Recruitment in the public service has been stopped.
Adjustment of salaries and allowances for civil servants has also been halted following a Cabinet meeting Friday.
“As a way of containing expenses, the Ministry of Devolution and Planning was directed to freeze new recruitment, suspend adjustment of salaries and allowances and reclassification and creation of new State Corporations,” a statement from State House said.
The directive comes even as unconfirmed reports indicate that a number of development projects have also been suspended due to lack of funds.
A Kenya Gazette notice released yesterday, however, noted that ministries had not used billions of shillings allocated to them this financial year — months after they were given.
National Treasury cabinet secretary Henry Rotich said in the notice that the ministries had only utilised Sh268 billion by October 31 out of the Sh1.2 trillion allocated to them. County governments on the other hand had used Sh32 billion and still held Sh193 billion of their allocation despite the financial year nearing half-way.
The Cabinet further approved the amended County Allocation of Revenue Act to factor in donor funding requirement for ongoing projects.
During the meeting, the Supplementary Budget I for this financial year was discussed and approved, the presidential strategic communication unit said.
“The focus of the budget is the achievement of a stable macroeconomic environment,” it said.
Under the supplementary budget, the Cabinet approved additional expenditures amounting to Sh115.9 billion.
In the new plan, salaries would take (Sh18 billion), operations and maintenance (Sh8.2 billion), ongoing/new projects (Sh89.7 billion), outstanding gross pay (Sh29.1 billion) and devolved donor funds (Sh16.6 billion).
The Cabinet said funding to cater for the additional expenditure will be sourced from budgetary rationalisation, revenue measures through recovery of pay as you earn as well as domestic borrowing.
Further, the Cabinet directed ministries to ensure all pending bills from the last financial year budget amounting to Sh15.9 billion are settled immediately.