President Ruto announces Sh177bn budget cuts

President William Ruto has announced Sh177 billion in spending cuts and Sh169 billion in additional borrowing to plug the budget gap left after the withdrawal of the 2024 Finance Bill.

President Ruto said in a live address from State House that the government would present a proposal to the National Assembly for approval of spending cuts after withdrawing the bill aimed at raising Sh346 billion in new taxes.

The president said this would ensure funding for key budget lines, including the recruitment of 46,000 secondary school teachers on a permanent and retiring basis, the recruitment of medical interns, provision of money to buy milk from farmers at Sh50 per litre, and retention of fertiliser subsidies.

Other projects include funding for the completion of stalled road projects, payment of coffee debts and the proposed Cherry Coffee Fund, public sector sugar companies to repay debts to farmers, new university funding and arrears to counties, the National Constituency Development Fund (NGCDF) and pensions.

The measures will also include dissolving 47 state-owned companies with overlapping powers, ending fundraising for all state employees, and removing secret budgets in all offices, including his own.

These were among a raft of measures announced by Dr Ruto at State House in Nairobi following youth-led protests against increased tax measures, which saw a rare retreat from the 2024 Finance Bill, which most Kenyans have rejected as punitive.

On charity events, President Ruto said Attorney General Justin Muturi has been tasked with drafting a law to impose a ban on all state employees participating in such events. He added that the law will also include regulations on charitable activities.

Meanwhile, the president announced the end of funding for the offices of the first lady, the vice president’s spouses and the cabinet secretary.

The president also suspended the appointment of chief administrative secretary positions, for which he had proposed 50 people, but whose appointment was blocked by the courts.

Parliament has since passed a new law allowing their appointment, which will now be suspended after the president’s announcement.

President Ruto also decided to suspend the purchase of vehicles for all government bodies and departments for one year, except for security teams.

The President of the State has suspended all non-essential travel for all state employees, and reduced the budget allocated for the renovation of government buildings by 50 percent.

He also announced a reduction in the number of advisers in government, which was recently allocated to consume Sh1.1 billion in its budgets for those who advise the president only.

President Ruto also announced that all public servants will retire at the age of 60, “with no exceptions whatsoever.”

On the public debt, President Ruto announced the formation of an independent task force to conduct a forensic audit of the debt.

The team is due to submit its report within three months to clarify the extent and nature of Kenya’s debt, as well as recommend proposals to manage the high debt.

Following the speech, Ruto hosted a live audio forum on X to engage with young people. He faced tough questions about political brutality, corruption and economic policy.

One of the activists involved in the protests, Osama Otero, questioned Ruto about the abduction of the protesters by state security agents, saying he was abducted at 3am by men in plain clothes, blindfolded, and taken to a house for interrogation.

“Mr. President, are we in a terrorist country?” Otero asked.

Ruto, who had previously denied police involvement in dozens of reported disappearances, apologised for Otero’s treatment and promised to take action on his case.

Protests have continued since Ruto scrapped the finance bill, with many demonstrators calling for the president to resign. But turnout has fallen, and some activists have called for a rethink of their strategy after Tuesday’s demonstrations were marred by violence and looting.

Activists blamed the violence on thugs hired by politicians to discredit the protest movement. The government said opportunistic criminals were responsible.

• Dissolving 47 government institutions with overlapping tasks, and transferring employees in the relevant bodies to ministries and agencies.
• The office of the Chief Administrative Secretary (CAS) has been suspended.
• Reducing the number of presidential advisors by 50 percent, effective immediately.
• The budget for the First Lady, the Vice President’s wives, and the Cabinet Secretary has been removed.
• The secret budget in the presidential palace, and the removal of all offices.
• Renewal costs have been reduced by 50 percent.
• No extension of retirement after 60 years for all government employees.
• Stop purchasing vehicles for 12 months, except for security services
• All non-essential travel has been suspended.
• No government employee or public servant shall engage in any of these charitable activities. The Attorney General will introduce a law in this regard regarding charitable and humanitarian activities.
• Government changes will be announced soon.

– Additional reporting from Reuters.