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Government reduces budget by Ksh132.4B

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Ruto signs into law Division of Revenue and the Supplementary Appropriation Bills at State House

The government has reduced this financial year’s overall budget by KSh132.46 billion from KSh3.981 trillion to KSh3.848 trillion.

This is a reduction of 3.3 per cent. The announcement was made when President William Ruto signed into law the Supplementary Appropriation Bill 2024 and the Division of Revenue Bill 2024 at State House, Nairobi, on Monday.

The new laws unlock the resources that will catalyse economic performance and enhance service delivery.

The Supplementary Appropriation Act 2024 now reduces KSh32.6 billion from various budget allocations. With the rationalisation of expenditures, the law authorises the spending of KSh102 billion from the Consolidated Fund for the year ending June 30, 2024.

The education budget has been enhanced, with university education receiving KSh4.468 billion and secondary education KSh1.112 billion.

Development spending has also been redirected to priority areas and reduced by KSh75.29 billion, while KSh51.12 billion has been allocated for emerging pressing needs.

The law also regularises KSh23.67 billion expenditure under Article 223 of the Constitution that allows financing of emergencies and later approval by Parliament.

These expenditures include emergency interventions such as KSh4.3 billion to the State Department for Arid and Semi-Arid Areas and Regional Development for humanitarian support to those who were affected by floods.

Additionally, KSh3 billion has been allocated to the Department of Internal Security for El Nino disaster management, and another KSh3 billion for the fertiliser subsidy programme.

Following floods that destroyed infrastructure, KSh1 billion has been allocated for emergency rehabilitation of roads.

Furthermore, KSh11.4 billion has been set aside for the Kenya Revenue Authority to enhance revenue collection efforts (KSh4 billion) and pay pending bills worth KSh7.4 billion.

In addition, KSh2 billion has been allocated to take care of the medical insurance for the National Police Service.

The approved additional expenditures are designed to address emergency interventions over destruction caused by the El Niño rains and other critical needs.

These include KSh5.3 billion for emergency relief assistance, KSh3.3 billion for security operations and KSh1.1 billion for mopping up excess milk by the New KCC.

President Ruto said the funds will help the government fulfill its commitment to dairy farmers by ensuring prompt monthly payments and increasing the price to KSh50 a litre.

Meanwhile, the Division of Revenue Act 2024 has increased county allocation by KSh14.69 billion from KSh385.4 billion this financial year to KSh400.1 billion in the year beginning July 1.

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

This increase is expected to boost the provision of services by ensuring that county governments are adequately funded to perform their functions outlined in the Fourth Schedule of the Constitution.

The law also allocates KSh2.5 trillion to the National Government. It also implements Article 204 of the Constitution on the Equalisation Fund, providing  KSh7.8 billion which is equivalent to 0.5 per cent of the last audited revenue accounts.

 


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