2019/2020 Budget: Treasury CS Henry Rotich Announces Radical Austerity Measures

Treasury Cabinet Secretary Henry Rotich has announced a raft of austerity measures aimed at reducing government expenditure in the next financial year.

Rotich outlined the cost-cutting measures when he read the 2019/2020 budget statement in Parliament on Thursday afternoon.

CS Rotich said all ministries, State agencies and corporations are required to procure cars locally effective July 1st, 2019,

“With effect from July 1st, 2019 all ministries, departments, agencies, and public entities are required to give exclusive preference in procurement of motor vehicles and motorcycles from firms that have assembly plants in Kenya,” Rotich said.

He said the move aims at promoting local manufacturing and creating employment opportunities.

To cut government's spending on domestic and international travel by State officers, Rotich said an electronic card system will be introduced.

"This card would be preloaded with sufficient allowance to be expended by officers traveling on eligible expenditures only," Rotich said.

He also said the government is considering introducing a new transport policy to include the use of fuel cards.

CS Rotich also announced that the government will standardize the procurement of all office accommodation to achieve a uniform cost of leases.

“The government has been leasing office space at higher than market rates. All existing contracts will be renegotiated to ensure a standard rate,” he noted.

To cut the ballooning wage bill, Rotich said the government will restrict the recruitment of new public servants in the coming financial year to key technical staff, security personnel and health workers.

“We will continue to take bold actions to contain our expenditures further in the next financial in order to reduce the deficit,” said Rotich.

He further noted that the government will adopt a policy of no new projects to ensure existing projects are complete.

In the Sh3.02 trillion 2019/2020 budget, the Treasury plans to cover the deficit of Sh607 billion through internal and external borrowing.