The government will now have a view of all available cash balances at any given time across all Ministries, State Organs, State Departments, Agencies and other government entities, following Cabinet approval of Treasury Single Account (TSA) system.
- The policy shift seeks to strengthen expenditure controls, forecasting, and budgeting also reducing need for government borrowing.
- The structure of the TSA will include the National Exchequer Account, the TSA Sub-Account and the County Revenue Fund.
- It will will also help control expenditure and minimise fragmentation of government accounts in commercial banks.
“Government funds are banked in commercial bank accounts and individuals keep earning interest. This must stop,” President Ruto said while making the announcement.
“The policy directive builds on the automation of government payment through the Intergrated Financial Management Information System and Central Bank of Kenya Internet Banking system, to adopt a one government approach,” the Cabinet said in a statement.
The Cabinet has also approved the implementation of the Electronic Government Procurement (e-GP) in both the National and county governments,
- Electronic procurement will benefit the government, suppliers and the public through transparent information flow on expenditure.
- It includes the digitisation and automation of public procurement and asset disposal processes.
- The Cabinet estimates that the system will reduce costs by between 10 and 15 per cent, saving the government KSh90 billion yearly in public procurement expenditure.
Also given the go-ahead in Cabinet are Public-Private Partnership Regulations whose aim is to improve the structure and performance of PPP projects. This move is crucial in creating a stable environment for public and private entities involved in PPPs and fostering a robust investment environment.
The regulations will now be taken to Parliament for approval.
The Cabinet also approved the Railway Amendment Bill 2024 that aims at initiating new ways of running railways and separating the business of freight, commuter and land development.
- Kenya Railways is a big landowner and most of the land is lying idle.
- This will be used to develop railway cities as is happening in Nairobi and will be extended to other major towns.
- The Bill proposes that the private sector, investors and even county governments run the railway cities.
To address climate change challenges, the Cabinet approved Kenya’s Sovereign Green Bond Framework which seeks to secure alternative funding options for green and resilient investments amid rising climate change costs.
The Green Bond Framework is a financial instrument to raise funds for climate action, promoting a nexus between climate initiatives and economic development.
President Ruto Approves Privatisation of Loss-Making Government Entities – Kenyan Wallstreet
