Kenyan President William Ruto has announced a budget cut of 177 billion to address the deficit caused by the withdrawal of the finance bill.
This decision follows protests that led to the cancellation of controversial tax increases, an event marred by the deaths of 39 individuals.
The country faced turmoil as peaceful demonstrations against steep tax hikes escalated into violence, prompting police intervention against crowds that breached parliament.
Primarily driven by young Kenyans, the protests underscored widespread discontent over an annual finance bill, forcing Ruto to eliminate it and highlight concerns over a significant funding shortfall.
“On Friday, July 5, Ruto announced, ‘We will propose a budget cut of 177 billion to the National Assembly, borrowing the remaining difference of approximately 169 billion shillings.'”
Kenya’s public debt stands at approximately 10 trillion shillings ($78 billion), equivalent to around 70 percent of its GDP. Ruto stated that the decision to borrow would increase the fiscal deficit from 3.3 percent to 4.6 percent.
However, he emphasised that the borrowed funds would support essential services, including hiring secondary school teachers and medical interns.
Additionally, the funds would continue to finance programs such as milk stabilisation and fertiliser subsidies aimed at supporting farmers.
Ruto introduced several austerity measures, such as consolidating 47 state-run organizations and companies into other departments.
Additionally, he announced the elimination of the offices of the First Lady and the Deputy President’s spouse, along with halving the number of government advisors.
He emphasised, “All non-essential travel by state and public officers is suspended.”
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