Budget 2019: Gov’t to buy cars locally, introduce fuel cards to cut costs

Treasury CS Henry Rotich has announced a raft of cost-cutting measures that he expects will reduce public spending and consequently the budget deficit.

With effect from July 1, 2019, all government ministries, agencies and public entities will be required to procure vehicles and motorcycles locally.

“With effect from July 1st, 2019 all ministries, departments, agencies and public entities are required to give exclusive preference in procurement of motor vehicles and motorcycles from firms that have assembly plants in Kenya,” Rotich said during the reading of the 2019/2020 budget statement on Thursday.

The Treasury CS further noted that the move intends to promote local manufacturing as well as create employment opportunities.

To limit expenditure on domestic and foreign travel by public officers, the government is considering the use of an electronic card system.

Government employees will be issued with a pre-loaded card with subsistence allowance for official duties only.

A new government transport policy is also expected to be introduced to include the use of fuel cards across all levels of government to improve efficiency and cut costs.

CS Rotich also announced that from July 1, 2019 all procurement of office accommodation by the government will be standardised to ensure uniform cost of leases.

“The government has been leasing office space at higher than market rates. All existing contracts will be renegotiated to ensure a standard rate,” said the Treasury CS.

To contain the ballooning wage bill which consumes the bulk of government expenditure, CS Rotich said recruitment of new public servants in the coming financial year will be restricted to key technical staff, security personnel and health workers.

Pension recipients will also be on the government radar.

“The pension budget has increased by over threefold in the last 10 years from Ksh.25 billion in 2008/2009 financial year to Ksh.86 billion in the current financial year,” said Rotich.

He said a payroll cleansing exercise for pensioners is due to be completed with a view of cutting cost.

“We will continue to take bold actions to contain our expenditures further in the next financial in order to reduce the deficit,” said Rotich.

In the Ksh.3.02 trillion 2019/2020 budget, the government is expected to plug a budget deficit of Ksh.607.8 billion through internal and external borrowing.