BREAKING LIVE: RUTO & UDA TEAM MEETS WITH RAILA TO PLAN NEW BUGET AFTER GEN Z REJECTED FINANCE BILL?

Introduction

Introduction:

In an unprecedented move, the UDA team led by President Ruto, along with notable figures like Raila, has convened to deliberate on a new budget framework. This follows the rejection of the 2024 Finance Bill, necessitating a shift in strategy.

Main Presentation:

With the budget committee's approval, several critical allocations have been made:

1. Employment allocations for interns and UHC staff, ensuring their confirmation to permanent and pensionable positions.
2. Funding critical sectors, with the provision of Ksh 10 billion for the fertilizer subsidy.
3. Specific allocations for dairy farming, including Ksh 1.5 billion for new KCC.
4. Coffee debt clearance (Ksh 2 billion) and sugar reforms are also highlighted.
5. Examination of the recommendations of the Maraga commission aimed at enhancing the take-home salaries for security officers.

Treasury's Perspective:

The Prime Cabinet Secretary outlined the economic and fiscal implications following the finance bill's rejection:

• Focus is on aligning the budget with the revised fiscal framework by cutting planned activities and projects to close the financing gap of Ksh 344.3 billion.
• Implementation of revenue-raising measures contained in the Finance Act of 2023.
• The shift involves expenditure rationalization, adjustments to projected revenue and borrowing, and policy measures to contain wastage.

Budget Realignments:

The budget cuts include:

• Rationalization of tax revenue for all government-funded expenditures, affecting recurrent and development budgets.
• Specific projects impacted include the Last Mile Electrification, roads projects, water and sanitation, police modernization, and school infrastructure improvement.
• Additional allocations to certain critical government programs include Ksh 2 billion for coffee debts and Ksh 1 billion for sugar can farmers' reforms.

Response to Parliamentary Queries:

The detailed fiscal framework, the criteria for budget rationalization, and public participation projects have all been outlined in the supplementary estimates.

Insight on Growth Prospects:

With adverse global and domestic shocks, the Kenyan economy is showing resilience with notable growth sectors:

• The agricultural sector has seen a strong rebound, bolstered by favorable weather conditions.
• Inflation is now firmly under control, and the exchange rate to the dollar has stabilized.
• Foreign exchange reserves remain sufficient, offering a buffer against short-term shocks.

Macroeconomic Outlook and Risks:

There is an acknowledgment of uncertain domestic and external risks, including unpredictable weather conditions and ongoing demonstrations impacting economic activities. The stabilization of commodity prices remains crucial.

Pending Bills and Debt:

Addressing the critical issue of public debt, it's highlighted that Kenya's credibility hinges on its ability to settle external debts, most burdensome being commercial debts. Transparency in debt details is reaffirmed with comprehensive information available on the National Treasury website.

Keywords

Keywords:

Ruto, UDA, Raila, new budget, Finance Bill rejection, economic framework, budget cuts, fiscal strategy, employment allocations, UHC staff, fertilizer subsidy, coffee debts, sugar reforms, Treasury perspective, fiscal framework, public debt.

FAQ

FAQ:

1. Why was the Finance Bill 2024 rejected? The Finance Bill 2024 was rejected due to concerns about its financial implications, necessitating a revision of the budget.

2. What are the key sectors receiving allocations in the new budget framework? Key sectors include the agricultural sector (fertilizer subsidy), dairy farming, coffee debt clearance, and sugar sector reforms.

3. How is the drop in development expenditure affecting the growth rate? Despite the expenditure cuts, the government expects growth prospects to remain resilient, driven by a rebound in the agricultural sector and robust service sectors.

4. What measures are being taken to address public debt? The presentation reaffirms the necessity to settle external debt, emphasizing transparency in debt details and compliance with international financial obligations.

5. Are there any austerity measures being implemented? Yes, the budget realignment includes significant cuts across various non-priority areas in both recurrent and development budgets to contain wastage and optimize spending.