LIVE BLOG: Eyes On Treasury CS As He Presents Ruto's First Budget

President William Ruto's first budget since taking power on September 13, 2022, is estimated at Ksh3.6 trillion, which is Ksh251 billion more than the 2022/2023 budget.

LIVE BLOG: Eyes On Treasury CS As He Presents Ruto's First Budget
Treasury CS Prof. Njuguna Ndung’u outside Parliament Buildings on June 15, 2023. /CITIZEN DIGITAL

National Treasury and Planning Cabinet Secretary, Njuguna Ndung'u will on Thursday, June 15 present the 2023/2024 budget to the National Assembly.

President William Ruto's first budget since taking power on September 13, 2022, is estimated at Ksh3.6 trillion, which is Ksh251 billion more than the 2022/2023 budget.

Keep refreshing this page as Viral Tea provides you with the latest updates, reactions and analysis during the presentation of the budget.

6.47 pm: Prof. Njuguna Ndung’u: The government is committed to lower the cost of LPG. In addition to the removal of VAT on LPG, I propose to the National Assembly to remove Import Declaration Fees and Railway Development Levy on LPG

6.38 pm: Prof. Njuguna Ndung’u: Consumption of sugar has been associated with various ailments such as Diabetes which has become common in many families. To discourage the consumption of sugar, I propose to the National Assembly to introduce excise duty on imported sugar at a rate of Ksh5 per kg but this excludes sugar imported or purchased locally by registered pharmaceutical manufacturers for use in the manufacture of pharmaceutical products

6.37 pm: CS Ndung’u proposes Ksh889 million for the development of Nairobi Railway City; Ksh1.1 billion for the Nairobi BRT project and Ksh300 million for acquisitions of ferries for Lake Victoria.

6.36 pm: Treasury CS Njuguna Ndung'u proposes a 3% digital asset tax and a 5% withholding tax on income generated through digital content monetisation

6.30 pm: Prof. Njuguna Ndung’u: To enhance good governance and scale up the fight against corruption, I propose to the National Assembly to effect the budget allocation of Ksh3.9 billion for the Ethics and Anti-corruption Commission (EACC).

6.17 pm: Prof. Njuguna Ndung’u: I propose the National Assembly increase the rate of excise duty on betting, gaming, price competitions and lottery from the current 7.% to 12.5%. Remittance of excise duty be made within 24 hours after the closure of the transaction

6.07 pm: Prof. Njuguna Ndung’u: I propose to the National Assembly to amend the VAT Act to remove the preferential rate on petroleum products so that the products will be subject to the standard VAT at 16%

6.06 pm: Prof. Njuguna Ndung’u: There has been an increase in the importation of furniture especially office furniture which has negatively affected the local carpenters and artisans. In order to protect local carpenters and artisans, I propose to the National Assembly to impose an excise duty on imported furniture at a rate of 30% of the customs value excluding furniture originating from EAC countries

6.05 pm: Prof. Njuguna Ndung’u: I propose to the National Assembly to reduce excise duty from 12% to 10% of the excisable value of the fees charged for money transfer services by cellular phone service providers or payment service providers licensed under the national payment system. This will encourage retail transactions at a more affordable rate

6:00 pm: Prof Ndung’u’s proposes to introduce an excise duty rate of 15 per cent of the excisable value of fees charged on advertisement by all TVs, print media, billboards and radio stations in promotion of alcohol, betting, gaming, lottery and price competition is a positive step.

This is after a section of MPs claimed that these activities are extremely addictive and resort to harmful repercussions in society.

The introduction of an excise duty on advertising for these products seeks to reduce consumption by making them more expensive, which would discourage people from consuming them.

While debating Finance Bill 2023 on Wednesday, June 15, the MPs noted that reduced consumption would lead to reduced harm, as people would be less likely to experience the negative consequences of these activities, such as addiction, financial problems, and health problems.

"Consumption of alcohol, betting, gaming and lottery and price competition are extremely addictive and resort to harmful repercussions in society.

"In order to discourage these activities and consumption of alcoholic beverages, I propose to the National Assembly to introduce an excise duty rate of 15 per cent of the excisable value of fees charged on advertisement by all TVs, print media, billboards and radio stations in promotion of alcohol, betting, gaming, lottery and price competition," Prof. Njuguna Ndung’u. 

5.59 pm: Prof. Njuguna Ndung’u: To ease the process of VAT exemption on aircraft spare parts and encourage investment in this area, I propose to the National Assembly to remove VAT on all aircraft simulators for training our pilots and aircraft spare parts

5.49 pm: Prof. Njuguna Ndung’u: To protect the local assembly of smartphones and other mobile phones, Kenya was allowed to extend the import duty rate of 25%. We were also allowed to extend duty-free importation of inputs for the assembly of smartphones and other cellular phones

5.39 pm: Prof. Njuguna Ndung’u: Kenya will import rice at a rate of 35% instead of 75% under the EAC common external tariff. Kenya will import wheat under the East African Community Duty Remission scheme of 10% instead of 35%

5.20 pm: Prof. Njuguna Ndung’u: To further empower our women, I propose to the National Assembly to effect the budget allocation of Ksh245 million to strengthen prevention and response to gender-based violence in Kenya, Ksh3 billion for the Kenya Government Affirmative Action Fund

5.13 pm: Prof. Njuguna Ndung’u: I propose to the National Assembly to effect the budget allocation of Ksh38.2 billion for social protection and affirmative action. Out of this, Ksh18 billion will cater for cash transfers to the elderly, Ksh7.9 billion for orphans and vulnerable children and Ksh1.2 billion for persons living with severe disabilities.

5.05 pm: Prof. Njuguna Ndung’u: To step up the war on crime and enhance support to the administration of justice, I propose to the National Assembly to effect the budget allocation of Ksh856 million to equip the National Forensic Laboratory.

4.53 pm: Prof. Njuguna Ndung’u: The government’s commitment is to turn the housing challenge into an economic opportunity to create quality jobs. This will be achieved through facilitating the delivery of 250,000 houses per annum and enabling affordable housing mortgages. I propose to the National Assembly to effect the budget allocation of Ksh35.2 billion for the housing program

4.48 pm: Prof. Njuguna Ndung’u: Guided by best practice, the govt intends to change the public debt ceiling from a numerical number to a debt anchor inform of a ratio of public debt to GDP in present value terms

4.47 pm: Prof. Njuguna Ndung’u: To further support MSMEs, women and the youth of this country, I propose to the National Assembly to effect an additional budget allocation of Ksh10 billion towards the Hustler’s Fund, Ksh300 million to SMEs in the manufacturing sector, Ksh182.8 million for women enterprise fund, Ksh175 million for youth enterprise and development fund and Ksh192 million to Uwezo Fund

4.44 pm: Prof. Njuguna Ndung’u: Kenya’s public debt remains sustainable but with elevated risks of debt distress due to persistent global shocks that adversely affect the liquidity ratios… Although the debt burden has risen, Kenya has not accumulated debt service arrears and the govt is committed to honouring all public debt obligations as they fall due

4.35 pm: Prof. Njuguna Ndung’u: As part of the economic turnaround plan, the government will scale up revenue collection efforts to a target of Ksh4 trillion over the medium term. To achieve this, the government is undertaking a combination of both administrative tax measures and policy reforms.

4.21 pm: Prof. Njuguna Ndung’u: To ease the cost of doing business and minimise compliance costs for MSMEs, the Competition Authority of Kenya will exclude the MSME sector from merger notifications, thus enabling startups, and digital businesses, among others. Further, the authority will monitor and conduct surveillance audits specifically in manufacturing and agro-processing sectors to protect MSMEs from incidences and abuse of buyer power

4.20 pm: Prof. Njuguna Ndung’u: With regard to Kenya Airways, the government’s policy stand is to turn around the airline and position it as a Pan African carrier that will ensure it is run with profitability and sustainability objectives eventually reducing the airline’s dependency on budgetary support.

4.19 pm: Prof. Njuguna Ndung’u: In the past two years, the insurance sector has grown by Ksh36 billion from a premium of Ksh273 billion. The industry has also attracted investment from key multinational players

4.00 pm: CS Njuguna Ndung'u announces plans to roll out an end-to-end electronic procurement system (e-procurement) which is expected to enhance efficiency and transparency in government procurement, and to ease the cost of doing business with the government.

He explains that the e-procurement system will be implemented in all government agencies, including ministries, departments, and parastatals. It will cover all procurement activities, from the planning of procurement to the award of contracts.

"End-to-end govt e-procurement system to be rolled out by December 2023 in all govt agencies to enhance efficiency and transparency, and ease the cost of doing business with the government," CS Ndung'u assured.

3.57 pm: Prof. Njuguna Ndung’u: To contain the pressure of the US dollar availability in the market as well as exchange rate volatility on a monthly basis, the government entered into an MOU with governments of oil-producing countries under which framework agreements have been signed with petroleum exporting companies for the supply of petroleum products on extended credit period of 180 days

3.56 pm: The CS continued with his speech unfazed, underscoring that the budget was anchored on the global economic state and Ruto's bottom-up economic model. 

"To improve service delivery and support livelihoods and businesses as well as strengthening governance institutions, the Kenyan Kwanza government established a financial inclusion fund (Hustler Fund) to provide access to affordable credit to individuals and SMEs and encourage saving. This is an intervention that will remain at the bottom of the pyramid

"The government has invested a total of Ksh11 billion which has been revolving within the fund. So far, 16.07 million, of which 7.1 million are repeat customers, have accessed the fund. Ksh30.8 billion has been borrowed from the fund," CS Ndung'u explained.

3.45 pm: Prof. Njuguna Ndung’u: The government will expand access to quality social services in health, education and appropriate social safety nets for the vulnerable population. The government will support the youth, women and persons living with disabilities through government-funded empowerment programs that leverage partnerships with private sector organizations.

3.43 pm: MPs allied to the Raila Odinga-led Azimio la Umoja coalition explained that they did not want to participate in the reading of the budget, claiming that it was meant to do more harm than good to Kenyans. Read more here

"We cannot allow a budget that is going to hurt a number of Kenyans. We know that Rome was not built in a day, but we cannot accept this," Likoni MP Mishi Mboko stated in a press briefing outside Parliament.

"Azimio does not believe in this budget. That is why we have walked out. It is not meant for the Kenyan people but for the Kenya Kwanza government. Until we get a budget premised on the Kenyan people, we will not participate," Suna East MP Junet Mohamed echoed.

3.07 pm: Azimio la Umoja Members of Parliament stage a walk-out of the chambers as CS Njuguna Ndung'u begins reading the budget. 

The lawmakers in protest jeered the CS and chanted songs just seconds after introducing the budget as they proceeded to hold a press conference outside. This is as National Assembly Speaker, Moses Wetangula, called the house to order.

2.38 pm: Defence Cabinet Secretary (CS), Aden Duale, dismissed claims that President Ruto's government used the 'hustlers' to propel them to victory in the 2022 general elections.

"There are people stating that we used the ‘hustlers’, but we are not. Every government implements its promises through budgetary provisions. There’s a deliberate attempt by the government to set aside Ksh300 billion in order to achieve the ‘bottom-up’ economic transformation agenda," he said.

2.32 pm: CS Ndung'u arrives at the National Assembly after posing for photos at the Treasury Building and briefly addressing Media Corps, and embarking on a five-minute gradual ride to Parliament.

"We are ready to read the Budget 2023/2024," CS Ndung'u assured as he moved out of his office to the front yard. 

Students from various schools around the country were also allowed to witness the occasion from the National Assembly gallery. 

2.27 pm: A Church Choir performs outside the National Treasury building in Nairobi ahead of budget reading, indicating a new tradition. The melodious voices of the singers dominated the highly tense moment at the National Treasury along Harambee Avenue, Nairobi as CS Ndung'u proceeds to Parliament under heavy security.

CS Njuguna Ndung'u with the famous briefcase while leaving the National Treasury offices for Parliament on June 15, 2023. /CITIZEN TV

2.18 pm: CS Njuguna Ndung'u leaves his office at the National Treasury buildings on his way to Parliament.

2.00 pm: A group of protesters was arrested as they attempted to interrupt the budget reading event. The protesters were picked up by a contingent of police officers who guarding the Treasury House. 

Here's the video courtesy of Citizen TV:

1.30 pm: Treasury CS Njuguna Ndung'u urged Kenyans to brace themselves for short-term sacrifices, adding that the government has a challenging responsibility of financing its projects as well as keeping the debt low.

“We have to have some short-term sacrifices for us to achieve the long-term. We have to sacrifice for the future. This administration started with two extreme problems -- financing constraints for projects and we did not have headroom for debt," CS Ndung'u stated. 

Moreover, Kenya’s debt presently is at Ksh.1.6 trillion and the state intends to borrow Ksh.720.1 billion more in the next financial year.

Key Highlights of 2023/24 Financial Budget

  1. Education receives Ksh630 billion (27.4% of the budget) to promote shared prosperity, by providing accessible & quality education to all Kenyans.
  2. JSS capitation increased to Ksh25.5 billion from Ksh15 billion.
  3. HELB's allocation doubled from Ksh15 billion to Ksh30 billion.
  4. Ksh141 billion allocated to National Government health services, with additional funds allocated to counties.
  5. Ksh250 billion allocated to road construction, prioritizing the completion of stalled and ongoing projects.
  6. Ksh5 billion allocated to the Fertiliser Subsidy Program.
  7. Ksh25 billion allocated to clear arrears for unpaid oil subsidies by previous administration despite promising.
  8. Ksh3 billion allocated to complete the construction of 181 stalled markets that were initiated in 2008.
  9. Ksh4.7 billion allocated to counties as conditional grants to establish 47 aggregation and industrial parks in each county.
  10. An extra Ksh3 billion allocated for 6 EPZ Industrial Parks. This will stimulate job creation, decrease post-harvest losses, enhance processing, marketing, and distribution of agricultural products.
  11. Funds allocated to hire 20,000 teachers and more TVET trainers. 
  12. Funds allocated to operationalize 21 KMTC campuses and hire additional lecturers and staff.
  13. The Hustler Fund receives an additional Ksh10 billion to support entrepreneurial endeavours.
  14. Provided funds to double the number of interns employed by the PSC, from 4,000 to 8,000, each earning a monthly salary of Ksh25,000.
  15. Ksh5 billion allocated to the School Feeding Programme.
  16. Most allocations are strategically aligned with identified value chains to facilitate efficient distribution and utilization of resources. The value chains include;

- Leather

- Livestock (Dairy & Pastoralist economy)

- Apparels and Textiles

- Crops (Edible oils, rice, tea & coffee)

- Blue Economy

- Mining

- Industrial Production (construction&building materials).

Finance Bill 2023

The Finance Bill 2023 was debated at the National Assembly on Wednesday, June 14, and voted upon by over 257 Members of Parliament (MPs). It sailed through following a 176-81 win by pro-government MPs.

The Bill which was sent to MPs by the National Treasury proposed the amendment of several of the country's tax laws, including the introduction of a 1.5 per cent tax to be deducted from the salaries of all Kenyans.

The levy is expected to raise Ksh100 billion per year, which will be used to fund a new affordable housing program, one of the main campaign promises by President Ruto.

Kenya Kwanza and Azimio MPs had for the better part of the day locked horns during the second reading over proposals in the Bill.

Githunguri MP Gathoni Wamuchomba, who is a member of the Kenya Kwanza coalition elected under the UDA Party, told Parliament that she would defy President Ruto and oppose the Bill.

Another rare instance was Nairobi Woman Representative, Esther Passaris, voting in favour of the Bill even though she was actively playing in the Azimio la Umoja team.