Treasury Cabinet Secretary Njunguna Ndung'u has directed government accounting officers to cut additional expenses from their budget following the withdrawal of the Finance Bill.

In a circular addressed to the officers including Principal Secretaries, expenses for car and house loans for public servants will be eliminated. 

Additionally, the CS directed the officials to cut the budget allocated for the purchase of generators by 100 per cent.

In the new financial year, there will also be no expenditure for purchasing household furniture and institutional equipment.

Ndung'u also directed the accounting officers to eliminate the budget allocation for monitoring and evaluation.

"Further to the National Treasury Circular No.6/2024 dated 28th June 2024, limiting the spending of the FY 2024/25 to 15% of the approved budget till the approval of the FY 2024/25 Supplementary Estimates No.1, the Government will control expenditures by initiating austerity measures on the provisions for the operations and maintenance," read the circular in part. 

The accounting officers are expected to submit the revised budgets on Monday, July 8.

The new directives by the CS came after President Wiliam Ruto announced austerity measures that would be undertaken during the 2024/2025 financial year.

In the Friday briefing, the Head of State suspended the purchase of new motor vehicles and renovation of government offices.

He explained that the new measures were necessitated following the withdrawal of the Finance Bill 2024 which caused a budget shortfall of Ksh346 billion. 

"The consequence of withdrawing the Finance Bill is a reduction of our revenue targets by Ksh 346 billion. Over the last few days, our treasury team has been assessing the adverse impact of either reducing the budget by the entire Ksh346 billion or borrowing the full amount.

"Cutting the entire amount would significantly and drastically affect the delivery of critical government services, while borrowing would increase our fiscal deficit by a margin that would have significant repercussions on many other sectors, including interest rates and exchange rates," Ruto announced. By Washington Mito, Kenyans.co.ke