State announces stringent cost-cutting approaches

In a move aimed at cutting expenditure in government, the Head of Public Service Felix Koskei has announced stringent measures including suspension and termination of procurement of non-priority items.

In a statement, he said accounting officers have been directed to suspend and immediately cease the procurement, printing and production of corporate wear; including but not limited to T-shirts, shirts, tracksuits, and any other branded clothing items.

The government also stopped the purchase of promotional merchandise such as calendars, diaries, umbrellas, power banks, key holders, bags, flasks, cups, branded traditional blankets, notebooks, and any other promotional materials.

Controller of Budget Margaret Nyakang’o revealed in her report in February that spending on printing and advertising by ministries shot up by Sh25 million in the last six months while vehicle maintenance went up by Sh51 million.

“In steering the nation towards economic renaissance, the administration continues with implementation of the Bottom-Up Economic Transformation Agenda (BETA), within the framework of a macroeconomic strategy focused on fiscal consolidation,” the statement.

Koskei said the policy on fiscal consolidation is anchored upon enhanced revenue mobilisation as well as austerity measures underpinned by the rationalisation of non-priority expenditure and implemented in a manner that nevertheless protects essential social development spending.

He added that in keeping with this plan, the 2024 Budget Policy Statement (BPS) approved by Parliament is themed as “Sustaining Bottom-Up Economic Transformation Agenda for Economic Recovery and Improved Livelihoods.”

“In that regard, and in an effort to further streamline expenditures and optimise the utilisation of public resources; all ministries, State departments, and corporations/agencies are directed to optimise their operations and rationalise all non-priority expenditure items in accordance with the guidelines issued by the National Treasury,” Koskei directed.

A report by the Controller of Budget released in February, revealed that expenditures in Government remain high with hospitality being the only area where change had been witnessed with a reduction of Sh1 billion.

Recurrent budgets

During the last six months of last year, ministries and State agencies spent Sh752 billion on recurrent budgets, which was Sh76 billion more than the Sh676 billion reported in a similar period in the Financial Year 2022-23.

Travel alone shot up by Sh3 billion compared with what State agencies spent during a similar period last year. Travel expenditure amounted to Sh11 billion compared to Sh8.1 billion recorded the previous year.

Domestic travel rose to Sh7.7 billion from last year’s Sh5.4 billion while foreign travel went up to Sh3.7 billion from Sh2.6 billion.

Nyakang’o has since questioned the budget cuts called by the Kenya kwanza administration.

The aim of the austerity measures was to free resources for the implementation of government-priority activities under BETA. Report further reveals that the government spent Sh12.4 billion on insurance and another Sh1.8 billion on motor vehicle fuel and lubricants.

On the flip side, spending on hospitality and training went down from Sh4 billion to Sh2.9 billion and Sh2.6 billion to Sh1.9 billion respectively.

The presidency, the report reveals, are among the agencies that cut on hospitality spending. Compared with the Sh559 million that the office spent in a similar period last year, the amount for the three top offices— President, Deputy President, and Prime Cabinet Secretary— went down to Sh446 million.

Presidency remains the biggest spender on hospitality with the President’s office using up Sh223 million, Sh206 million in respect of the DP’s office, and Sh201 million for the National Treasury.

Treasury has set new rules limiting access to special pre-negotiated umbrella prices and quality of goods and services for multiple government contracts in a move aimed at curbing abuse of procurement processes.

Treasury said the procurement option known as framework agreements would now only be granted in special conditions unlike presently when contractors have blanket access to the special deals.