Kenyan President William Ruto on Friday proposed a combination of spending cuts and additional borrowing to fill a nearly $2.7 billion budget gap caused by the withdrawal of planned tax hikes amidst nationwide protests.
Ruto scrapped the finance bill containing the tax increases in response to mass, youth-led demonstrations, marking the most significant crisis of his two-year presidency. At least 39 people were killed in clashes with police, and some demonstrators briefly stormed parliament last week.
In a televised address, Ruto announced that he would ask parliament for spending cuts totaling 177 billion shillings ($1.39 billion) for the fiscal year beginning this month and would increase borrowing by about 169 billion shillings.
The president faces the demands of lenders like the International Monetary Fund (IMF) to reduce deficits, while a struggling population grapples with rising living costs. Analysts suggest the withdrawal of the finance bill could result in Kenya missing targets in its IMF programme, although the government does not have urgent debt obligations.
Kenya’s budget deficit is now projected at 4.6% of GDP for the 2024/25 financial year, up from an earlier estimate of 3.3%, Ruto said. Austerity measures will include the dissolution of 47 state corporations, a 50% reduction in government advisers, suspension of non-essential travel by public officials, and removal of budget lines for the president and deputy president’s spouses.
“I believe these changes will set our country on a trajectory towards economic transformation,” Ruto stated.
He also announced a forensic audit of the country’s debt, which exceeds 70% of GDP, and hinted at upcoming changes to the government.
Following his speech, Ruto hosted a live audio forum on X to engage with young people, where he faced sharp questioning about police brutality, corruption, and economic policy. Activist Osama Otero questioned Ruto about alleged abductions of protesters by state security agents, recounting his own experience of being taken at 3 a.m., blindfolded, and interrogated.
Ruto, who had previously denied police involvement in reported disappearances, apologized for Otero’s treatment and promised to address his case.
Protests have continued since Ruto scrapped the finance bill, with many demonstrators calling for his resignation. However, turnout has decreased, and some activists are reconsidering their strategy after Tuesday’s demonstrations were marred by violence and looting. Activists blame the violence on thugs hired by politicians to discredit the protest movement, while the government attributes it to opportunistic criminals.
