President William Ruto has urged ministries to slash their spending by a cumulative 300 billion so as to relieve the debt burden. This means that the National budget will be revised downwards by 300 billion from 3.31 trillion announced by the former Finance CS Ukur Yattani. The new budget will be 3.01 trillion.

Dr Ruto made the pronouncement on Thursday, September 29 during his inaugural address to the joint parliamentary sitting of the Senate and the National Assembly. The president says that this will improve Kenya’s debt servicing capacity as the government had planned to borrow 900 billion to cover for the budget deficit, but now they will only borrow 600 billion.

“Over the last decade, we have sought to close this gap (budget deficit) with public borrowing. This year alone, we budgeted to borrow Sh900 billion to finance both development and recurrent expenditure. The government should never borrow to finance recurrent expenditure. This is not right, prudent or sustainable, it is simply wrong. We must bring ourselves back to sanity,” he said.

President Ruto announced a three year timeline to do away with borrowing to finance budget deficits. The president envisions this by the government keeping it’s spending on recurrent expenditure below the national revenue.

“To this end, I have instructed the National Treasury to work with ministries to find savings of Sh300 billion in this year’s budget. Next year, we will bring it further down so that, by the third year, we have a recurrent budget surplus.” Dr Ruto added.

This comes at a time when kenya is struggling to pay both local and international loans with Kenya’s debt burden standing a over 8.5 trillion as of September 2022. According to Ruto, Kenya collects Sh2.3 trillion annually which goes towards paying public servants’ salaries and servicing debts.