On June 26, 2024, President William Ruto decided not to sign the Finance Bill into law and called for its withdrawal.
President Ruto explained that he had listened to the views of Kenyans, and the President pointed out that he would go by the people's wishes.
“Listening keenly to the people of Kenya, who have said loudly that they want nothing to do with this Finance Bill 2024, I concede and therefore I will not sign the 2024 Finance Bill and shall subsequently be withdrawn,” he said during a televised address from State House, Nairobi.
However, the decision to withdraw the Finance Bill 2024 birthed far-reaching consequences to the economy as far as the budget is concerned.
The Kenya Kwanza government stated that budget cuts for the fiscal year 2024/25, aimed to reallocate funds towards critical development projects to cover for money that would have been collected by the withdrawn Finance Bill 2024.
The overall budget reduction amounts to Ksh156 billion, with development expenditure facing a substantial cut of Ksh122 billion and recurrent expenditure being slashed by Ksh34 billion.
The decision will impact various government offices and sectors, with some experiencing severe reductions in their allocations.
One of the most affected entities is the Executive Office of the President, which will see its budget slashed from Ksh5.4 billion to Ksh3.6 billion, marking a significant reduction of Ksh1.8 billion.
“I direct that operational expenditure in the Presidency be reduced to remove allocations for the confidential vote, reduce travel budget, hospitality and buying of vehicles, renovations and other expenditures,” the President said.
Similarly, the Office of the Deputy President will face a cut of Ksh2.1 billion, bringing its new allocation down to Ksh2.6 billion from the initial Ksh4.9 billion.
The Judiciary, another critical arm of the government, will also endure a considerable reduction.
Its budget will be reduced by Ksh1.3 billion, from Ksh23.7 billion to Ksh22.4 billion. This decrease is expected to impact the efficiency and operation of judicial services across the country.
Security and law enforcement sectors are not exempt from the cuts.
The National Police Service’s budget will be trimmed by Ksh2.7 billion, reducing it from Ksh110 billion to Ksh107.3 billion.
The Internal Security sector will witness a drastic reduction of Ksh8.5 billion, with its allocation dropping from Ksh35.8 billion to Ksh27.3 billion.
The education sector, which is crucial for the country's development, will also face significant budgetary constraints.
Basic Education's budget will be cut by Ksh14.9 billion, bringing the new allocation to Ksh27.1 billion from Ksh42 billion.
Higher Education and Research will see a reduction of Ksh4.9 billion, with the new budget set at Ksh20 billion.
Medical Services, a sector essential for public health, will suffer a reduction of Ksh7 billion. Its budget will decrease from Ksh98.9 billion to Ksh91.9 billion, which could affect the provision of healthcare services and medical supplies.
The infrastructure sector, including roads and transport, is also set to experience cuts. The Roads budget will be reduced by Ksh14.1 billion, from Ksh198 billion to Ksh184 billion.
Transport will face a cut of Ksh3.3 billion, with its new allocation set at Ksh48.3 billion.
Several other sectors will see reductions in their budgets:
- Correctional Services: Decreased by Ksh1.2 billion to Ksh34.3 billion.
- Immigration Services: Reduced by Ksh689 million to Ksh14.2 billion.
- Foreign Affairs: Decreased by Ksh3 billion to Ksh20 billion.
- Energy: Reduced by Ksh18 billion to Ksh51 billion.
These cuts reflect the government's efforts to manage its financial resources more efficiently while prioritizing essential development projects.
However, the reductions are expected to challenge the affected sectors in maintaining their service levels and operational efficiency.
As the fiscal year progresses, the impact of these budget cuts will become more evident, affecting various aspects of government operations and public services.
The government will need to find innovative solutions to mitigate the adverse effects of these reductions while ensuring the continuity of essential services to the Kenyan population.
