In a decisive move to address Kenya's budget crisis, President William Ruto announced on Friday that over 40 state-owned enterprises will be dissolved.

This action follows recent anti-government protests that compelled the administration to retract a contentious finance bill proposing tax hikes.

President Ruto stated, "47 State Corporations with overlapping and duplicative functions will be dissolved, resulting in the elimination of their operational and maintenance costs, and their functions will be integrated into the respective line ministries."

The dissolution of these corporations is a key component of the government's "enhanced austerity measures," designed to bring spending in line with "the budgetary implications of the withdrawal of the Finance Bill, 2024."

The Finance Bill, which had sparked widespread demonstrations, was seen as an unpopular measure that would further burden citizens with additional taxes.

Read More

  1. All macroeconomic indicators point to a positive turnaround - President Ruto
  2. Ruto cancels Adani's Sh334 billion JKIA and KETRACO deals over US indictments
  3. Musalia Mudavadi directs urgent crackdown on unsafe PSVs ahead of festive season

The government's retreat on this bill has necessitated alternative strategies to manage the national budget, leading to these sweeping reforms.

In addition to dissolving state corporations, the president revealed plans to transfer employees from these entities to various ministries and other governmental agencies.

Furthermore, the government will implement a significant reduction in the number of advisors.

"The number of advisors in government shall be reduced by 50 per cent within the public service, with immediate effect," Ruto declared.

In another cost-cutting measure, President Ruto announced the elimination of budget allocations for certain high-profile offices.

"Budget lines providing for the operations of the offices of the First Lady, the spouses of the Deputy President, and the Prime Cabinet Secretary shall be removed," he said.

These steps are part of a broader effort to streamline government operations and reduce public expenditure.

By eliminating redundant functions and reallocating resources more efficiently, the government aims to stabilise the nation's finances and restore public confidence.