CBK's taste for fine whisky flies in face of austerity talk

A couple admires a bottle of wine in a supermarket. [Getty Images]

President William Ruto’s order requiring senior officials to cut public spending and save money his government needs to pursue its development agenda appears to have fallen on deaf ears as hundreds of millions of shillings are still being splashed on luxury and unnecessary services by some State agencies. 

In a move that has raised eyebrows, the Central Bank of Kenya (CBK) has issued a tender for the supply and delivery of assorted premium wines and spirits for the Kenya School of Monetary Studies (KSMS). 

The ongoing tender, with the reference number CBK/161/2023-2024, was published on the CBK website on May 30, 2024. 

The tender, which is reserved for the AGPO (Access to Government Procurement Opportunities) and PWD (Persons with Disabilities) category, is for one year. 

This development comes despite President William Ruto’s directive for austerity measures last year and recently across the government and State corporations, aimed at reducing wasteful expenditure.

The tender for luxury items such as wines and spirits by CBK has sparked concerns over the bank’s commitment to the Ruto administration’s cost-cutting efforts. 

The Kenya School of Monetary Studies is a training institution under the central bank’s purview. 

Critics have questioned the necessity of such lavish purchases, especially in light of the current economic climate and the government’s push for more prudent spending. 

The tender process is currently ongoing, with a pre-bid meeting held on May 13th, 2024, where prospective bidders sought clarifications.

The bank has since issued an addendum to the tender, revising the technical requirements for the second stage of the evaluation process, according to the internal documents seen by The Standard. 

President Ruto on Friday last week proposed spending cuts and additional borrowing in equal measure to fill a new budget hole caused by his withdrawal of planned tax hikes in the face of nationwide protests. 

Ruto scrapped the Finance Bill containing the tax increases in response to mass, youth-led demonstrations that have created the biggest crisis of his two-year-old presidency. 

Austerity measures will include the dissolution of 47 State corporations, a 50 per cent reduction in the number of government advisers, the suspension of non-essential travel by public office bearers and the removal of budget allocations for the President and Deputy President’s spouses. 

An earlier spot check by The Standard shows several government agencies controlling multibillion-shilling State contracts and some ailing and cash-strapped and dependent on State bailouts, however, continue to defy Ruto’s order to slash non-essential budgets to curb wasteful spending.

This comes at a time when the Ruto administration has asked Kenyans to brace to swallow the bitter pill of austerity. 

Experts have recently warned the continued lavish spending by top key officials and State agencies which flies in the face of the austerity drive is likely to stoke social tension at a time the Ruto administration is facing pressure to bring down the cost of living. 

For instance, the Privatisation Authority of Kenya (PAK) recently faced scrutiny for spending millions of shillings on a rebranding campaign even as the National Treasury enforces austerity measures. 

A report detailing contracts reveals that PAK spent Sh9.995 million on consultancy services for rebranding awarded to Artful Eyes Productions Ltd in March. 

The six-month contract is set to expire in September. 

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