Cabinet approves Treasury Single Account for national, county governments

In a pivotal move to enhance public finance management, the Cabinet has approved the implementation of the Treasury Single Account (TSA) for National and county governments.

During a cabinet meeting chaired by President William Ruto at State House Nairobi on Monday, the Cabinet underscored the importance of the TSA in simplifying government banking, creating visibility of government cash resources and increasing transparency in government cash management.

Additionally, the new system will help control expenditure and minimise fragmentation of government accounts in commercial banks.

The structure of the TSA will include the National Exchequer Account, the TSA Sub-Account and the County Revenue Fund.

Speaking on the matter, President Ruto said: “Government funds are banked in commercial bank accounts and individuals keep earning interest. This must stop. All the benefits of public funds must only accrue to the people of Kenya and no one else.”

The Cabinet has also approved the implementation of the Electronic Government Procurement (e-GP) in both the National and county governments.

This move aims to enhance fairness, equity, transparency, competitiveness and cost-effective public procurement, potentially reducing costs by between 10 and 15 per cent, saving the government Ksh.90 billion yearly in public procurement expenditure.

The Cabinet’s decision to implement electronic procurement is rooted in the understanding that digital transformation is essential for transparency, accountability and the establishment of an open marketplace for procurement agencies. 

Electronic procurement will benefit the government, suppliers and the public through transparent information flow on expenditure.

Also given the go-ahead in Cabinet today 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 provide clear guidelines for planning, procurement, management and monitoring PPP projects, aligning with the Bottom-Up Economic Transformation agenda and incorporating environmental and climate change principles. The regulations will now be taken to Parliament for approval.

To fortify Kenya as a regional logistics hub, the Cabinet 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 in Kenya 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. In such cases, Kenya Railways will become a regulator. 

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. The Cabinet recognises the potential of green bonds in mobilising resources for climate-resilient infrastructure, food and water security, and the deployment of green technologies.

The Cabinet also approved the draft Kenya Social Protection Policy 2023 which aims at cushioning the poor and vulnerable from socio-economic challenges. This policy aligns with constitutional mandates and national development goals, emphasising the importance of social protection in poverty alleviation and inclusive growth.

Other agendas approved by Cabinet were the Recognition of Prior Learning Policy, Establishment of the African Legal Support Facility and the Memorandum to Join the Asian Infrastructure Investment Bank.