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 harambees (fundraising) 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 youth-led protests against increased tax measures, which saw the rare climb-down to drop the Finance Bill, 2024, which was rejected by most Kenyans as punitive.
On harambees, President Ruto said Attorney General Justin Muturi had been tasked to prepare a law to effect the ban on all State officers participating in such. The law, he said, would also include regulations on philanthropic activities.
At the same time, the President announced the end of funding to the offices of the First Lady and those 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.
Debt forensic audit
The Head of State suspended all non-essential travel for all civil servants and reduced the budget for government buildings renovations by 50 percent.
He also announced the reduction of advisors in government, recently budgeted to gobble up Sh1.1 billion in their budgets for those only advising the President.
President Ruto also announced that all public servants would 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.
X space
Following the speech, Ruto hosted a live audio forum on X meant to engage with young people. He faced sharp questioning about policy brutality, corruption and economic policy.
One activist involved in the protests, Osama Otero, questioned Ruto about alleged abductions of protesters by state security agents, saying he had been taken at 3 am by men in plain clothes, blindfolded and taken to a house to be questioned.
"Mr President, are we in a terrorist country?" Otero asked.
Ruto, who had previously denied police involvement in dozens of reported disappearances, apologised for the treatment Otero had suffered and promised to take action on his case.
Protests have continued since Ruto scrapped the finance bill, with many demonstrators calling for the president to resign. But turnout has been down and some activists have called for a rethink of their strategy after Tuesday's demonstrations were marred by violence and looting.
Activists have blamed the violence on thugs hired by politicians to discredit the protest movement. The government has said that opportunistic criminals are responsible.
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 to ministries and agencies.
Presidential advisors reduced by 50 percent with immediate effect.
Budget for First Lady and spouses of Deputy President, and the Prime Cabinet Secretary removed.
Confidential budget in State House, all offices removed.
Renovations reduced by 50 percent.
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.
