News and Analysis
November 22, 2024
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The National Treasury on Wednesday, June 19, wrote to Parliament warning that it would be forced to make major budget cuts if the Finance Bill 2024 is not passed.
In a letter to the Clerk of the National Assembly, Treasury CS Njuguna Ndung’u warned that the cuts would be necessary if the projected revenue shortfall of Ksh200 billion for the fiscal year 2024/25 is not achieved through the proposals contained in the Finance Bill.
Among the key areas that will suffer budget cuts include Parliament, county governments, the Higher Education Loans Board (HELB), healthcare, vocational training centers, cash transfers for senior citizens, school feeding programs, and road projects.
Read More: Highlights of the 2024/25 Budget Proposal Read by Treasury CS Njuguna Ndung’u
Parliament will be among the biggest casualties as the letter by the CS shows MPs will lose Ksh3.1 billion - Ksh2.7 billion from recurrent expenditure such as salaries and allowance - and Ksh450 million cut from the Constituency Development Fund (CDF). County governments will lose Ksh5 billion from the equitable share allocation.
“The National Assembly should ensure that the total revenues raised are consistent with the approved fiscal framework and the Division of Revenue Act, and prescribes restrictions on the level of borrowing by the National Government,” the letter read in part.
Ongoing road projects will face a reduction of KSh15.1 billion. Technical and Vocational Education and Training institutions (TVETs) and Technical Training Institutes (TTIs) will lose Ksh800 million.
School infrastructure will be cut by Ksh1.6 billion, and the School Feeding Programme will see a reduction of Kshh1.8 billion.
The budget cuts will significantly impact Junior Secondary Schools (JSS), with a reduction of Ksh18.9 billion for teacher confirmation and hiring.
Cash transfers for senior citizens will be cut by Ksh5.5 billion, and the Constituency Development Fund (NG-CDF) will lose Ksh15 billion.
Read More: Fuel Taxes increased in Amended Finance Bill
The list includes 45 offices within the Executive, Judiciary, and Parliament that will face budget cuts if the parliament does not pass the bill.
The Presidency will lose Sh451 million, while State House will face a Ksh500 million cut, both for operational expenses.
The Ministry of Interior will have Ksh2 billion slashed from its security operations budget, while the Ministry of Defence will lose Ksh7.7 billion earmarked for security operations and modernization.
Here are some of the Kenya National Treasury’s proposed areas for budget cuts:
Fertilizer subsidy -Ksh5 billion
Pending bills -Ksh5 billion
Medical interns -Ksh3.7 billion
Civil Servants Insurance Scheme -Ksh1 billion
Sugar reforms -Ksh1.7 billion
Coffee Cherry Fund -Ksh1 billion
Land resettlement -Ksh1 billion
Kenya Airways -Ksh1 billion
ICT Authority -Ksh6.7 billion
IEBC -Ksh185 million
National Police Service Commission -Ksh50 million
IPOA -Ksh55 million
EACC -Ksh200 million
Read More: Finance Bill 2024: Govt Makes U-Turn, Drops Unpopular Clauses
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