President William Ruto/Courtesy.
March 26 – President William Ruto has declared that time has come for loss-making parastatals to be phased out, while those making profits must put an end to wasteful spending.
He emphasized that the government, along with State corporations, must live within their means and ensure that expenditure does not exceed revenues.
Speaking to chairs and CEOs of State corporations at State House Nairobi, the President expressed concern that some agencies have been draining the Exchequer for years with their continuous losses.
“The money some parastatals make does not belong to their boards or management. It belongs to the people of Kenya as returns on investment.”
Also read: Kindiki Rejects America’s Push To Allow Mysterious WorldCoin Operations In Kenya
He stressed that the country can no longer afford to accumulate debt and borrowing will only lead to further economic decline.
“Now that the economy has stabilised, we cannot continue accumulating debt. Borrowing will only lead us down the cliff,” the President said.
President Ruto addressed the issue of wastage in State corporations, reminding them that the money they generate belongs to the people of Kenya and not for the benefit of their boards or management.
He lamented the widespread abuse of public resources, which has hindered service delivery.
“We will also leverage on technology to check on improper payments and maximise on the value for money,” he said.
Expenditure Cuts
Consequently, the President directed that Government budgets and expenditures will now undergo rigorous scrutiny and the use of technology will be employed to ensure proper payments and maximize value for money.
The move to reduce expenditure aims to curb unnecessary borrowing and expedite the government’s transformation agenda.
President Ruto emphasized the need to consolidate functions, eliminate duplicity, and put an end to wastage and loss-making institutions.
He cited cases of parastatals with duplicated and overlapping roles, deeming the situation illogical and calling for their closure.
“It is illogical. We have to shut down some of these loss-making parastatals. We must end excess capacity,” president William Ruto noted.
President Ruto stressed the urgency of living within the country’s means and abandoning the habit of running significant budget deficits.
He set a target of achieving a balanced budget within three years, acknowledging the challenges but emphasizing the necessity of the task.
In an effort to further reduce spending, the President directed CEOs to cut their recurrent budgets by 30 percent.
Additionally, commercial State corporations must now remit 80 percent of their profits after tax to the National Treasury, with further instructions to be provided on the use of the remaining 20 percent.
Regulatory institutions were ordered to remit 90 percent of their surplus funds to the Treasury, without exceptions.
President Ruto’s directives reflect the government’s commitment to financial prudence and the responsible management of resources.
The aim is to ensure that public funds are used efficiently and effectively for the benefit of all Kenyans.
By implementing these measures, the government seeks to foster economic stability, reduce dependency on borrowing, and accelerate the country’s development agenda.
Subscribe to our newsletter to get interesting news stories everyday
