By Issa Hussein - Reporter
Kenya, June 30, 2026 - President William Ruto on Tuesday chaired a Cabinet meeting at State House, Nairobi, where ministers approved a raft of policy reforms and development projects aimed at strengthening public accountability, accelerating digital transformation, improving healthcare, expanding infrastructure, and enhancing climate preparedness.
A key resolution of the meeting was the approval of sweeping reforms to address what the government described as decades-long payroll fraud across the public service.
The decision follows an audit of 12 out of 53 State Departments that uncovered suspected payroll irregularities amounting to KSh6.2 billion. The audit revealed unauthorized changes to payroll records, irregular salary payments, weak controls over statutory deductions, and fragmented payroll management systems.
Cabinet directed the Directorate of Criminal Investigations (DCI) to investigate the suspected fraud, verify personnel numbers used in payroll processing, dismantle criminal networks behind the irregularities, recover lost public funds, and ensure those responsible are arrested and prosecuted.
To prevent future losses, the government also ordered a comprehensive payroll reform programme, including an audit of the remaining State Departments, migration of all ministries, departments, agencies and State corporations to an upgraded Integrated Human Resource and Payroll System, improved cybersecurity, data cleansing, and integration with other public financial management systems.
As part of efforts to reduce government expenditure, Cabinet froze the leasing or hiring of additional office space until a nationwide audit of office utilization is completed. It also approved plans to renovate existing public offices to improve efficiency and service delivery.
On digital transformation, Cabinet established a Standing Cabinet Committee on Artificial Intelligence to oversee Kenya's AI policy and promote responsible adoption of the technology. The committee will guide AI innovation, improve public service delivery, boost productivity, create employment opportunities, and ensure appropriate governance safeguards.
Cabinet also adopted the National Business Process Outsourcing (BPO) Policy, positioning Kenya to compete in the rapidly growing global outsourcing industry. The government hopes to capitalize on the country's English-speaking workforce, favorable time zone, and expanding digital infrastructure to create thousands of jobs, particularly for young people.
The meeting further approved several major infrastructure projects worth more than KSh50 billion.
Among them is the KSh26 billion Judicial Performance Improvement Project Phase II, financed by the World Bank, which will support construction of a new Supreme Court complex, a dedicated Court of Appeal building, a consolidated Tribunals complex, and a modern Kenya Judiciary Academy.
Cabinet also approved KSh16.6 billion to complete the Mwache Multipurpose Dam in Kwale County. Once operational, the project is expected to supply 186,000 cubic metres of water daily to Mombasa and Kwale counties, easing water shortages while supporting irrigation.
Additional financing was also approved for the Modogashe-Samatar and Rhamu-Mandera road sections under the 750-kilometre Isiolo-Mandera corridor, a flagship project expected to improve connectivity across Northern Kenya and strengthen regional trade within the Horn of Africa.
With forecasts indicating moderate-to-strong El Niño rains later this year, Cabinet established an Ad Hoc Cabinet Committee on El Niño Preparedness and Response, chaired by Deputy President Kithure Kindiki.
The committee has been tasked with implementing a national contingency plan that includes flood mitigation measures, evacuation planning, drainage clearance, reinforcement of roads and bridges, pre-positioning of emergency supplies, farmer advisories, and establishment of a contingency fund for relief and rehabilitation.
In the health sector, Cabinet approved the Kenya-United States Health Cooperation Framework to sustain collaboration in combating HIV, tuberculosis, malaria and emerging diseases, while integrating more than 13,000 US-supported frontline health workers into Kenya's public healthcare system.
It also approved a KSh4.5 billion partnership with Amsons Group to construct 10 Level Four and Five Mother and Child hospitals in Nairobi, Garissa, Embu, Kisumu, West Pokot, Uasin Gishu, Mombasa, Nakuru, Kwale and Bomet.
Additionally, Cabinet endorsed the second phase of the Kenya-Austria Mother and Child – Our Future Project worth KSh7.8 billion to modernize maternal and neonatal healthcare services at Kenyatta National Hospital.
To support industrial growth, Cabinet approved the KSh5.8 billion Leather Value Chain Development Support Project, which is expected to create up to 120,000 jobs while unlocking an estimated KSh120 billion in economic potential. It also approved the establishment of the Kenya Leather Development Authority to regulate the sector.
The Cabinet further adopted the National Cotton, Textile and Apparels Policy aimed at reviving cotton farming and expanding local textile manufacturing, alongside a revised Micro, Small and Medium Enterprises (MSME) Policy to improve access to financing, markets and employment opportunities.
It also authorized negotiations to modernize welding and mechanical engineering training across 10 Technical and Vocational Education and Training (TVET) institutions to equip young people with industry-relevant skills.
On social protection, Cabinet approved the Kenya Children Policy 2025, the Protection Against Domestic Violence (Amendment) Bill, 2026, and endorsed the report of the Presidential Technical Working Group on Gender-Based Violence and Femicide.
At the international level, Cabinet approved Kenya's bid to host the Secretariat of the Alliance of African Multilateral Financial Institutions in Nairobi and authorized negotiations for a long-term economic partnership with China. It also endorsed the ratification of agreements covering migrant workers, big cat conservation, and the Samoa Partnership Agreement.
In the energy sector, Cabinet approved petroleum cooperation agreements with Rwanda and South Sudan to facilitate the importation of refined petroleum products through the Port of Mombasa, the Kenya Pipeline Company infrastructure, and the Northern Corridor.
The resolutions adopted by Cabinet reflect the government's twin priorities of tightening fiscal discipline and accountability while accelerating investment in critical sectors including digital technology, healthcare, infrastructure, water, manufacturing and social protection to support economic growth and job creation.
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