Following widespread protests, Kenya’s Ruto suggests cutting spending

In response to widespread demonstrations, Kenyan President William Ruto withdrew his planned tax hikes, leaving a nearly $2.7 billion budget shortfall that he sought to close on Friday. Ruto also suggested borrowing more money in about equal amounts.

In reaction to widespread, youth-led protests that have precipitated the largest crisis of Ruto’s two-year government, the financial law including the tax increases was withdrawn by the president.

Last week, there were skirmishes between protestors and police that resulted in at least 39 deaths.

In a televised speech, Ruto declared that the government would borrow an additional 169 billion shillings and that he would ask parliament to slash spending by 177 billion shillings ($1.39 billion) for the fiscal year that started this month.

The president finds himself torn between a beleaguered populace bleeding from soaring living expenses and lenders like the International Monetary Fund pressuring him to reduce deficits.

The removal of the bill, according to analysts, is likely to cause Kenya to fall short of its IMF program targets even though the government does not have any outstanding debts that require immediate payment.

According to Ruto, the budget deficit for Kenya’s 2024–2025 fiscal year is now predicted to be 4.6% of GDP, up from an earlier forecast of 3.3%.

The president and deputy president’s wives’ budget lines will be eliminated, he stated, along with the closure of 47 state corporations, a 50% reduction in the number of government advisers, and a halt of public office bearers’ non-essential travel.

“I believe these changes will set out our country on a trajectory towards economic transformation,” Ruto stated.

Along with announcing a forensic assessment of the nation’s debt, which accounts for nearly 70% of GDP, he also promised to make changes to the government soon.

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Ruto conducted a live audio forum on X to interact with youth after the lecture. He was sharply questioned on economic policies, corruption, and the harshness of policy.

Osama Otero, a protesting activist, confronted Ruto regarding reports that state security agents had kidnapped demonstrators. Otero claimed that at three in the morning, he was picked up by plainclothes men, blindfolded, and brought to a residence to be interrogated.

“Mr. President, are we in a terrorist country?” Otero enquired.

After denying police participation in other alleged disappearances, Ruto expressed regret for Otero’s treatment and pledged to pursue his case.

Since Ruto discarded the budget law, there have been ongoing protests, with many participants demanding the resignation of the president. However, low turnout and calls for a reevaluation of tactics from certain activists have been expressed in the wake of Tuesday’s violent and looting demonstrations.

The violence has been attributed by activists to goons that politicians hired to undermine the protest movement. According to the administration, the blame lies with opportunistic criminals.

$1 equals 127.7500 shillings in Kenya.