Government Set for Budget Reduction As President Ruto Signs Appropriations Bill 2024

In a hurry? Here’s a quick summary…

• President William Ruto signed the Appropriations Bill, 2024 into law to ensure government operations continue after rejecting the Finance Bill, 2024.
• The Treasury is directed to prepare a supplementary budget to account for the Ksh.346 billion revenue shortfall and adjust government expenditures accordingly.

President William Ruto has signed the Appropriations Bill, 2024 into law, ensuring the continuity of government operations for the next financial year after the withdrawal of the Finance Bill, 2024. 

In a statement to newsrooms on Friday, the President emphasized that the Appropriations Bill is essential for the operation of critical government services in accordance with the law until the Treasury can prepare a supplementary budget.

The President explained that the Treasury is now required to prepare supplementary estimates to reduce government expenditure by the amount of revenue that was expected to be generated by the rejected Finance Bill, 2024. 

“On Wednesday, June 26, 2024, I declined to sign the Finance Bill 2024, sending a memorandum to the National Assembly rejecting all clauses of the Bill. Articles 221 and 222 of the Constitution require that the Appropriations Bill be assented to by June 30 each year to guarantee the continuity of government operations, especially in providing critical services,” he stated.

President Ruto added that he has signed the Appropriations Bill 2024 and instructed the National Treasury to immediately prepare supplementary estimates to reduce expenditure by the expected revenue from the rejected Finance Bill 2024. 

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The Finance Bill was projected to generate Ksh.346 billion, and this shortfall will now impact all levels of government. 

“With respect to the National Government, the reduction will be borne by the Executive, the Legislature, the Judiciary, and our constitutional commissions,” he noted.

Additionally, President Ruto referred the County Allocation and Revenue Bill, which was based on anticipated revenues from the rejected Finance Bill, back to Parliament for reduction. 

He also directed the National Treasury to submit amendments to the Division of Revenue Act 2024 to Parliament to reflect the reduced revenues resulting from the rejected Finance Bill.

The President’s directive mandates that all accounting officers ensure only critical and essential services are funded, using no more than 15% of the budget, until the supplementary budget is approved. 

Ruto’s verbal withdrawal of the contentious Finance Bill on Wednesday sparked debates about his constitutional powers, given that Parliament had gone on recess earlier in the day and would resume regular sittings on Tuesday, July 23. 

According to clause 6 of the Constitution, if the President refuses to sign a Bill and fails to return it to Parliament within 14 days, the Bill becomes law. 

Therefore, Ruto had to officially initiate the process by writing to Speaker Moses Wetangula.