New Treasury CS John Mbadi Targets Ksh400 Billion Revenue Increase, Promises Payroll Overhaul

National Treasury and Economic Planning CS John Mbadi meeting with National Treasury PS Dr Chris Kiptoo (R) and Economic Planning PS James Muhati (L) at Treasury Building Nairobi.

Newly appointed Treasury Cabinet Secretary John Mbadi made a bold promise on Monday to integrate the payroll system with the Integrated Financial Management Information System (IFMIS) as he officially took over his role. During the handover ceremony in Nairobi, Mbadi stressed that this integration is crucial and long overdue.

“If we cannot integrate our payroll systems from state departments into IFMIS, our primary accounting system, and link it with the Kenya Revenue Authority (KRA), then we don’t know what we are doing,” he told the press.

He urged those obstructing this reform to step aside, emphasizing, “Please allow Kenya to move forward. Don’t be an obstacle. Payroll reforms must be accomplished.”

Mbadi highlighted that the new reforms are vital for increasing government revenue, particularly after the setbacks of both the Finance Bill 2024 and Finance Bill 2023.

“Given the scarcity of resources, we have no option but to use public funds wisely and efficiently. We need to enhance the efficiency of public procurement systems and eliminate opportunities for abuse. We must ensure that the entire procurement process functions effectively,” he said.

Addressing those who might have benefited from the previous disorganized system, he remarked, “If you have gained from the chaos, you have benefited enough. Now allow Kenyans to get value for money.”

Mbadi also voiced his strong commitment to boosting state revenues and fully supporting the strategies laid out by the Kenya Revenue Authority (KRA). He aims to raise revenues by approximately Ksh400 billion.

“If we can increase our revenue collection to GDP by just 3 percent, I’m confident that we would generate nearly Ksh400 billion in additional funds. This would resolve many of our issues, close the budget deficit, and propel the country forward,” he explained.

Outgoing Treasury CS Njuguna Ndung’u advised Mbadi on the challenges ahead, particularly after the failure of the two Finance Acts. He pointed out that the Ministry faces high tax expenditures, currently at 2.94 percent. “We aimed to address these tax expenditures this fiscal year. Reducing them by just 2 percent could significantly boost revenues,” Ndung’u noted.

He also brought attention to the severe liquidity issues caused by short-term debt, including bills and bonds. “This is why we sometimes took up to three weeks to clear the payroll due to liquidity problems, though this is not a solvency issue,” he clarified.

Ndung’u urged Mbadi to devise a strategy to tackle solvency issues within the Ministry. “I encourage my friend CS John Mbadi to address these liquidity constraints with strategic options to prevent them from becoming solvency challenges. A strong signaling approach is necessary,” he added.

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