Ruto climbs down, announces radical changes

President William Ruto during a press briefing at State House where he announced further austerity measures taken by the government. [PCS]

There is panic and anxiety among government officials after President William Ruto announced a raft of radical changes to accommodate demands by the youth that he reorganises his government.

In one fell swoop, the President rendered 47 chief executive officers of State corporations jobless and left hundreds of staff gasping for breath after declaring that the entities would be dissolved.

The move, Ruto explained, will result in the elimination of the corporations' operational and maintenance costs, as their functions are integrated into line ministries.

At the same time, the President sealed the fate of the 50 would-have-been chief administrative secretaries, who for 16 months have been waiting for a payslip that will now never come.

President Ruto also scrapped budgetary allocation of First Lady Rachael Ruto and Deputy President's wife, Dorcas Rigathi whose offices will no longer enjoy State funding. 

In his announcement, Ruto further added that the number of government advisors will be reduced by 50 per cent. 

But a cabinet shakeup, which had been highly anticipated following reports that one was in the offing, did not happen.

When he addressed the youth on X Space Friday afternoon, the President admitted that he had been under a lot of pressure to dissolve his Cabinet.

He promised to reconstitute the Cabinet "shortly" and there are indications that about seven Cabinet Secretaries will be shown the door when ministries are reorgnised. Fifteen Principal Secretaries are also likely to be fired.

“Budget lines providing for the operations of the offices of the First Lady, the spouses of the Deputy President, and the Prime Cabinet Secretary shall be removed. Similarly, the budgetary provisions for confidential budgets in various Executive offices, including my office, shall be removed, and the budget for renovations across the government reduced by 50 per cent,” the President said.

Ruto’s purge has also affected public servants who attain the retirement age of 60 years as they will now have to proceed on retirement immediately. There will be no extension of tenures, he directed. 

At the same time, the President suspended the purchase of new motor vehicles by the government for 12 months, except for security agencies.

“All non-essential travel by State and public officers is hereby suspended,” the President said in a televised address.

In a move that is likely to hurt churches which have been a big beneficiary of fundraisers, Ruto banned all State officers and public servants from public contributions and participating in harambees. There has been public outcry about Cabinet Secretaries and MPs splashing huge amounts of money on harambees.

"The Attorney General is hereby directed to prepare and submit legislation to this effect and develop a mechanism for structured and transparent contributions for public, charitable, and philanthropic purposes,” he said.

Other than the austerity measures, the President said he would be making more changes in government.

“We are determined to carry out these and other changes to improve the quality, efficiency, and transparency in serving the people of Kenya and ensure that citizens receive maximum value for their resources from a public sector that prioritizes their welfare,” he said.

Following his decision to withdraw the Finance bill, Ruto announced that he will be proposing to the National Assembly a budget cut of Sh177 billion and borrow the difference.

"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,” he said.

The additional borrowing, he said, will increase "our fiscal deficit from 3.3% to 4.6% and will be used to protect the funding of critical government services such as hiring of Junior Secondary School teachers and medical interns, funding the milk stabilization program for dairy farmers, and reviving stalled roads programs."

The borrowing will also be used to retain the fertilizer subsidy program, settling the debts owed to farmers in the coffee sub-sector, capitalizing the Coffee Cherry Fund and settle sugar debts, additional funding for the higher education new funding model settling arrears owed to counties, NGCDF and pensions.

At the same time, the President appointed a taskforce to carry out a comprehensive forensic audit of the public debt.

“The audit will provide the people of Kenya with clarity on the extent and nature of the debt, how public resources were expended, and will recommend proposals for managing our public debt in a manner that is sustainable and with inter-generational equity,” he said.

The Presidential Taskforce on Forensic Audit of Public Debt will be chaired by Nancy Onyango and Luis  Franceschi as the vice chairperson.

Others who were gazetted by the President include Law Society of Kenya President Faith Odhiambo, Institute of Certified Public Accountants of Kenya (ICPAK) chair Philip Kaikai, Institute of Engineers of Kenya (IEK) President Shammah Kiteme and Vincent Kimosop.

He also appointed Abraham Rugo and Aaron Thegeya as joint secretaries.

The task force will be mandated to verify the current stock of public and publicly guaranteed debt, reconcile the proceeds of loans with the requisite appropriation and reconcile the loan servicing/repayments with the attendant terms of the facility based on the relevant context and the terms of the loans.

Further, the task force will assess whether the country obtained value for money concerning the terms of the loan, the cost of the projects financed, the return on investment, and equity; including inter-generational equity.

It will also assess the adequacy of the public finance management (PFM) framework safeguards on debt management and recommend changes in the control environment to strengthen the governance of the nation’s public debt management system.

"In the light of the current debt burden, the imperative for fiscal consolidation and the constrained fiscal space, recommend alternative sources of financing the country's development needs in the short and medium term and any debt reorganisation plan," the gazette notice reads.