Africa-Press – Kenya. A performance contract signed by Treasury Cabinet Secretary Njuguna Ndung’u shows that he could lose his job if he fails to maintain the inflation rate.
Inflation is the rate at which prices of goods increase and is used to measure the cost of living within the government’s target range. Ndung’u’s targets are part of President William Ruto’s stringent measures aimed at reducing the cost of living.
President Ruto made it clear that he will not continue working with cabinet secretaries who fail to meet performance targets. Ruto on Wednesday oversaw the signing of the contracts for CSs at State House that will hold them to account on their deliverable.
Part of his task will be to ensure he maintains macroeconomic stability and growth as well as develop and implement a macroeconomic framework that fosters strong economic growth. Ruto has set the economic growth target for Ndung’u at 5.5 per cent in 2023 and an annual inflation target of not more than 7.5 per cent.
“(He will) collaborate with the Central Bank of Kenya to maintain the inflation rate at five per cent +/-2.5 per cent,” reads Ndung’u’s performance contract he signed on Wednesday.
The monthly inflation rate dropped to 7.3 per cent in July 2023 from 7.9 per cent in June 2023. This was the second consecutive drop since June this year and the lowest level in a year since the rate of 7.9 per cent in May 2022.
The monthly rate drop in the cost of living was largely driven by a fall in the price of several basic food items, electricity, and cooking gas. Since taking over power in September last year, Ruto’s Kenya Kwanza administration has been under pressure to bring down the cost of living.
Ndung’u will also face the music should he fail to help the government address the high cost of living. The CS will also be expected to mobilise Sh198.6 billion from external sources and Sh521.5 billion over the next financial year from domestic sources to bridge the budget deficit and fund State programmes.
The mandate of the National Treasury is to formulate, implement and monitor prudent economic and financial policies at national and county levels of government.
“It is my responsibility to provide leadership in designing suitable plans that will contribute to sustainable socio-economic development. It is my undertaking to ensure the National Treasury and Economic Planning has a credible Strategic Plan and Performance Contract that will deliver the desired goals,” reads Ndung’u’s contract in part.
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