By Enyichukwu Enemanna
In a bid to bring the country “back to sanity”, Kenya’s new President- William Ruto on Thursday directed the finance ministry to cut 300 billion shillings ($2.5 billion) from annual government spending this year.
Ruto who took over governance Sept. 13, appointed former Central Bank Governor Njuguna Ndung’u as Finance Minister in his cabinet of Tuesday to navigate the economy through rising inflation, a heavy debt burden and drought.
Ruto also said he aimed to bring the recurrent expenditure down further next year by an undisclosed amount, in a bid to achieve a recurrent budget surplus by the third year.
The president did not give details on the expenditure to be cut. Recurrent expenditure usually includes civil servant salaries, domestic and foreign interest payments, pensions and fuel costs for the government fleet of vehicles.
“I have instructed Treasury to work with ministries to find savings of 300 billion shillings in this year’s budget,” Ruto said in his first speech as president to Parliament.
The 2022/23 budget was presented in April.
“Next year, we will bring it further down so that, by the third year, we have a recurrent budget surplus.”
The president said the government should never borrow to finance recurrent expenditure, adding, “the market cannot sustain the kind of borrowing we are doing as a government”.
“We must bring ourselves back to sanity.”
A finance ministry document issued earlier this month showed recurrent expenditures were projected at 2.27 trillion shillings or 16.2 percent of Gross Domestic Product in the 2022/23 (July-June) fiscal year.
