The National Treasury and Planning Cabinet Secretary, Njuguna Ndung'u, is set to present the 2023/2024 budget to the National Assembly on June 15, 2023.
The budget, which is the first under President William Ruto's regime, is estimated at Ksh3.6 trillion, an increase of Ksh251 billion from the 2022/2023 budget.
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6:00 pm: Prof Ndung’u’s proposes to introduce an excise duty rate of 15 per cent of the excisable value of fees charged on advertisement by all TVs, print media, billboards and radio stations in promotion of alcohol, betting, gaming, lottery and price competition is a positive step.
This is after a section of MPs claimed that these activities are extremely addictive and resort to harmful repercussions in society.
The introduction of an excise duty on advertising for these products seeks to reduce consumption by making them more expensive, which would discourage people from consuming them.
While debating Finance Bill 2023 on Wednesday, June 15, the MPs noted that reduced consumption would lead to reduced harm, as people would be less likely to experience the negative consequences of these activities, such as addiction, financial problems, and health problems.
In agreement, CS Ndung'u states that the government would generate revenue from the excise duty, which could be used to fund programs to reduce the harm caused by the products.
"Consumption of alcohol, betting, gaming and lottery and price competition are extremely addictive and resort to harmful repercussions in society.
"In order to discourage these activities and consumption of alcoholic beverages, I propose to the National Assembly to introduce an excise duty rate of 15 per cent of the excisable value of fees charged on advertisement by all TVs, print media, billboards and radio stations in promotion of alcohol, betting, gaming, lottery and price competition," Prof. Njuguna Ndung’u.
5:40 pm: The Treasury Cabinet Secretary proposes to allocate Ksh141.2 billion to the health docket, noting that it is one of the most important sectors in Kenya, and is essential for economic development.
Ndung'u observed that more funding will help to improve access to healthcare, especially for people living in rural areas and people from poor families.
The funding will also be vital in improving the quality of healthcare, including the provision of better facilities, more qualified healthcare workers, and more resources.
5:20 pm: CS Ndung'u states that the education sector is one of the most important sectors in Kenya, and it is essential for economic development.
He outlines that the benefits of allocating more funding to the education sector will help to improve access to education, especially for girls and children from poor families.
More funding will help to improve the quality of education, including the provision of better facilities, more qualified teachers, and more resources.
"To improve education outcomes in the country, I propose to the National Assembly to effect the budget allocation of Ksh628.6 billion to the education sector," CS Ndung'u states.
5:00 pm: CS Njuguna Ndung'u explains that the fiscal gap is projected to decline to Ksh718 billion, equivalent to 4.4 per cent of GDP in the financial year 2023/24, from a projected Ksh840.9 billion equivalent to 5.8 per cent in the financial year 2022/23.
He explains that there are a number of reasons for this decline, including the fact that the government is projecting higher revenue collection in 2023/24. This is due to a number of factors, including the implementation of new taxes, such as the digital tax, and the growth of the economy.
Ndung'u is also projecting lower expenditures in 2023/24 due to a number of factors, including the rationalisation of government programs and the implementation of austerity measures.
He notes that the decline in the fiscal gap is a positive development. It means that the government will be able to borrow less money and will have more resources to invest in development programs.
"The fiscal deficit will be financed through net external financing of Ksh.131.5B, equivalent to 0.8 per cent of GDP, and net domestic financing of Ksh586.5 billion, equivalent to 3.6 per cent of GDP," Ndung'u states.
4:50 pm: To ensure the legitimacy of land ownership, CS Njuguna Ndung'u proposes the creation of a fund that will be used to process and register title deeds, settle the landless, digitise land registries, and construct land registries.
He explains that the fund seeks to increase the security of land tenure and make it easier for people to access credit and invest in their land.
It will also reduce land disputes in order to create a more peaceful and stable environment for economic development.
"I propose Ksh1.2bn for processing and registration of title deeds, Ksh2.6 billion for settlement of the landless, Ksh755 million for digitization of land registries and Ksh138.3 million for the construction of land registries," CS Njuguna Ndung'u.
4:30 pm: CS Ndung'u notes that the Treasury has prepared a memo requesting the Cabinet to approve the establishment of a pending bills verification committee to carry out a thorough analysis of the stock of all pending bills and advise on how they will be settled.
He explains that the committee will be composed of representatives from the Treasury, the Controller of Budget, the Attorney General's Office, and the Public Procurement Authority.
"Treasury has prepared a memo requesting Cabinet to approve the establishment of a pending bills verification committee to carry out a thorough analysis of the stock of all pending bills and advise on how they will be settled," CS Njuguna Ndung'u stated.
The committee will be tasked with identifying all pending bills, including the amount owed, the supplier, and the date of the bill.
It will also verify the validity of the bills, including whether the goods or services were delivered or the work was completed as agreed.
The committee will advise on how to settle the bills, more so, whether they should be paid in full, in part, or not at all.
4:20 pm: CS Ndung'u states that the resilience of the Kenyan banking sector is a positive sign for the Kenyan economy. It shows that the sector is still able to provide credit to businesses and households, which is essential for economic growth.
He assures that the government will continue to support the sector and encourage the adoption of new technologies.
"The banking sector remains resilient in 2022. Deposits held by the sector increased by 12.3 per cent while pre-tax profits increased by 22.0 per cent.
"On the other hand, gross non-performing loans for the sector stood at 13.3 per cent in December 2023, a decline from 14.7 per cent in June 2022," CS Ndung'u revealed.
He also thanks international lenders, including World Bank and International Monetary Fund (IMF).
"Allow me to thank the World Bank, IMF, African Development Bank, European Union and the many bilateral donors, institutions and Governments that have walked the journey of socioeconomic transformation with Kenya," Ndung'u expressed gratitude.
4:00 pm: The Cabinet Secretary announces plans to roll out an end-to-end electronic procurement system (e-procurement) which is expected to enhance efficiency and transparency in government procurement, and to ease the cost of doing business with the government.
He explains that the e-procurement system will be implemented in all government agencies, including ministries, departments, and parastatals. It will cover all procurement activities, from the planning of procurement to the award of contracts.
"End-to-end govt e-procurement system to be rolled out by December 2023 in all govt agencies to enhance efficiency and transparency, and ease the cost of doing business with the government," CS Ndung'u assured.
The system will use a web-based platform to allow suppliers to submit bids for government contracts. It will also use a number of other technologies, such as electronic signatures and encryption, to ensure the security and integrity of the procurement process.
He states that the implementation of the e-procurement system is expected to save the government money by reducing the cost of processing procurement documents and by eliminating the need for physical meetings between government officials and suppliers.
3:50 pm: CS Ndung'u states that the inflation rate has been on the rise in recent months, reaching a high of 8.7 per cent in May 2023.
However, the Cabinet Secretary explains that the Central Bank of Kenya (CBK) has taken steps to bring inflation under control, including raising the benchmark interest rate and selling government securities.
"The inflation rate is expected to return to the target range within the second quarter of the financial year 2023/24," CS Ndung'u states.
He explains that the government expects inflation to return to the target range of 2.5 per cent to 7.5 per cent within the second quarter of the financial year 2023/24. This is achievable if the CBK continues to implement its monetary policy measures and if the global economy remains stable.
3:40 pm: The Cabinet Secretary expresses confidence in the economy noting the Gross Domestic Product (GDP) is expected to rebound in 2023, with growth projected to reach 5.5 per cent, up from 4.8 per cent in 2022. This growth is expected to be driven by a number of factors, including a recovery in global demand.
He explains that the Kenya Kwanza government will continue to invest in ordinary businesses, including the informal sectors.
"The government has invested a total of Ksh11 billion which has been revolving within the fund. So far, Ksh16.07 million, of which Ksh7.1 million are repeat customers, have accessed the fund. Ksh30.8 billion has been borrowed from the fund," Ndung'u stated.
3:30 pm: While reading the budget, page by page, Ndung'u acknowledges the effort of those who took part in the budget-making process, which he states was tedious and demanding.
"I wish to extend my sincere gratitude to the President for his wise council during the preparations of this budget policy highlights.
"The financial budget for 2023/2024 has been prepared against the background of challenging external and domestic environments," CS Ndung'u stated.
Ndung'u states that in order to address food security in the country, the government made the decision to develop a database of all Kenyan farmers.
"The government has registered 5,000,000 farmers nationwide and issued over 2.5 million E-vouchers to registered farmers," CS Ndung'u stated.
3:00 pm: Azimio la Umoja Members of Parliament walk out of the chambers as Treasury Njuguna Ndung'u begins reading the budget.
2:32 pm: CS Ndung'u arrives at the National Assembly after posing for photos at the Treasury.
"We are ready to read the Budget 2023/2024," CS Ndung'u assured as he moved out of his office to the front yard.
2:20 pm: Defence Cabinet Secretary Aden Duale assures Kenyans that President William Ruto will fulfill his bottom-up agenda.
"There are people stating that we used the hustlers (to ascend to power), but we didn't. Every government implements its promises through budgetary provisions.
"There’s a deliberate attempt by gov’t to set aside Ksh300 billion in order to achieve the bottom-up economic transformation agenda," Duale stated.
Students from various schools nationwide were also allowed to witness the occasion from the National Assembly gallery.
2:00 pm: Police arrest protesters outside Parliament.
1:51 pm: A choir performs outside the National Treasury building in Nairobi ahead of budget reading, signaling a new tradition. The melodious voices of the singers punctuated the highly tense moment at the National Treasury along Harambee Avenue, Nairobi.
The singers seemingly enjoyed the moment as they grabbed the attention of both the media and members of the public.
1:30 pm: Treasury Cabinet Secretary Njuguna Ndung’u calls on Kenyans to make deliberate sacrifices to save the country from the economic crisis in which the country found itself.
CS Ndung'u noted that the sacrifices will be short-term, as described in the 2023/24 Budget and the Finance Bill 2023.
“We have to have some short-term sacrifices to achieve the long-term. We have to sacrifice for the future. This administration started with two severe problems -- financing constraints for projects and we did not have headroom for debt," CS Ndung'u stated.
12:20 pm: Kenyans share opinions on the Budget 2023/2024 and the Finance Bill 2023.
Ordinary citizens expressed their frustrations with the current state of the economy and asked President William Ruto's regime to fulfill his promise of prioritizing the ordinary citizens.
"How will the government implement its bottom-up approach manifesto if they reduce financing to devolution? The budget is killing devolution. They are not putting finances into areas they promised will create the transformation.
"The government has ensured the budget complies with the law but it doesn’t translate to accountability; Kenyans made themselves heard about excessive taxation but were not heard," Economist Wanjiru Gikonyo stated.
11:40 am: Kiharu Member of Parliament Ndindi Nyoro states that the government was forced to increase the budget due to the prevailing economic situation in the country.
Nyoro also explained that the government's options were limited to more borrowing, increasing taxation and relying on donations from wealthy nations.
"The government has invested a lot of money to ensure that it has paid its debts and reduced the number of loans from foreign countries," Nyoro explained.
11:00 am: Professor Njuguna Ndung'u, Cabinet Secretary for Treasury, explains that the Finance Bill 2023 would reduce the cost of basic goods and make life way affordable for many Kenyans.
"Kenyans expect to see the results of the budget-making process. The bottom line is to turn around the country’s economy and lower the cost of living," Treasury CS Ndung'u stated.
10:00 am: Treasury Principal Secretary Chris Kiptoo dispels the notion that Kenyans will be overtaxed due to the Finance Bill 2023.
"Even as we raise revenue, the focus moving forward will be on productivity and getting value for money in expenditure. It is also important to note that strengthening the revenue authority is our biggest priority," Kiptoo stated.
Here are some of the key highlights of the 2023/2024 budget:
Economic recovery: The budget allocated Sh1.5 trillion to economic recovery initiatives, such as infrastructure development, manufacturing, and agriculture.
Job creation: The budget allocated over Ksh500 billion to job creation initiatives, such as the Uwezo Fund and the Kazi Kwa Vijana program.
Cost of living: The budget allocated over Ksh200 billion to reduce the cost of living by subsidizing food and fuel prices.
Education: The budget allocated over Ksh1 trillion to education, including increasing the number of teachers and building new schools.
Healthcare: The budget allocated over Ksh500 billion to healthcare, including increasing the number of hospitals and clinics.
