Government Cuts Budget by Kes.132.4 Billion

The government has reduced this financial year’s overall budget by Kes.132.46 billion, bringing it down from Kes.3.981 trillion to Kes.3.848 trillion, representing a 3.3 percent reduction.

President William Ruto announced the changes when he signed the Supplementary Appropriation Bill 2024 and the Division of Revenue Bill 2024 into law at State House, Nairobi, on Monday.

State House said the new laws are expected to unlock resources to boost economic performance and improve service delivery.

The Supplementary Appropriation Act 2024 cuts Kes.32.6 billion from various budget allocations.

By rationalising expenditures, the law authorises spending of Kes.102 billion from the Consolidated Fund for the year ending June 30, 2024.

The education budget sees an enhancement, with university education receiving Kes.4.468 billion and secondary education Kes.1.112 billion.

Development spending is redirected to priority areas and reduced by Kes.75.29 billion, while Kes.51.12 billion is allocated for emerging pressing needs.

The law regularises Kes.23.67 billion in expenditures under Article 223 of the Constitution, which allows for emergency financing pending Parliament’s approval.

These expenditures include Kes.4.3 billion to the State Department for Arid and Semi-Arid Areas and Regional Development for humanitarian support to flood victims.

Additionally, Kes.3 billion goes to the Department of Internal Security for El Nino disaster management, and another Kes.3 billion for the fertiliser subsidy programme.

Following flood-related infrastructure damage, Kes.1 billion is allocated for emergency road rehabilitation.

Furthermore, Kes.11.4 billion is set aside for the Kenya Revenue Authority to enhance revenue collection efforts (Kes.4 billion) and pay pending bills worth Kes.7.4 billion.

An allocation of Kes.2 billion will cover medical insurance for the National Police Service.

The approved additional expenditures aim to address emergency interventions due to the El Niño rains and other critical needs.

These include Kes.5.3 billion for emergency relief assistance, Kes.3.3 billion for security operations, and Kes.1.1 billion for mopping up excess milk by the New KCC.

President Ruto stated that these funds will help the government fulfill its commitment to dairy farmers by ensuring prompt monthly payments and raising the price to Kes.50 per litre.

The Division of Revenue Act 2024 increases county allocations by Kes.14.69 billion, from Kes.385.4 billion this financial year to Kes.400.1 billion for the year starting July 1.

President Ruto said, “We have not only met the constitutional requirement of 15 percent but also increased it to 25 percent.”

This increase is expected to enhance service provision by ensuring adequate funding for county governments to perform their constitutional functions.

The law also allocates Kes.2.5 trillion to the National Government.

It further implements Article 204 of the Constitution on the Equalisation Fund, providing Kes.7.8 billion, which is equivalent to 0.5 percent of the last audited revenue accounts.

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