President William Ruto on Tuesday, March 26, ordered the Chief Executive Officers (CEOs) of Kenyan parastatals to reduce their approved budgets by 30 per cent.
Following a meeting held at State House, President Ruto pointed out the need for fiscal discipline in the use of public funds stressing that the recurrent budgets of state-owned corporations must undergo a rigorous audit to stamp out corruption and misuse of public resources.
President Ruto further advised the parastatal CEOs to leverage technology to find optimum ways of running operations and maximising profits.He warned that the expenses must never exceed the budget set.
Recurrent budget means resources set aside for ongoing expenditures such as; salaries, operations, and maintenance cost of capital assets.
"The time is up for loss-making parastatals and those that make profits must stop wasteful expenditure, including financing largesse in their parent ministries and unnecessary procurement," Ruto stated.
"Now that the economy has stabilised, we cannot continue accumulating debt. Borrowing will only lead us down the cliff."
During the briefing, the Head of State discussed the sale of some institutions to the private sector to boost productivity. He pointed out how several entities end up imposing a huge financial strain on the national budget.
He cited cases of parastatals duplicating roles, leading to the wastage of taxpayers' resources.
Ruto, however, noted that the private sector presented a great opportunity to revitalise such companies across various industries.
“In three years, we must run a balanced budget. It won’t be easy but we must do it,” he explained.
In December 2024, Ruto announced plans to privatise 35 state companies, a plan he stated will go a long way towards improving their efficiency.
He noted that the private sector would play a more efficient role in supporting these companies as opposed to the national government.
"We are spending billions of shillings sustaining companies. We have 350 entities that just take money from the budget, we are supporting them. Some of them, nobody can tell you what they are doing," Ruto stated during a conference at the KICC.
