President William Ruto’s administration has slashed the total spending for the current financial year ending June by Sh14 billion in its first mini-budget, including dropping many of his predecessor’s infrastructure projects.
In the first Supplementary Budget for Financial Year 2022/23, the National Treasury has cut development spending by Sh106.3 billion, with a substantial chop being on the State Department of Infrastructure and Water and Sanitation.
Consequently, the national government, including ministries, departments and agencies, will spend a total of Sh2.1 billion in the 12-month to June compared to the initial estimate of Sh2.12 trillion.
Recurrent spending, which includes day-to-day expenditures such as wages and salaries, pension, training, and foreign and domestic travel, has gone up by Sh92 billion, despite a promise by the Kenya Kwanza administration to cut non-essential payments.
Recurrent expenditure went up to Sh1.5 trillion in the latest changes, including the Hustler Fund budget, the State lending programme targetting individuals and businesses at the bottom of the pyramid launched more than two months ago.
The Treasury had earlier informed the International Monetary Fund (IMF) that it was left with little room to cut State spending after it inherited undisbursed expenditures of Sh89 billion from the last financial year and Sh61 billion spending that occurred outside the budget the last days of Uhuru Kenyatta’s presidency.
The new administration reckons that it also incurred extra spending on the launch of the Hustler Fund and support for fuel and fertiliser subsidies.
The commitments inherited from the Uhuru administration and extra spending on implementing President Ruto’s campaign promises have left the Treasury with an additional expenditure of Sh290 billion.
This has made it difficult for the Treasury to implement the President’s instructions to cut Sh300 billion from annual government spending in the supplementary budget, which was set to be tabled in Parliament last month.
Dr Ruto, who was sworn in on September 13, said the budget cuts were aimed at bringing the country "back to sanity" and the recurrent expenditure down further next year by an undisclosed amount, in a bid to achieve a recurrent budget surplus by the third year.