Kenyan President William Ruto has announced a 177 billion budget cut to seal the budget hole left after the withdrawal of the finance bill. This comes after protests led to the cancellation of contentious tax hikes, which resulted in the deaths of 39 people.
The country erupted into chaos when peaceful demonstrations against high tax rises turned violent. Police fired at crowds that stormed parliament.
Mostly led by young Kenyans, the protests reflected widespread anger over an annual finance bill. Ruto had to scrap the bill, warning of a huge funding gap.
“We will be proposing to the National Assembly a budget cut of not the entire 346, but a budget cut of 177 billion and borrowing the difference (around 169 billion shillings),” said Ruto on Friday, July 5.
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Public debt amounts to some 10 trillion shillings ($78 billion), around 70 percent of Kenya’s GDP.
The decision to borrow would result in the fiscal deficit rising “from 3.3 percent to 4.6 percent”, Ruto said, but would pay for some services.
These would include the hiring of secondary school teachers and medical interns, as well as continuing to fund a milk stabilisation and fertiliser programme that protects farmers.
Ruto announced several belt-tightening measures including the absorption of 47 state-run organisations and companies with other departments.
The office of the first lady and that of the deputy president’s spouse will cease to exist and the number of government advisors slashed by half.
“All non-essential travel by state and public officers is hereby suspended,” he added.
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