The government has moved to safeguard the absorption of Junior Secondary School (JSS) teachers and medical interns on permanent terms, despite their hiring having faced uncertainty following the collapse of the Finance Bill 2024.
Their hiring will be financed through budget cuts from other government agencies’ vote heads in the first supplementary budget for the current financial year.
The mini budget will, however, see elected MPs from the 290 constituencies forgo the Sh15 billion, meant for the enhancement of the National Government-Constituency Development Fund (NG-CDF) , to finance electricity connectivity in their areas.
This follows a meeting between Treasury mandarins led by Cabinet Secretary Njuguna Ndung’u and the National Assembly Budget and Appropriations Committee (BAC).
Details before Parliament show that the Sh18.9 billion allocated to the Teachers Service Commission (TSC) for JSS teachers’ hiring will not be altered despite the revenue hitch.
The same is with the Sh3.7 billion allocated to the State Department of Medical Services for the absorption of medical interns and the Sh1.8 billion allocated to State Department for Basic Education for school feeding programme for public schools.
“The government will go on with the hiring of the JSS teachers and medical interns in the current financial year as initially planned. This will be financed by budget cuts from other votes in the supplementary budget,” a member of the budget committee, who did not want to go on record, said.
The Supplementary Budget I for the 2024/25 financial year is expected in the National Assembly once the MPs resume their sittings on July 23, 2024.
The legislators went on recess on June 27, two days after passing the Finance Bill, 2024 that saw protesting Kenyans storm Parliament building to express their outrage as their representatives scampered for safety.
The collapse of the Finance Bill, 2024 came after President William Ruto rejected it in its entirety in a memorandum to the National Assembly, following deadly countrywide protests that saw Kenyans accuse the government of imposing punitive taxes.
The rejection created a financing gap as the Bill was to help the government collect Sh346 billion on top of the Sh2.95 trillion in ordinary revenue and Appropriation in Aid to finance the Sh3.9 trillion budget for the current financial year.
The Bill’s collapse heralded difficult times for the government as it grapples with the practicability of financing expenditures that far outweigh the anticipated revenue.
Nonetheless, the government’s escape route is going back to the base- which is the Sh3.7 trillion figure- the operative budget for the 2023/24 financial year that had Sh3 trillion in ordinary revenues and borrowings of Sh718 billion.
Notwithstanding that in the 2023/24 fiscal period, the government missed the projected revenue target by Sh300 billion.
With the government going back to the base, it was feared that the hiring of JSS teachers and medical interns would not be prioritised.
And to fill in the finance gap, the government was left with three options- to borrow more than projected in the budget and the Medium Term Debt Management Strategy, increase taxes outside the projections in the National Tax Policy and the budget or slash the budget.
On Friday, President Ruto announced that the government will cut the year’s budget by Sh177 billion, with the balance that was to be realised by the Finance Bill covered through increased borrowing from the local and foreign market.
The government is also hitting on all the cylinders to shore up revenue, notably with increased taxation following the introduction of duty on imported crude palm oil.
Already Prof Ndung’u has issued guidelines to all government ministries, departments and agencies of the impending revision of the budget.
“Accounting officers are required to submit the revised estimates to the National Treasury by July 8,” says Prof Ndung’u in a circular dated July 5.