Kenya’s President William Ruto has announced plans for increased borrowing to sustain government operations after the rejection of a contentious finance bill that aimed to raise taxes.
The bill was withdrawn following widespread protests, including an incident where parliament was set on fire.
President Ruto acknowledged the setback caused by dropping the bill, estimating it has set Kenya’s progress back by two years due to the inability to implement additional taxes amid a significant debt burden.
He emphasized the necessity of borrowing approximately one trillion shillings ($7.6bn) to meet government expenses, marking a 67% increase from previous plans.
To address the financial shortfall, Ruto indicated potential cuts across government sectors, including his office, judiciary, and county governments.
The proposed tax hikes, intended to generate around 350 billion Kenyan shillings, were part of broader efforts to manage Kenya’s substantial debt load, which exceeds $80bn, with a significant portion of revenues allocated to debt servicing.
Despite withdrawing the finance bill, which was intended to support initiatives such as employment for temporary teachers and assistance for agricultural sectors, Ruto acknowledged the concerns of protestors and pledged to reconsider spending allocations.
Criticism of Ruto’s borrowing plans and spending cuts has surfaced, with economist Odhiambo Ramogi cautioning against further debt accumulation, citing potential risks of debt distress.
Social media has also reflected public discontent, questioning the need for increased borrowing amidst unresolved budgetary issues.
Meanwhile, protests persist against the government’s perceived lack of accountability and harsh responses by law enforcement, which have resulted in casualties.
President Ruto defended the police response, noting efforts to address any reported excesses through established mechanisms.
Source-BBC
