Muthomi Ireri
Kenya’s economic hub faces escalating debt woes following protests that led to the rejection of a finance bill crucial for revenue generation, warned President William Ruto, who anticipates significant repercussions.
Amid mounting calls for his resignation, Ruto announced plans to halve a $2.7 billion budget deficit through cuts and additional borrowing, though specifics were not provided. Acknowledging public outrage over bureaucracy and lavish lifestyles of officials, Ruto pledged funding reductions in his office and for other ceremonial roles, and proposed closing nearly 50 redundant state enterprises.
Ruto’s administration, grappling with Kenya’s $80 billion public debt representing 70% of GDP, aims to manage repayment without further burdening citizens or stalling economic growth, which saw a 5.6% increase in 2023.
Economists like Mbui Wagacha advocate for a professional budget management body akin to the U.S. Office of Management and Budget, citing parliamentary oversight gaps in Kenya. Wagacha warns against excessive borrowing, proposing diplomatic efforts to attract investment and negotiate debt restructuring.
Ken Gichinga echoes concerns over increased borrowing impacting business recovery post-COVID and Ukraine’s war. He advocates for incentivizing job creation through lower taxes and interest rates, emphasizing a need for a jobs-focused economic strategy.
President Ruto urges Kenya to enhance revenue rather than rely on borrowing, yet public resistance to tax hikes, evident in recent protests, complicates fiscal policy. Amidst these challenges, Ruto emphasizes his efforts to navigate Kenya away from a debt crisis while preparing for the tough road ahead.
Dj Vnyash
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