Kenya: President Ruto announces borrowing plans, austerity measures as nationwide protests continue

In response to the nationwide protest that gripped the country, Kenyan President William Ruto has proposed spending cuts and additional borrowing in roughly equal measure to cover a nearly $2.7 billion budget deficit caused by his withdrawal of planned tax hikes.

Ruto earlier scrapped the finance bill containing the tax increases in response to mass, youth-led demonstrations that have created the biggest crisis of his two-year-old presidency.

In a televised address, President Ruto announced plans to request parliament to implement spending cuts totaling 177 billion shillings ($1.39 billion) for the current fiscal year, which began this month.

Additionally, the government intends to increase borrowing by approximately 169 billion shillings.

President Ruto announced austerity measures, including dissolving state corporations, cutting advisers, suspending non-essential travel, and removing budget lines for the first and second ladies’ expenses.

The move comes as Ruto faces pressure from lenders like the International Monetary Fund to reduce deficits, while also addressing the struggles of a population grappling with escalating living costs.

He assured that the changes will set Kenya on a trajectory towards economic transformation.

Despite President Ruto’s decision to scrap the finance bill, protests have persisted, with many demonstrators demanding his resignation.

However, the turnout has decreased, prompting some activists to reconsider their approach in light of the violence and looting that marred Tuesday’s demonstrations.