Kenya’s President William has announced that loss-making parastatals will be shut down.
Also, those that make profits must stop wasteful expenditure, including financing largesse in their parent ministries and unnecessary procurement.
Subsequently, Ruto directed that the government, including State corporations, must live within its means. Consequently, expenditure must always be within the revenues collected.
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Speaking to chairs and CEOs of State corporations at State House Nairobi on Tuesday morning, President Ruto said some agencies have been making losses for years and have become a drain on the Exchequer.
“Now that the economy has stabilised, we cannot continue accumulating debt. Borrowing will only lead us down the cliff,” the President said.
The President said about wastage in state corporations: “The money some parastatals make does not belong to their boards or management. It belongs to the people of Kenya as returns on investment.”
The Kenyan leader regretted that the abuse of public resources has become so rampant that it inhibits service delivery.
From now on, he directed that Government budgets and expenditures be subjected to rigorous scrutiny.
“We will also leverage on technology to check on improper payments and maximise on the value for money,” he asserted.
He explained that reducing expenditure will stop unnecessary borrowing and accelerate the government’s transformation agenda.
“We must get it right. We must do what is right. This is the time,” he added.
He told the meeting that the government would engage in an elaborate consolidation process to end duplicity of functions, wastage, and the winding up of loss-making institutions.
He cited cases of parastatals that have duplicated and overlapping roles.
“It is illogical. We have to shut down some of these loss-making parastatals. We must end excess capacity,” the
President Ruto said Kenya must begin living within its means and stop the habit of running substantial budget deficits.
“In three years’ time, we must run a balanced budget. It won’t be easy but we must do it,” he said.
The President also directed the CEOs to reduce their recurrent budgets by 30 per cent.
Additionally, commercial State corporations must, from now on, remit 80 per cent of their profits after tax to the National Treasury.
The President said, “We will give you directions on what to do with the remaining 20 percent.”
Regulatory institutions were ordered to remit 90 per cent of their surplus funds to the Treasury.
“There will be no exceptions. Everybody must comply,” President Ruto directed.
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