Time is up for loss-making parastatals – President Ruto

President William Ruto has said parastatals that make profits must stop wasteful expenditure, including financing largesse in their parent ministries and unnecessary procurement.

Ruto directed that the government, including State corporations, must live within its means and expenditures must never exceed revenues collected.

The Head of State was speaking on Tuesday to chairpersons and CEOs of State corporations at the State House.

President Ruto said some agencies have been making losses for years and have become a drain on the exchequer.

"Now that the economy has stabilised, we cannot continue accumulating debt. Borrowing will only lead us down the cliff," he said.

"The money some parastatals make does not belong to their boards or management. It belongs to the people of Kenya as returns on investment."

Ruto regretted that the abuse of public resources has become so rampant that it is inhibiting service delivery.

He directed that from now on, government budgets and expenditures will be subjected to rigorous scrutiny.

“We will leverage technology to check on improper payments and maximise on the value for money,” he asserted.

The move to reduce expenditure, he explained, will stop unnecessary borrowing and accelerate the government’s transformation agenda.

“We must get it right. We must do what is right. This is the time,” he added.

He said that the government will engage in an elaborate consolidation process that will stop the duplicity of functions, wastage and winding up of loss-making institutions.

The President cited cases of parastatals that have duplicated and overlapping roles.

“It is illogical. We have to shut down some of these loss-making parastatals. We must end excess capacity," he said.

Consequently, Ruto said Kenya must begin living within its means and stop the habit of running huge budget deficits.

"In three years, we must run a balanced budget. It won't be easy but we must do it," Ruto said.

The President also directed the CEOs to reduce their recurrent budgets by 30 per cent.

Additionally, commercial State corporations must from now on remit 80 per cent of their profits after tax to the National Treasury.

"We will give you directions on what to do with the remaining 20 per cent," he said.

Regulatory institutions were ordered to remit 90 per cent of their surplus funds to the Treasury.

“There will be no exceptions. Everybody must comply,” President Ruto directed.