Govt Cuts Ministries’ Budget By 10 Per Cent

President William Ruto on Tuesday, October 2 issued a directive to ministries to reduce their 2023/2024 budgets by 10 per cent.

The directive was made following a Cabinet meeting held at State House, Nairobi and aimed to align expenditures with available resources amidst the global economic stress.

President Ruto, who chaired the meeting, emphasized the need for the Government to exercise prudence in resource utilisation, firmly stating that wastage and corruption would not be tolerated.

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“On the State of the Economy, Cabinet considered the progress being made in the implementation of the FY2023/24 Budget. 

“Arising therefrom, and as part of the Administration's fiscal consolidation plan that seeks to contain fiscal deficit, the Cabinet sanctioned the reduction of the recurrent budget of each Ministry and State Department by ten per cent (10%). The proposed budgetary cuts will be effected as part of the Supplementary Appropriations No. I of the FY2023/24 Budget cycle,” statement from State House read in part.

The Head of State also issued a warning to government officials seeking to bypass the use of a unified payment system, underscoring the necessity for better oversight.

The budget cuts come at a time when the government has been under significant pressure to reduce the cost of living triggered by rising food and fuel prices, with the increased taxes frustrating taxpayers whose disposable incomes are shrinking with the high cost of living.

Furthermore, the Central Bank of Kenya (CBK)’s Monetary Policy Committee (MPC) meeting whose details were shared on Tuesday paints a grim picture regarding Kenyans affording basic food items despite Kenya’s overall inflation remaining unchanged at 6.8 per cent in September 2023, compared to 6.7 per cent in August, something the bank regulator mention is within the government’s range.

Food inflation rose to 7.9 per cent in September from 7.5 per cent in August, with CBK singling out items such as spinach, tomatoes and onions as well as Irish potatoes, kales (sukuma wiki) and cabbages whose prices increased in September 2023.

“Prices of key non-vegetable food items particularly maize and wheat flour declined following improved supply attributed to the ongoing harvests and government measures to zero-rate key food imports,” stated CBK in part.

Fuel inflation remained elevated at 13.1 per cent in September, reflecting the impact of the rise in international oil prices. 

Currently, fuel prices in Kenya read as follows, according to the Energy and Petroleum Regulatory Authority (EPRA); Super Petrol, Diesel and Kerosene retail at Ksh211.64, Ksh200.99 and Ksh202.61 respectively, an increase from the previous month’s prices of Ksh194.68, Ksh179.67, and Ksh169.48 respectively.

On Monday, the government issued new guidelines to cut down on unnecessary expenditure necessitated by need to scale down and prioritise spending, focusing on critical operations and activities that are essential to service delivery to the citizen. Among the guidelines saw non-essential travel affecting 13 state officers suspended.