How Ruto legacy projects have gone up in flames after Finance Bill flop

The rejection of Finance Bill 2024 after street protests lasting over a week by Generation Z has not only left President William Ruto with a bitter taste in the mouth but has also dealt a crippling blow to his legacy projects and 2027 election plans.

The impugned budget, the biggest since the country's independence, where Sh4 trillion was to be expended, presented the best opportunity for President Ruto to allocate funds to projects that would have solidified his presidency and endeared him to the electorate long after he had left State House.

But all this has now gone up in huge plumes of gunfire and tyre smoke, leaving the acrid smell left behind by the chocking tear gas canister fires after protesting youths.

The President, just like his predecessors, introduced some tax measures in his second year in office in a bid to fund projects he had promised during the campaigns in the hope that when he seeks reelection in 2027, Kenyans will identify with his legacy projects.

But the president has been forced to withdraw the Finance bill, a move that will see the government slash planned expenditure by Sh346 billion. The biggest casualty will be Ruto’s legacy projects which  will be adversely affected.

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Already, the head of State has referred the County Allocation and Revenue Bill, which was based on expected revenues from the rejected Finance Bill, back to Parliament for reduction accordingly.

“ ...I have directed the National Treasury to immediately submit to Parliament amendments to the Division of Revenue Act 2024 to reflect the reduced revenues occasioned by the rejected Finance Bill,” the President said in a letter to National Assembly Moses Wetang'ula on June 19 this year.

Some of the Ruto’s flagship projects that will be adversely affected include the coffee waiver of Sh6.8 billion which farmers were waiting for eagerly.

His pet project, fertilizer subsidy program that expected to revolutionalise agriculture, create jobs and enhance food security and was poised to be allocated Sh5 billion has been hit hard.

The Junior Secondary Schools (JSS) whose confirmation and hiring of 46,000 teachers will be cut by Sh18.9 billion, while social security project cash transfers to the elderly which was get Sh5.5 billion is also a big looser.

At the same time 290 members of parliament will now have to be creative because the Sh30 million which was to be added each  Constituency Development fund (NG-CDF) will not be forthcoming, meaning a cumulative loss  of Sh15 billion.

In a letter to the National Assembly on June 19, Finance Cabinet Secretary Prof Njuguna Ndungu warned that the ongoing road projects would see a reduction of a  whooping Sh15.1 billion.

At the same time Technical and Vocational Education and Training (TVETS) and Technical Training Institutions(TTIs) would have to part with Sh800 million while infrastructure for schools and School Feeding progamme Sh1.6 billion and Sh1.8 billion respectively.

Medical interns who would have seen 1,200 of them employed, after they recently negotiated for a package following a protracted two-month strike will lose  Sh3.7 billion of their negotiated perks.   

Allocation for medical equipment service has been slashed  by Sh1 billion, and National Government Affirmative Action (NGAAF) has been reduced by  Sh1.5 billion.

Other key losers in Prof Ndung’u’s list are the last mile connectivity (constituencies program) that would be forced to contend with Sh14.5 billion, fertilizer subsidy Sh5 billion, sugar reforms of Sh2.7 billion and street lighting Sh4.7 billion.

Further, 45 offices within the Executive, Judiciary and Parliament will be hit by budget cuts.

The Presidency will  lose Sh451 million, State House  Sh500 million  for operations while the Interior ministry face a Sh2 billion cut of  its security operations while  the Defense ministry will have to do without Sh7.7 billion for security operations and modernization.

The upshot of the rejection of Finance Bill 2024 is that while the Ruto's administration decided to appease the angry citizens and did away with the bill.

However  Kenyans will still blame the administration due to unfulfilled election  promises while MPs will find it rough with their electorate because their NGCDF  which is their campaign war chest will not be enough for bursaries and the construction of classes and other social amenities.

The coffee farmers who were to benefit from the waiver of debts were also expecting an additional Sh1.4 billion to settle debts for New KPCU milling and warehouse facilities and Sh560 million for the construction of eco-pulplers and emerging coffee growing areas will still demand answers from the President on the whereabouts of the monies.

Ruto’s vision to transition the National Health Insurance Fund (NHIF) to Social Health Insurance Fund will also be in limbo as the health will also be affected by the budget cuts. This is in addition to the stalemate of the medical equipment service that has been the thorn in the flesh between the county governments and the national government.

The budget cuts also mean that the push and pull between the Council of Governors (COG) and the government will continue  after the Senate and Senate and National Assembly last month reached an agreement on the division of revenue share.

The Counties were to be allocated Sh400.1 billion of shareable revenue in the financial year 2024/2025 which was Sh15 billion higher than the amount allocated in the current financial year where counties were allocated Sh385 billion.

National Assembly Majority Leader Kimani Ichungwa admitted that some of the major projects such the construction of ICT hubs in every wards will be abandoned.

“If we passed the amended Finance Bill we would have lost between Sh60 billion to Sh80 billion but after the rejection of the bill, we shall have to cut all the projects that were to be financed with the Sh346 billion,” Ichungwa said.

The Opposition and analysts believe the government could still realize their agenda as espoused in its manifesto through the fight against corruption and cutting unreasonable spending.

Minorty leader in the national Assembly, Opiyo Wandayi said," The government must formulate a budget they can be able to finance and come up with projects that will spur economic growth, they must reduce budget deficits and finance budgets from taxes. The problem has been putting money everywhere without results."

Narc Kenya leader Martha Karua blamed the Ruto's government  for mismanaging public resources and appointing unqualified individuals to execute  crucial responsibilities that have further increased the suffering of Kenyans.

 "The regime is busy making a budget for itself in violation of article 203 (a) and article 43 of the constitution of Kenya 2010. Budget making is about making the right choices that can lead to a much safer Kenya based on a true reference and respect for the people; it is not about funding the executive."

On his part Jubilee Secretary General Jeremiah Kioni believes the corruption in the Kenya Kwanza government and extravagance has been the cause of upheaval in the country saying the government has no excuse for initiation of development.

“ Corruption to insatiable spending has been the main problem in the Kenya Kwanza administration, they must reduce that and concentrate on development,” Kioni said.

Governance and political expert Gitile Naituli claimed the Finance bill was seeking to increase allocations to various departments by Sh23.6 billion while noting that the allocation to the President's office and Deputy President's office had been increased by Sh 1.2 billion and Sh681 million respectively which he needed if readdressed, the State can still commission development projects.

“Have you ever heard of conspicuous consumption? The KK government is a very successful pilot project on conspicuous consumption. A comprehensive analysis of the entire expenditure would blow our minds. It has done so to GenZ. Constitutional gerrymandering and economic recovery are mutually exclusive terms.

A political economy that is anchored on overfunding corruption and the useless sectors while shrinking the productive ones can only lead to misery and anarchy. The useless thirsty parasite of corruption and conspicuous consumption will eventually kill the host.,” he said.

He added that two years down the line, the country was being fed with a ‘monogamous diet of rhetorical gruel claiming no new projects, not even renovation or upgrade of the existing ones’

“We are only being lectured on the importance of paying taxes, yet there’s no corresponding development programmes and projects. The problem with our economy is not that of revenue collection, rather it’s one of expenditures,” he said.

 Some of the promises in the Kenya Kwanza manifesto include; Investment of Sh250 billion in 5 years to boost Agriculture and food security, provision of Sh50b annually to provide MSMEs with reliable access to credit, Employment of 116,000 teachers within two financial years, construction of 250,000 affordable houses every year, construction of a 100,000-kilometer fibre optic network, doubling of  money allocated for school feeding programme.