President William Ruto has asked Parastatal Chief Executive Officers (CEOs) to reduce their recurrent budgets by 30 percent.
The head of state said on Tuesday, March 26, the move was part of government’s plan to ensure that all budgets and expenditures are subjected to rigorous audit.
Additionally, Ruto, in a meeting at State House Nairobi, said that his administration was determined to eliminate abuse of public resources and increase service delivery by using technology to maximize value for money.
“Our budgets and expenditures must be subjected to rigorous audit to eliminate abuse of public resources. We will leverage on technology to maximize on the value for money and boost service delivery.
“At State House Kenya, met Parastatal Chairpersons and Chief Executive Officers; asked them to cut their approved budgets by 30 per cent,” said Ruto.
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Other Directives Ruto Made to CEOs
At the same time, he ordered commercial State corporations to remit 80 percent of their profits after tax to the National Treasury, directing parastatals and the state corporations to live within their means.
Subsequently, he ordered that expenditure must never exceed revenues collected. Also, regulatory institutions were ordered to remit 90 percent of their surplus funds to the Treasury.
The president lamented that some agencies had been making losses for years and had become a burden to the exchequer.
“Now that the economy has stabilized, we cannot continue accumulating debt. Borrowing will only lead us down the cliff. The money some parastatals make does not belong to their boards or management. It belongs to the people of Kenya as returns on investment.
“We must get it right. We must do what is right. This is the time,” he added.
Also Read: KICC, Kenya Pipeline Among 11 State Companies Listed for Privatization
Timeliness for Implementation and Streamlining
According to the head of state, in three years, the government will be able to run a balanced budget if the directives are implemented.
Consequently, he said that some parastatals which were making losses had to be shut down adding that others had duplicated and overlapping roles.
“In three years, we must run a balanced budget. It won’t be easy, but we must do it. It is illogical. We have to shut down some of these loss-making parastatals. We must end excess capacity,” added the president.
In November 2023, the government through the National Treasury listed eleven state owned parastatals that were scheduled for privatization including KICC.
Other companies listed include Kenya Pipeline, Kenya Literature Bureau, Kenyatta Interantional Convention Center (KICC), National Oil Corporation of Kenya and Kenya Seed Company.
Further, Mwea Rice Mills, Western Kenya Rice Mills, New Kenya Corporative Creameries, Kenya Vehicle Manufacturing, Rivatex East Africa Limited and Numerical Machining Complex were earmarked for privatization.
