The Times of Tanzania
Eastern Africa News Network, Breaking News Tanzania

Kenya’s First Lady Rachel Ruto among losers as her husband drops 177 billion/- from national budget

Kenya’s first lady, Rachel Ruto and Japanese car makers are among the losers in the Generation Z protests of Kenya, as her husband, President William Ruto spells new reforms in state expemnditures.

That include the suspension of procuring of new motor vehicles for government officials and institutions for over 12 months effective from July 2024.

Under new financial reforms in the country a new policy on transport for public officers will now be developed, including suspension of all non-essential travel by state and public officers.

On the other hand, budgets providing for the operations of the office of the first lady and the spouse of the Kenyan deputy President will also be scrapped off.

New Task Force

“I have today appointed an independent task force to carry out a comprehensive forensic audit of our public debt,” stated President Ruto during his live address to the nation, adding that the team should submit its report in the next three months.

“This audit will provide the people of Kenya with clarity on the extent and nature of how public resources have been expanded, then recommend proposals for managing our public debt in a manner that is sustainable.

Also in addition to drawing, the highly contested finance bill, Kenya was contemplating to reduce the country’s revenue targets by 346 billion/- in response to the overwhelming public feedback.

“Over the last few days we have been assessing the adverse impact of either reducing the budget by 346 billion in full or borrowing the equivalent of 346 billion,” said Ruto.

However, “Cutting the entire amount in our assessment would significantly and drastically affect the delivery of critical government services while borrowing the whole amount in full will occasion a fiscal deficit by a margin.”

That, according to Ruto, would have significant repercussions on many sectors including, Kenya’s exchange rates and interest rates.

“After extensive consultations we struck an agreement that we would be proposing to the National Assembly a budget cut, but not the entire 346 billion/- but rather 177 billion/- and borrowing the difference.”

He then adds:

“Whatever we are going to borrow the difference will increase our fiscal deficit from what I intended to be 3.3 percent of our Gross Domestic Product, going up to 4.6 percent of the GDP.”

President Ruto then dropped the bombshell

“In keeping with enhanced austerity measures, we have committed to implement and align government expenditures within the budgetary, implications of the withdrawal of the finance bill 2024, the following action shall be taken with immediate effect towards the realization of the new budget…”

State corporations with overlapping and duplicating functions will be dissolved resulting in the elimination of their operational and maintenance causes.

Functions of dissolved parastatals will be integrated into the respective line Ministries just as their staff gets transferred to other organs alongside the move.

The number of advisors in government shall be reduced by 50 percent within the public service.

while the budget for renovations across government is to be reduced by 15 percent.

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