Why Ruto has slashed Sh300 billion from 2022/23 budget

Ruto reiterated his promise to run an administration that is open and transparent, welcoming oversight from Parliament.

President William Ruto arrives to inspect a guard of honour mounted by KDF in Parliament on September 29, 2022

President William Ruto made his maiden address in Parliament on Thursday, September 29, 2022, highlighting some of his plans for the next five years.

In his speech, President Ruto said that for Kenya to grow into an upper middle-income country, the government needs to invest at least 25 per cent of the country’s GDP.

He noted that the current national savings rate is below 10 per cent of the GDP which translates to an investment-savings deficit of 15 per cent of GDP.

Over the last decade, we have sought to close this gap with public borrowing. This year alone, we budgeted to borrow Sh900 billion to finance both development and recurrent expenditure.

The government should never borrow to finance recurrent expenditure. This is not right, prudent or sustainable, it is simply wrong. We must bring ourselves back to sanity,” he said.

The head of state instructed the National Treasury to work with ministries to find a way of saving Sh300 billion in this year's budget.

Ruto reiterated his promise to run an administration that is open and transparent, welcoming oversight from Parliament.

He asked MPs to consider revising Standing Orders to allow Cabinet Secretaries to articulate the government’s agenda and answer questions on the floor of the House.

On this matter of oversight and holding government accountable, my administration commits to restoring the place of Parliament in our democracy by respecting the autonomy and oversight authority of Parliament on the executive,” he said.

President Ruto said the government would scale up productivity in agriculture and make sure that every Kenyan farmer, fisherman and pastoralist contributes to sustainable economic growth.

He explained that producing the raw materials required by the agro-industrial and manufacturing value chains would boost Kenya’s export performance, and create millions of jobs.

This is why we have made available fertilizer for our farmers at cheaper rates of Ksh3500 per 50 kg bag down from Ksh6500. We are exploring further mechanisms to bring these prices down,” he stated.

Ruto reaffirmed his pledge to small traders such as hawkers, and mama mbogas, and vowed to help them earn a decent livelihood.

The head of state noted that affordable credit makes a huge difference in the rate of business growth, urging the Credit Reference Bureau to explore a credit scoring system, which allows banks to apply customer segmentation and at the same time end the stigma of blacklisting.

He announced that the government would allocate Sh50 billion every year to the Hustlers Fund, from which micro, small, and medium enterprises can access affordable credit to start and expand their businesses.

Ruto also pledged to support the provision of land for affordable housing and provide access to cheap and stable funding.

These two measures will allow us to undertake mass housing production, and thereby shape our approach to urban development and spatial planning, which unlike before, will deliver sustainable and inclusive human settlement,” he spoke.

The head of state said that the government would submit proposals to provide a framework for a housing off-take plan, which will create incentives for developers to invest more money into the housing strategy on the strength of guaranteed off-take of the completed units.

The president noted that Kenya requires to invest Sh500 billion in water to achieve its targets, which is a lot of money for the government to commit at once.

We will thus adopt a PPP framework by entering into water purchase agreements with investors. This way, we will achieve water for all in less than a decade,” he said.

Speaking on electricity, Ruto said the government would facilitate the development of innovative and effective modalities to provide better off-grid systems, including enabling consumers to form small cooperatives for electricity production.

Concerning health, the head of state vowed to make Universal Health Coverage a reality and liberate Kenyans and their families from the threat of harrowing poverty that stalks them every time a family member falls seriously ill.

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