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NAIROBI, Kenya | Xinhua | Kenyan President William Ruto on Friday announced a raft of austerity measures aimed at addressing revenue shortfalls in the 2024/2025 fiscal budget caused by the withdrawal of the contentious Finance Bill 2024.
Ruto said the National Treasury will cut government spending by 177 billion shillings (about 1.38 billion U.S. dollars) to make room for key commitments, including hiring extra school teachers. He said the withdrawal of the Finance Bill 2024 had left a 2.7-billion-dollar deficit in the national budget and called on measures to help manage the shortfall.
“I make this statement to highlight the actions taken in response to overwhelming public feedback in recent days, to fulfill my commitment to continuously and effectively listen to the people of Kenya, and to underscore my intention to always take public contributions in good faith, applying them to enrich policymaking and governance,” he told in a televised news conference in Nairobi, the capital of Kenya.
The Treasury team has been assessing the adverse effect of either reducing the budget by the entire 2.7 billion dollars or borrowing the full amount, the president said, adding that the additional borrowing will increase the fiscal deficit to 4.6 percent of gross domestic product from 3.3 percent.
Among the government initiatives that will receive continued funding include the hiring of medical interns, support for dairy farmers, road infrastructure projects, fertilizer subsidies, and settlements of debts owed to farmers in various sectors.
The Finance Bill 2024, which sparked youth protests that led do its withdrawal by the president, sought to raise an additional 2.7 billion dollars through new taxes. The protests led by mostly young Gen-Z protesters had been demanding accountability in government, saying that there is a lot of opulence and wastage in government spending.
In response, Ruto said he will implement the protesters’ demands by announcing a raft of measures aimed at optimizing government expenditure and enhancing transparency, including reducing the number of advisers in government by 50 percent with immediate effect, and suspending all non-essential travel by public office bearers.
Ruto said 47 State agencies 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. Staff currently employed by the affected corporations will be transferred to ministries and other state agencies.
The president also suspended the decision to fill the positions of Chief Administrative Secretaries, adding that 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.
Ruto also said the budgetary provisions for confidential budgets in various executive offices, including the presidency, shall be removed. Additionally, public servants reaching the retirement age of 60 years shall be required to immediately proceed on retirement, with no extensions to their tenure of service.
He slashed the budget for government renovations by 50 percent and halted the purchase of new motor vehicles for the government for 12 months, except for security agencies, adding that a new policy on transport for public officers will be developed within this period.
“These measures will be followed by changes in government that I shall be announcing. We are determined to carry out these and other changes to improve the quality, efficiency, and transparency in serving the people of Kenya and ensure that citizens receive maximum value for their resources from a public sector that prioritizes their welfare,” Ruto said.
The president had appointed an independent taskforce to carry out a comprehensive forensic audit of the country’s public debt and report within three months.
“This audit will provide the people of Kenya with clarity on the extent and nature of the debt and how public resources were expended, and will recommend proposals for managing our public debt in a manner that is sustainable and with intergenerational equity,” he said. ■
