President Uhuru Kenyatta will have to approve all foreign trips by senior Government officials including Cabinet Secretaries in a fresh austerity drive that will see spending on luxurious items slashed by more than half.
Acting Cabinet Secretary for National Treasury Ukur Yatani said all other government officials wishing to travel abroad will have to get the green light from the Cabinet Secretaries as the Government moves to reduce spending on “non-essential” such as training, conferences, foreign and local trips, tea and advertisements.
“If you used to send two people for a conference, we will make sure you send only one,” said Yattani.
He also noted that they have put in place measures that will curb the perennial mad-rush by ministries, departments and agencies to spend money they have towards the end of the financial year.
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Some civil servants we spoke to, said whereas the policy is not new, it has not been stringently enforced.
“I want to assure you that we are not only serious, but we have no other option. Because we have to live within our means,” said Yatani on Friday after signing a Sh88 billion financial assistance with the Government of Japan.
“We cannot continue borrowing. And the easier route is that we cut down on our expenditure,” said Yatani noting that while they have no leeway on cutting salaries and statutory deductions such as NHIF and NSSF, there were things ministries could do without.
“If we don’t train people this financial year, nobody is going to die; if you don’t go for foreign trips or local trips, nobody is going to get a headache,” said Yatani.
He said although how much civil servants will get in terms of per diem remains the discretion of ministries, they have given the ministries options. This austerity will be sustained for the rest of the current financial year as the Government moves to reduce its uptake of loans.
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“We want to rationalise our budgets to reduce the uptake of loans,” said Yatani. “We are appealing to, not only the ministry, but also Kenyans to understand. All these will come with certain painful outcomes. But I think it is something we can tolerate for the time being,” added Yatani.
It is not just civil servants that will feel the weight of these spending cuts, but also individuals and businesses that have been doing business with the Government including hotels, suppliers of cars and printing materials.
However, the latest Exchequer issues published in the Kenya Gazette on Friday shows that in July and August Treasury had already disbursed to Ministries, Departments and Agencies Sh153 billion, which is Sh20 billion more than what it had released in the same period last year.
Some of the disbursed cash might as well not be utilised, should the state corporations tighten their belts as per Treasury’s advice.
This comes hot on the heels of the Controller of Budget report that showed that President Uhuru Kenyatta’s austerity plan took a backseat in the 12 months to June, as his office and MPs splurged taxpayers’ money on foreign trips.
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The Presidency – which includes the offices of the Head of State and his deputy – spent Sh197 million on foreign trips, nearly double what it spent on such travels in the previous financial year.
Members of the National Assembly – whose recent trip to the US ignited public anger – used Sh1.6 billion on overseas trips, more than double the Sh719 million they spent on the item in the 2017/18 financial year.
Some 85 lawmakers and their support staff reportedly travelled to the US on August 5, where National Assembly Speaker Justin Muturi and his Senate counterpart Ken Lusaka led the delegation.
The latest surge in expenditure items is an indictment on the President’s commitment on austerity plan, which some critics have described as a public relations exercise aimed at hoodwinking investors.
In recent years, the Treasury has proposed policies aimed at slashing expenditure on non-essential items, even as it cranks up tax revenues.
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But despite the tough talk on austerity, the report, the last by the outgoing Controller of Budget Agnes Odhiambo, shows that MPs’ salaries and allowances increased by Sh2 billion to reach Sh11.2 billion during this period.
Generally, State corporations spent more on foreign travel, conferences, training and domestic travel, making a mockery of Government’s objective of trimming its budget.
Expenditure on hospitality by all the ministries, departments and agencies (MDAs) also doubled to Sh9.8 billion during this period, from Sh4.7 billion in 2017/18 financial year.
Uhuru has been on the forefront pushing for a lean budget that has seen some development projects frozen, save for those related to his Big Four agenda.
However, last year, the Government found it difficult to stick to its own austerity plan, borrowing an additional Sh114 billion in the last financial year as increased wages and interest payments ate into most of the taxes.
For the current financial fear, the Treasury unveiled a raft of austerity measures, including the freezing of further recruitment of civil servants, except for key technical staff, security personnel, teachers and health workers.
The Government will also not extend the service of thousands of civil servants set to retire after attaining the age of 60.
Moreover, Treasury announced plans to undertake another purge on the Government payroll to weed out ghost workers.
The CS also acknowledged that the Government had been leasing office space at higher than market rates, resulting in huge costs.
In his budget statement, former Treasury Cabinet Secretary also noted that the Government was mooting a new transport policy that will standardise the institutional framework for fleet management and use of fuel cards across Government in order to improve efficiency and cut cost.
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Uhuru KenyattaNational TreasuryUkur Yatani
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