Huge Spending Cuts Loom as Treasury Eyes Mini-Budget

The National Assembly has initiated a process to significantly cut the budget of the three arms of government by Sh156.39 billion, following President William Ruto’s recent proposal. The public has been invited to submit memoranda on the Supplementary Estimates 1 for the financial year 2024/2025 after the National Treasury Principal Secretary submitted the budget estimates to the Assembly on July 12.

The PS’s submissions included the Programme Based Budget, recurrent estimate, development estimates, and a memo on the supplementary budget estimates 1. Consequently, Speaker of the National Assembly Moses Wetangula referred the budget considerations to the Budget and Appropriation Committee, chaired by Ndindi Nyoro.

The Supplementary Estimates 1 for the Financial Year 2024/2025 aims to implement necessary austerity measures and actualize expenditure cuts across the three arms of government, Constitutional Commissions, and Independent Offices. The estimates propose to reduce the budget for the three arms of government by Sh156.39 billion, comprising Sh34.04 billion from approved recurrent expenditure and Sh122.35 billion from approved development expenditure.

“This is a 6.6% decrease in expenditures approved in the estimates for the financial year 2024/25 and seeks to rationalize the approved estimates for this year,” the notice states. Further, the estimates aim to align the expenditure for the financial year 2024/2025 with the revised fiscal framework and account for the carryovers from the financial year 2023/2024.

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The proposed cuts are part of broader efforts to ensure fiscal responsibility and sustainability in light of the current economic challenges facing the country. The public’s input on these supplementary estimates will be crucial in shaping the final budget adjustments, ensuring that essential services are maintained while achieving the necessary budgetary reductions.

As the National Assembly deliberates on these estimates, the focus will be on balancing the need for fiscal austerity with the imperative to support critical development projects and maintain essential services. The outcome of this process will have significant implications for the country’s financial stability and economic growth in the coming years.