Kenya’s president William Ruto has announced a series of drastic measures ranging from cutting county allocations to
severely curtailing government spending, following his decision not to sign the 2024 Finance Bill.
An unprecedented budget crisis is rocking Kenya as President William Samoei Ruto takes drastic measures to deal with the rejection of the 2024 Finance Bill. In an official statement issued on Friday, the head of state announced a series of decisions to maintain the country’s financial stability, despite the considerable challenges on the horizon.
In particular, Ruto said that he had referred the County Allocation and Revenue Bill back to Parliament. The aim of this decision is to adjust allocations in line with the expected fall in revenue following the rejection of the Finance Bill. Local governments will therefore have to cope with a significant reduction in their budgets.
In the wake of this, the Kenyan leader has ordered the National Treasury to submit amendments to the Revenue Allocation Bill 2024 to Parliament immediately. These amendments will reflect the anticipated fall in revenues and will have an impact on the distribution of funds between central government and the counties.
One particularly stringent measure that has been announced is that the president will direct the National Treasury to limit spending to critical and essential services only. This spending will not exceed 15 percent of the initial budget, until a supplementary budget is approved. This decision could lead to major disruptions in the operation of many public services.
These announcements follow the President’s refusal to sign the 2024 Finance Bill on Wednesday 26 June. To ensure the continuity of government operations, as required by the constitution, Mr. Ruto ratified the Appropriation Bill 2024.
However, he ordered a drastic reduction in expenditure, amounting to 346 billion Kenyan shillings (Kshs), to be shared between the national and county governments.
In the coming weeks, the government and parliament will have to find common ground to adopt a new finance bill and avoid a prolonged paralysis of public services.
ARD/te/fss/as/APA