DP Ruto puts Uhuru in a tight spot with populist budget adjustments

Deputy President William Ruto’s camp has proposed populist budgetary changes to benefit counties, small businesses and teachers that will upset President Kenyatta’s budget in his final year in office. 

The camp seeks to slash allocations to the Office of the President and the Interior and Defence ministries to raise Sh200 billion for the critical voter constituencies, setting the stage for a showdown in the House. 

They have filed amendments to the report of the Budget and Appropriations committee following scrutiny of the Budget Policy Statement that details government spending for 2022/23.

With this being the last budget of Mr Kenyatta’s reign, the proposed amendments put his camp in a catch-22 situation, as opposing them isn’t politically prudent, yet the alterations would derail government plans. 

MPs allied to the DP want Sh50 billion slashed from the Office of the President and the Interior and Defence ministries to create what is similar to their proposed ‘Hustler’ fund, a key tenet of the DP’s election campaign. They also want counties allocated Sh495 billion, up from Sh370 billion, in what they say will represent 35 per cent of the last audited and approved revenues, which were Sh1.413 trillion.

For the DP, the proposed Hustler Fund—which would be domiciled in the Ministry of Industrialisation—is a huge campaign bait and could excite supporters he has promised government assistance to run their businesses.

“That Sh50 billion be provided under the Ministry of Industrialisation, Trade and Enterprise Development to support credit finance for micro, small and medium enterprises adversely affected by the Covid-19 pandemic. This will be financed by reallocations from the recurrent expenditures of the Office of the President, Ministry of Interior and Coordination of National Government and the Ministry of Defence,” Kikuyu MP Kimani Ichung’wah says in the proposals.

Uplifting small businesses

The MP was the Budget committee chairman until 2020 when he was replaced by Kieni’s Kanini Kega in a purge by the President of DP Ruto allies.

The proposed Sh50 billion Fund would put DP Ruto’s brigade at a vantage point in their campaigns, having been basing their manifesto on uplifting small businesses. If adopted by the House, the proposal will reverse decisions by the Budget committee, which, in its report, had allocated additional Sh13.2 billion to Defence, Sh3.2 billion to the National Intelligence Service (NIS) and Sh6.5 billion to Interior.

Of the extra amount the committee recommended to the agencies, a huge chunk went into recurrent expenditures, including Sh5.8 billion to Interior for enhancement of police insurance, Sh3.2 billion to NIS for equipment modernisation, and Sh8.6 billion to Defence for personnel emoluments and equipment maintenance. They rank among ministries with huge budgets at Sh170.77 billion (Defence) and Sh149.7 billion (Interior).

But the MPs are going after the money, and sending it where they would have an edge in campaigns. Mr Ichung’wah also proposes the equitable share to counties be increased from the Sh370 billion held by the BPS and the committee, to Sh495 billion, taking out the money from ministries with devolved functions.

“Deletion of the amount ‘Sh370 billion’ in paragraph 79(v) on page 26 of the report and substituting therefore the amount ‘Sh495 billion’ representing 35 per cent of the last audited and approved revenues worth Sh1.413 trillion. This will be financed by reallocations from the ministries, departments and agencies undertaking devolved functions,” he says.

The move would enable the Ruto camp to gain an edge over the competition, as they would boast of having channelled more resources to the counties. 

The strategy seems to bait their rivals, who had promised similar allocations in the stalled constitutional amendments under the Building Bridges Initiative.

Nominated MP Wilson Sossion, another Ruto ally, wants reallocations to the Teachers Service Commission (TSC), to ensure the government fully finances the planned training requirements for teachers. This is further to the Sh2 billion allocation to TSC by the Treasury in the BPS to finance the Teacher Professional Development programme.

Reallocation of resources

When the programme was launched last year, teachers were asked to pay Sh6,000 for each of the six modules they are to cover annually over five years. This means without the government bearing the cost of the training, a teacher would have to pay Sh180,000 for the entire period.

The proposal seeks to ensure that even with the Sh2 billion, no teacher should be asked to top up the training costs.

“These expenses will be met through the reallocation of the resources allocated under the Teachers Service Commission. Furthermore, all other training programmes initiated by the TSC should be financed by the commission in line with international Human Resource practice,” Mr Sossion argues.

The TSC has employed 341,760 teachers. About 150,000 others work in private schools and many others are unemployed. It had planned to roll out the programme in 2018, but it was derailed following a court case filed by the Knut, then headed by Mr Sossion, demanding that TSC pay for the training. 

The new union leadership, which assumed office in June last year, withdrew the case.

If adopted, the push would offer Ruto’s camp another headway in the vote-rich teachers’ community. Mr Ichung’wah’s proposal to have Office of the President’s budget also cut to contribute in the Sh50 billion to be allocated to SMEs also means the office’s budget, currently at Sh8.1 billion, could suffer further cuts. 

Overall, Mr Ichung’wah wants the national government budget capped at Sh1.504 trillion, down from the proposed Sh1.629 trillion and joins in calls not to expand Kenya’s public debt ceiling.

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