The National Treasury has addressed concerns on how the government will close on a financial gap created following President William Ruto’s decision to decline signing the Finance Bill 2024.
Treasury Cabinet Secretary Njuguna Ndung’u in a circular dated June 28, 2024, outlined measures on how the financing gap of Ksh346 billion will be closed.
The Circular sent to all accounting officers and principal secretaries highlighted major budget cuts in response to the declined Finance Bill.
According to the circular, the National Treasury working with all Ministries, Departments and State Agencies (MDAs) will cut down the FY 2024/25 Budget across all activities to close the financing gap.
Following the decision, accounting officers will be required to limit spending of the Budget.
“In view of this, the National Treasury working with all MDAs will cut down the FY 2024/25 Budget across all activities to close the financing gap of KSh.346 billion in order to align the Budget to the Revised Fiscal Framework. Accounting Officers are therefore directed to limit spending of the FY 2024/25 Budget to only critical and essential services,” said CS Ndung’u.
Treasury Issues Directives
Accounting Officers were further directed not to exceed the spending by 15 percent of the Appropriated Budget until the FY 2024/25 Supplementary Estimates No. I is appropriated.
Also Read: Ruto Declines to Sign Another Bill After Finance Bill Rejection
At the same time, CS Ndung’u said that the accounting officers are required to ensure strict adherence to the guidance.
“Accounting Officers are also required to ensure that they bring the contents of this Warrant to the attention of all Public Officers working under them, including the Heads of Semi-Autonomous Government Agencies (SAGAs),” added CS Ndung’u.
CS Ndung’u noted that the Financial Year 2024/25 Budget was to be funded through additional revenue measures amounting to the Ksh346 billion sum contained in the rejected Bill.
The Treasury further noted that besides Ruto’s rejection of the Bill creating a financing gap of a similar amount, it implies that funding of expenditures to the tune of the KSh346 billion is now not tenable.
This statement by CS Ndung’u came following a consideration and approval of the expenditures contained in the National Assembly Appropriations Bill 2024 by the National Assembly.
“The National Assembly has considered and approved the expenditures contained in the National Assembly Appropriations Bill No. 34 of 2024, which H.E the President has assented to,” the Treasury noted,
Ruto Assents to the Appropriations Bill
President Ruto earlier on Friday assented to the Bill into Law at State House Nairobi.
In a statement, the Head of State highlighted that only critical spending will be financed.
Following the decision, President Ruto directed National Treasury to immediately begin processing Supplementary Appropriations I 2024/25.
On the other hand, the County Allocation & Revenue Bill was referred to the National Assembly by the President who declined to assent it.
This comes after the Head of State conceded to widespread protests witnessed in the country that were against the Finance Bill 2024.
Ruto in an address on June 26 said that his government had decided to withdraw the Finance Bill following deadly protests a day earlier that saw the invasion of Parliament Buildings by protesters leading to deaths.
The youth-led protests were against the controversial Bill and its proposals which the government aimed at increasing revenue collections.
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