The government has moved to safeguard the absorption of Junior Secondary School (JSS) teachers and medical interns on permanent terms despite their hiring having faced uncertainty following the collapse of the Finance Bill 2024.
Their absorption will be financed through budget cuts from other government agencies’ vote heads in the supplementary budget I for the current financial year- 2024/25.
The mini-budget will however, see elected MPs from the 290 single-member constituencies forgo the Sh15 billion meant for the enhancement of the National Government-Constituency Development Fund (NG-CDF) kitty to finance electricity connectivity in their areas.
This follows a meeting between the National Treasury mandarins led by Cabinet Secretary Prof Njuguna Ndung’u and the Budget and Appropriations Committee of the National Assembly.
Details before Parliament show that the Sh18.9 billion allocated to the Teachers Service Commission for hiring JSS teachers will not be altered despite the revenue hitch.
The same is with the Sh3.7 billion allocated to the State Department for Medical Services for the absorption of medical interns and the Sh1.8 billion allocated to the State Department for Basic Education for school feeding programme with the Sh1.6 billion meant for infrastructure for public schools to go.
The multibillion-shilling counterpart-funded projects will also not be affected by the expenditure cuts.
“The government will go on with the hiring of the JSS teachers and medical interns in the current financial year as initially planned. This will be financed by budget cuts from other votes in the supplementary budget,” a member of the budget committee, who did not want to go on record, told Nation.
The supplementary budget I for the 2024/25 financial year is expected in the National Assembly once the MPs resume their sittings on July 23, 2024.
The legislators went on recess on June 27, 2024, two days after passing the Finance Bill that saw protesting Kenyans storm the main parliament buildings to express their outrage as their representatives scampered for their lives.
The collapse of the Finance Bill 2024 came after President William Ruto rejected it in its entirety in a memorandum to the National Assembly following deadly countrywide protests that saw Kenyans accuse the government of imposing punitive taxes they said had the dangers of escalating the cost of living.
The rejection created a financing gap as the Bill was to help the government collect Sh346 billion on top of the Sh2.95 trillion in ordinary revenue and Appropriation in Aid (A in A) to finance the 3.9 trillion budget for the current financial year.
The Bill’s fall heralded difficult times for the government as it grapples with the practicability of financing expenditures that far outweigh the anticipated revenue.
Nonetheless, the government’s escape route is going back to the base- which is the Sh3.7 trillion figure- the operative budget for the 2023/24 financial year that had Sh3 trillion in ordinary revenues and borrowings of Sh718 billion.
This is notwithstanding that in the 2023/24 fiscal period, the government missed the projected revenue target north of Sh300 billion.
With the government going back to the base, it was feared that the hiring of JSS teachers and medical interns would not be prioritised.
The government was left with three options- to borrow more than projected in the budget and the Medium Term Debt Management Strategy, increase taxes outside the projections in the National Tax Policy and the budget or slash the budget.
On Friday, President Ruto announced that the government will cut the year’s budget by Sh177 billion with the balance that was to be realised by the Finance Bill covered through increased borrowing from the local and foreign market.
The government is also hitting on all the cylinders to shore up revenue, notably with increased taxation following the introduction of duty on imported crude palm oil.
The government is also working on increasing the Road Maintenance Levy (RML) by Sh9 a litre of petrol from the current Sh18 in what will hit Kenyans hard.
Already National Treasury CS Prof Ndung’u has issued guidelines to all government Ministries, Departments and Agencies of the impending revision of the budget.
“Accounting officers are required to submit the revised estimates to the National Treasury by July 8, 2024,” says Prof Ndung’u in a circular of July 5, 2024.
Section 39 (4) of the PFM Act requires that any increase in expenditure in a proposed appropriation is balanced by a reduction in expenditure in another proposed appropriation.
Sections 40 (5) (a) and 50 of the Act further require that while approving the Finance Bill, the National Assembly should ensure that the total revenues raised are consistent with the approved fiscal framework and the Division of Revenue Act and prescribes restrictions on the level of borrowing by the government.
