Kenya: Ruto Suggests Budget Reductions Following Countrywide Demonstrations

Kenyan President William Ruto has suggested spending cuts and additional borrowing to address a nearly $2.7 billion budget deficit stemming from his cancellation of planned tax hikes amidst nationwide protests. The withdrawal of the finance bill with tax increases resulted in at least 39 deaths and some protesters briefly breaching parliament. Ruto plans to request parliament for 177 billion shillings ($1.39 billion) in spending reductions for the current fiscal year, coupled with a rise in borrowing by 169 billion shillings.

Kenya’s budget shortfall is now forecasted to reach 4.6% of the GDP in the 2024/25 financial year, up from the previous projection of 3.3%. The austerity measures will entail the closure of 47 state corporations, a 50% decrease in government advisers, halting non-essential travel by public officials, and eliminating budget allocations for the president and deputy president’s spouses.

Ruto envisions that these adjustments will steer the country towards economic progress and has announced a comprehensive audit of the national debt, exceeding 70% of the GDP. Further government changes are expected to be unveiled soon.

Protests have persisted following Ruto’s rejection of the finance bill, with demonstrators urging the president to step down. Protest attendance has waned, and some activists are advocating a reassessment of their approach following violent incidents and looting during Tuesday’s protests.