As the country reels from the aftermath of dropping the finance bill 2024 and a massive debt bill, MPs are proposing to increase the borrowing target by sh164 billion, from sh597 billion to sh761 billion for the current financial year 2024/25.
During an address to the nation a fortnight ago, President Ruto promised to come up with austerity measures in government operations, to meet debt obligations and the public service wage bill. As such, an array of proposals in the national assembly on budget cuts seems to echo the sentiments as major state entities and organs are set to feel the financial pinch.
Among the proposed budget cuts, Sh10 billion has been cut from the Teachers Service Commission budget, which is set to have a rippling effect affecting 46,000 intern teachers.
Moreover, MPs have approved significant budget cuts in the health sector, impacting several critical areas. The National Blood Transfusion Services will see a reduction of Sh200 million designated for equipment procurement. The Comprehensive Cancer Centre at Kenyatta University Teaching and Referral Hospital faces a Sh100 million cut, hindering its planned expansion.
Additionally, Kenyatta National Hospital will have Sh500 million less for the refurbishment and renovation of outdated equipment. Also, the Managed Equipment Service, which leases medical equipment to 98 hospitals, will suffer a Sh500 million reduction in funding.
However, the MPs have opposed a proposed Sh3.7 billion budget cut that would impact mileage allowances, funding for IEBC commissioner recruitment, and bodyguard payments. Moreover, MPs have rejected budget cuts for the First and Second Lady’s offices, arguing that terminating staff contracts would create legal complications and more additional costs.
On the other hand, the Auditor General has revealed that the KRA owes Sh4.7 billion to a Swiss firm it contracted nine years ago to supply excise stamps. KRA says the debt is due to the stamps being purchased at a higher cost than the initial contract price.
