Treasury Announces New System to Change How Government Spends Money from July
The National Treasury has unveiled a major financial reform plan that will begin in July. This move is aimed at improving how the government manages and spends public funds.
The plan, known as the Treasury Single Account (TSA), will bring all government money into one central system.
According to Treasury officials, this will help eliminate financial waste, stop corruption, and improve how public services are delivered.
Speaking on Friday in Nairobi, Treasury Principal Secretary Dr. Chris Kiptoo described the new system as “timely and transformative.”
He said the TSA will tighten government financial controls, improve oversight, and ensure taxpayers get value for their money. It is expected to make government services more efficient and transparent.
From July, even how Kenya pays its debts—both local and international—will change. The new TSA system will automatically handle debt payments.
This change will make the payment process faster and more accurate, as it will allow for clear tracking of funds, digital approvals, and proper financial record-keeping.
It’s part of a broader plan to make Kenya’s public debt management more efficient and accountable.
One of the key features being introduced alongside the TSA is a process called Invoice Twinning. This new method will connect invoices from suppliers directly to funds released by the Treasury.
It aims to prevent dishonest practices like cancelling payments without approval or paying some suppliers selectively.
Initially, Invoice Twinning will start with the national government and later be introduced to county governments after the full automation of their payment systems.
Another important reform is the Just-In-Time disbursement model. This system will ensure that government money is released only when there is a real and verified need for payment.
The goal is to avoid unnecessary borrowing, better manage cash flow, and reduce Kenya’s growing debt burden.
Dr. Kiptoo explained that the system will make the entire payment process digital and traceable. All steps in the payment chain will be recorded electronically, from approval to the final payment, allowing for easier tracking and better transparency.
This change is expected to enhance accuracy and make it easier to reconcile financial data.
The government will also gain better visibility of how much money State-Owned Enterprises (SOEs) have in their accounts at any given time.
According to the PS, this will help the Treasury monitor these funds more closely, encourage responsible spending, and help leaders make informed financial decisions.
“This reform will allow the Treasury to access up-to-date information on cash held by SOEs, leading to more financial discipline and better planning,” Dr. Kiptoo said.
To support the TSA reforms, the National Treasury is working closely with the Central Bank of Kenya (CBK), which is currently upgrading its banking system—T24 Core Banking System—to a more advanced version, called Version R23. This upgrade will help the Central Bank handle the new digital systems more effectively.
Dr. Kiptoo made the announcement during a high-level meeting at the Treasury headquarters. The meeting brought together top officials from institutions responsible for managing public funds and providing oversight.
The National Treasury says the goal of the TSA is to bring Kenya in line with global financial practices.
TSA is a system already used in many countries to improve how governments manage their budgets and spending.
By adopting this system, Kenya hopes to reduce financial mismanagement and deliver better services to its citizens.
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