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Ruto announces dissolution of 47 parastals, 50% reduction of advisors & other measures

President Ruto has announced a set of measures to reduce government expenditure

President William Ruto speaking at State House, Nairobi on July 5, 2024

President William Ruto has announced that the government will dissolve at least 47 state corporations.

Addressing the nation on July 5, President Ruto stated that this measure is among many the government will implement to cut its expenditure.

He explained that the parastatals targeted for dissolution have overlapping and duplicating functions. The dissolution of these firms and agencies will relieve the government of the expenditure required to run them.

President Ruto assured staff members in the affected parastatals that they will be transferred to other ministries and government agencies.

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The head of state also announced that the government would reduce the number of advisors in the public service by 50%. This will help lower the wage bill and payroll-related costs.

Other austerity measures include abolishing budgets for the offices of the First Lady, Deputy President, and Prime Cabinet Secretary's spouses. Additionally, the position of Chief Administrative Secretary has been suspended.

Public servants who attain the retirement age of 60 years will be required to retire immediately, with no extensions.

No state officer or public servant shall participate in public contributions or harambees.

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Going forward, the Attorney General, Justin Muturi, has been directed to prepare and submit legislation to this effect and develop a mechanism for structured and transparent contributions for public charitable and philanthropic purposes.

Following the withdrawal of the Finance Bill 2024, which was expected to generate Sh346 billion, the government will have to cut expenditure by Sh177 billion. The balance of Sh169 billion will be borrowed to finance critical government services.

The borrowed funds will be used to protect funding for several critical areas, such as:

  • Hiring of junior secondary school teachers and medical interns
  • Funding the milk stabilisation programme for dairy farmers
  • Reviving stalled road projects in many parts of Kenya
  • Retaining the fertiliser subsidy programme
  • Settling the debt owed to farmers in the coffee sector
  • Capitalising the coffee cherry fund
  • Enabling publicly owned sugar mills to pay outstanding debts owed to sugarcane farmers
  • Funding the new higher education funding model
  • Settling arrears owed to counties, NG-CDF, and pensions.

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