Ruto Announces Dissolution of 47 State Corporations and Other Cost-Cutting Measures

In a hurry? Here’s a quick summary…

• President Ruto announces the dissolution of 47 state corporations and significant public sector reforms to cut government expenditure.
• Key measures include reducing the number of public service advisors, abolishing certain office budgets, and enforcing mandatory retirement at age 60.

President William Ruto has announced that the government will dissolve at least 47 state corporations to reduce expenditure. 

Speaking to the nation on July 5, President Ruto explained that the targeted parastatals have overlapping and duplicating functions, and dissolving them will cut unnecessary costs. 

He assured staff members that they will be transferred to other ministries and government agencies.

Additionally, the President revealed plans to cut the number of public service advisors by 50%, aiming to lower the wage bill and related payroll costs. 

Further austerity measures include abolishing budgets for the offices of the First Lady, Deputy President, and Prime Cabinet Secretary’s spouses, and suspending the position of Chief Administrative Secretary.

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Public servants will now be required to retire at 60, with no extensions, and state officers are prohibited from participating in public contributions or harambees.

To ensure these measures are enacted, Attorney General Justin Muturi has been directed to prepare and submit the necessary legislation. 

This includes developing a transparent mechanism for public charitable and philanthropic contributions.

Following the withdrawal of the Finance Bill 2024, expected to generate Sh346 billion, the government plans to cut expenditure by Sh177 billion and borrow Sh169 billion to finance critical services. 

These funds will support hiring junior secondary school teachers and medical interns, funding the milk stabilization program, reviving stalled road projects, retaining the fertilizer subsidy program, settling debts owed to coffee and sugarcane farmers, capitalizing the coffee cherry fund, funding the new higher education model, and settling arrears owed to counties, NG-CDF, and pensions.