Nairobi — National Treasury Cabinet Secretary Njuguna Ndung’u has advised Kenyans to brace themselves for tough economic times, saying that the nation’s financial crisis is reaching unfathomable heights.
This comes as the country’s cost of living soars hitting with inflation hitting 9.1 per cent in December as the effects of the Russia-Ukraine war continue to batter the economy.
Speaking during the opening of the public sector hearings for the FY 2023/24 and the medium-term budget, Ndung’u demanded that the ministries should implement austerity measures, including the suspension of any new construction initiatives, to be able to weather through the crisis.
“From all the things we have analyzed, 2023 is not looking good, there are clear signals that it is going to be tough year, and that the global economy is one example in terms of where we are going,” he said.
Ndung’u continued by saying that the over Sh900 billion rising wage bill continues to be a big obstacle for the budget-making office of Parliament and the National Treasury, and he called for action to reduce the cost at both the national and county levels.
On his part, National Assembly Budget and Appropriations Committee Chairman Ndindi Nyoro called on the Treasury to develop a balanced budget in the FY 2023/24 and do away with supplementary budgets which he said are developed because of errors in the budget that can be avoided.
“The amount that goes to the salaries that pay the majority of us working for the 49 billion Kenyans is approximately Sh900 billion, the recurrent maintenance while still earning salary is around Sh600 billion, we must work on our physicals in terms of reducing our deficit and work on our revenues so that we have a more balanced budget,” said Nyoro.
Further, the Treasury CS decried the mismanagement of public funds by numerous government agencies and urged for harsh austerity measures.
Additionally, the Treasury has mandated that all ministries must finish their current projects before beginning any new ones.
“We do not want you to start new projects before you complete existing ones and even where there is an opportunity to restart the idle ones, let us focus on those because that amounts to waste of resources if we have idle projects not completed,” said Treasury PS Chris Kiptoo.
The Treasury intends to suspend expenditures in some recurrent areas such as domestic and foreign travels, communication, printing, training, hospitality, fuel, purchase of furniture, purchase of motor vehicles, refurbishments and routine maintenance in a bid to achieve fiscal consolidation.