President William Ruto has directed the National Treasury to prepare a mini-budget for the fiscal year starting July after he rejected the Finance Bill 2024, which was expected to raise an additional Sh346 billion.
On Friday, President Ruto signed into law Appropriations Bill 2024, which allows the national government and counties to spend even as he referred the County Allocation and Revenue Bill back to Parliament for reductions in allocations.
Dr Ruto said he signed the Appropriations Bill to “guarantee continuity of government operations, especially in providing critical services.”
“I have therefore assented to the Appropriations Bill 2024 and instructed the National Treasury to immediately prepare supplementary estimates to reduce expenditure by the amount of revenue that was expected to be generated by the rejected Finance Bill,” he said in a statement.
“The reduction in expenditure, amounting to Sh346 billion, will be borne equitably by both levels of government: the national and county governments. With respect to the national government, the reduction will be borne by the executive, the legislature, the judiciary, and our constitutional commissions,” added the head of State.
In his speech, while rejecting the Finance Bill on Wednesday, President Ruto had called for expenditure cuts to cover the expected shortfalls in revenues, including allocations to the Executive.
“I direct immediate further austerity measures to reduce expenditure starting with the Executive Office of the President and extending to the entire executive arm of government. I direct that operational expenditure in the Presidency be reduced to remove allocations for the confidential vote, reduce travel budget, hospitality and purchase of motor vehicles, renovations and other expenditures,” he said.
He also directed the National Treasury to immediately submit to Parliament amendments to the Division of Revenue Act 2024 to reflect the reduced revenues occasioned by the rejected Finance Bill.
President Ruto was forced to reject the Finance Bill following nationwide demonstrations that saw protesters breach Parliament Buildings even as clashes with police left 23 dead and scores injured.
Treasury circular
Meanwhile, the National Treasury Cabinet Secretary Njuguna Ndung'u sent a circular to all accounting officers on Friday directing them to limit spending by 15 percent of the Appropriated Budget until a mini-budget is developed and passed into law.
“Accounting officers are therefore directed to limit the spending of the FY 2024/25 Budget …to only critical and essential services,” said Prof Njuguna.
“Accounting officers are further directed not to exceed the spending by 15 percent of the Appropriated Budget until the FY 2024/25 Supplementary Estimates No.1 is appropriated,” he added.
