By Tajeu Shadrack Nkapapa
President William Ruto in his address to the nation on Friday afternoon, presented an updated financial plan designed to tackle revenue shortfalls in the upcoming 2023/24 national budget, following the withdrawal of the controversial Finance Bill, 2024.
The Finance Bill 2024 was rejected by Kenyan Gen Z following two-week protests against the Bill.
Dr. Ruto during the press briefing pointed out that the withdrawal of the Finance Bill 2024 resulted in a Ksh.346 billion gap in the budget, underscoring the necessity for prompt measures to address the deficit.
“The consequence of withdrawing the Finance Bill is the reduction of our revenue targets by Ksh.346 billion. Over the last few days, our Treasury team has been assessing the adverse impact of either reducing the budget by Ksh.346 billion in full or borrowing the amount in full,” President Ruto said.
“Cutting the entire amount would significantly and drastically affect the delivery of critical government services, while borrowing would increase our fiscal deficit by a margin that would have significant repercussions on many other sectors, including interest rates and exchange rates,” he added.
“We have since struck a middle ground and will be proposing to the National Assembly a budget cut of Ksh 177 billion and borrow the difference,” stated the Head of State.
The budget cut has affected major state corporations and some of the offices disbanded as requested by the people of Kenya.
Accordingly, in keeping with the enhanced austerity measures the government have committed to implement and align government expenditures with the budgetary implications of the withdrawal of the Finance Bill, 2024.
“47 State Corporations with overlapping and duplicative functions will be dissolved, resulting in the elimination of their operational and maintenance costs, and their functions will be integrated into the respective line ministries,” the President added.
According to the President, the Budget lines providing for the operations of the offices of the First Lady, the spouses of the Deputy President, and the Prime Cabinet Secretary shall be removed and the budget for renovations across the government reduced by 50%.
The President further announced that the number of advisors in government shall be reduced by 50% within the public service, with immediate effect as also the decision to fill the positions of Chief Administrative Secretaries is suspended as major austerity measures to reduce government expenditure.