State bans buying of branded promo items in new budget cuts
The government has banned the procurement of promotional items such as t-shirts, power banks, and calendars using taxpayers’ money in the latest purge on non-essential spending.
Head of Public Service Felix Koskei has written a memo to all principal secretaries and chief executive officers (CEOs) of State corporations instructing them to cut spending on all non-priority expenditure items.
He has directed them to cut the purchase of promotional items such as calendars, diaries, umbrellas, power banks, keyholders, bags, flasks, cups, shukas, notebooks, and other materials.
“Suspend and immediately cease the procurement, printing, and production of corporate wear; including but not limited to t-shirts, shirts, tracksuits, and any other branded clothing items,” said Mr Koskei.
Mr Koskei said that the directive is part of the government’s macroeconomic framework that seeks to cut spending by government entities to protect public coffers.
“The policy on fiscal consolidation is anchored upon enhanced revenue mobilisation as well as austerity measures underpinned by the rationalisation of non-priority expenditure and implemented in a manner that nevertheless protects essential development spending,” he added.
Bloated budget
A bloated budget has been a headache for President William Ruto since he assumed office in September 2022. He immediately announced a Sh300 billion cut on that year’s budget to create some fiscal space for the exchequer.
In October last year, the President also tightened the noose on lavish spending on non-essential travel by government officials.
In the new guidelines, foreign travel is only funded by the government where the State’s participation is part of the fulfilment of its obligations and to carry out critical engagements.
Mr Koskei’s directive comes at a time when the government is in a tough fix as revenue collection is lagging behind target, which means that cutting spending could give the exchequer some respite.
The Kenya Revenue Authority (KRA) has, for instance, collected Sh1.374 trillion in tax revenues up to February, which is equivalent to 55 percent of the Sh2.495 trillion target for the full financial year ending June.
This means that to hit the tax collection target for the year, KRA will have to collect Sh1.121 trillion between March and June, which is an average of Sh280.25 billion monthly.
As part of its fiscal consolidation plan, the Treasury has set its eyes on enhanced efficiency of public investments, better targeting of subsidies and transfers, addressing weakness in State corporations, and digital delivery of public services.
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