Kenya’s President William Ruto speaks at a press conference where he announced spending cuts in government after protests against Kenya’s proposed finance bill 2024/2025, in Nairobi, Kenya, July 5, 2024. REUTERS/Monicah Mwangi
Kenyan President William Ruto on Friday proposed spending cuts and additional borrowing in roughly equal measure to fill a nearly $2.7 billion budget hole caused by his withdrawal of planned tax hikes in the face of nationwide protests.
Ruto 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.
At least 39 people were killed in clashes with the police and some demonstrators briefly stormed parliament last week.
In a televised address, Ruto said he would ask parliament for spending cuts totalling 177 billion Kenyan Shillings, or US $1.38 billion, for the fiscal year that began this month.
Austerity measures will include the dissolution of forty-seven state corporations, a 50 per cent reduction in the number of government advisers, the suspension of non-essential travel by public office bearers and the removal of budget lines for the president and deputy president’s spouses.
He says the government would increase borrowing by about 169 billion Kenyan shillings, which is roughly US $1.37 billion.
The president has been caught between the demands of lenders such as the International Monetary Fund to cut deficits, and a hard-pressed population reeling from rising living costs.
Kenya’s budget deficit is now projected at 4.6 per cent of gross domestic product in the 2024/25 financial year, up from an earlier estimate of 3.3 per cent.
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