The goal is to strengthen the banking sector's resilience and increasebanks' capacity to finance large-scale projects, Treasury Cabinet Secretary Njuguna Ndung'u says.
He criticized the government's plan to replace the NHIF with the new Social Health Insurance Fund (SHIF), with Kenyans being urged to register with the latter.
Through the CoG Chairperson Anne Waiguru who led the governors in a meeting in Nairobi, the county governors regretted the move, terming it as one that undermines the spirit of devolution.
The reduction has particularly impacted the 46,000 JSS intern teachers who have been eagerly awaiting their confirmation since 2023.
Governor Abdulswamad Nassir of Mombasa emphasised the project's importance, citing the city's strategic position as a growing regional logistics hub.
Kenya has nearly 39 licenced banks, and more than half of them may be affected by the CBK's new measure. Out of these, only 9 banks control the lion's share at 75.1%
The government is struggling to cut down expenditures, including its ballooning wage bill, amid austerity measures introduced by President William Ruto.
Safaricom had argued that raising the tax on mobile money transfers would undermine financial inclusion efforts and could potentially drive users towards black market money transfer services, thereby harming tax collection efforts.
Ndung’u said the government plans to also focus on strengthening the infrastructure for arts and culture and supporting cultural production and the creative economy.
He noted that through strong economic fundamentals, together with renewed investor confidence, a total of 848,200 new jobs were generated in the economy compared to 816,600 new jobs generated in 2022.
The amount was initially Sh12.2 billion when the budget was passed in June 2023 but the amount was increased through a subsequent supplementary budget that added Sh4 billion.
This marks the third consecutive year that the health sector has faced budget cuts.
The new borrowing target represents an increase from the previously stated Sh514.7 billion deficit that Prof Ndung’u had presented to the National Assembly.
The Treasury PS said that the debt burden has left the country with no choice but to increase taxes to cushion the country from debt stress.
To address this, the Committee says financing of the gap will predominantly shift towards foreign borrowing.
The reinstatement of the Sh2 billion budget for the programme is a big relief to learners from regions hit by drought and famine, as the lack of basic needs such as food and water keeps them away from school.
Treasury aims to allocate Sh33.3 billion to HELB, which is Sh3.7 billion from the initial amount.
The proposal follows a summons for Nairobi Governor Johnson Sakaja to appear before the Senate within 14 days to address audit queries.
The President said corrupt officials were accustomed to inflating the budget to benefit themselves rather than the local citizens who were paying taxes to fund government projects.
Treasury Cabinet Secretary Njuguna Ndung'u argues for a more equitable sharing of tax responsibilities among citizens.