities.

At the same time, the President announced the end of funding to the offices of the First Lady, as well as that of the spouses of the Deputy President and the Prime Cabinet Secretary.

The President also suspended the filling of the offices of the Chief Administrative Secretary, for which he had proposed 50 people but their appointment was blocked by the courts.

Parliament has since passed a new law allowing their appointments, which will now cease following the Head of State’s pronouncement.

President Ruto also suspended the purchase of motor vehicles for all government agencies and departments for one year, except for the security teams.

Government buildings

The Head of State suspended all non-essential travel for all officers, and reduced the budget for government buildings renovations by 50 per cent.

He also announced the reduction of advisors in government, recently budgeted to gobble Sh1.1 billion in their budgets for those only advising the President.

President Ruto also announced that all public servants will retire at the age of 60, “with no exceptions whatsoever.”

On public debt, President Ruto announced the formation of an independent taskforce to conduct a forensic audit of the debt.

The team is to report in three months and is to clarify on the extent and nature of Kenya’s debt, as well as recommend proposals to manage the skyrocketing debt.

Here is a summary of new proposed austerity measures:

-47 State corporations with overlapping functions to be dissolved. Staff in affected agencies to be transferred o ministries and agencies

-CAS office suspended

-Advisors reduced by 50 per cent with immediate effect

-Budget for First Lady, Second Lady, PCS removed

-Confidential budget in State House, all offices removed

-Renovations reduced by 50 per cent

-No extension past 60-year retirement for all civil servants

-Purchase of vehicles suspended for 12 months, except for security agencies

-All non-essential travel suspended

-No state officer, public servants will participate in harambees

-Attorney General to submit law to this effect on harambee, philanthropic and charitable ventures

-Changes in government to be announced soon