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FILE PHOTO: Kenya's President William Ruto speaks during a previous press event. /CFP

Kenyan President Ruto announces government austerity measures

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Kenyan President William Ruto on Friday announced a set of austerity measures to reduce government expenses.

The announcement follows the withdrawal of Finance Bill 2024 which, according to Ruto, would have reduced the government’s revenue target by about 2.7 billion U.S. dollars (346 billion Kenya shillings). Massive protests against the tax hikes in the bill led Ruto to change his mind and withdraw the bill.

Ruto outlines budget cuts

Among the budget cuts Ruto mentioned include the suspension of all non-essential travel by state and public officers, and the removal of the offices of the First Lady, the spouse of the deputy president, and the Prime Cabinet Secretary.

The retirement age for public servants has been set at 60 years with “no extensions to their tenure of service whatsoever”.

The number of advisers within the public service will immediately be reduced by half

47 state corporations with “overlapping and duplicating functions” are going away. Their functions will be integrated into the respective line ministries. A decision to fill the chief administrative secretaries (assistant ministers) positions was also suspended.

The president halved the budgets for renovations across the government and cut confidential budgets in various offices of the executive, including the presidency, altogether.

The government purchase of new motor vehicles was suspended for 12 months, except for security agencies. The government will develop a new policy on transport for public officers.

All state officers are banned from participating in fundraising activities.

Ruto said his administration was determined to carry out these measures and other interventions to improve the quality, efficiency, and transparency in serving the public while ensuring they receive maximum value from their resources.

FILE PHOTO: Protests erupted across Kenya over proposed tax hikes in a finance bill. /CFP

“I believe these changes will set our country on a trajectory towards economic transformation, enabling us to achieve the strategic objectives of the “Bottom-Up” agenda and deliver our commitment to radically enhance opportunities for all Kenyans and transform our country.”

Ruto calls for independent audit of Kenya’s public debt

According to Ruto, officials at the National Treasury assessed the adverse impacts of either reducing the government budget by 2.7 billion U.S. dollars or borrowing the entire amount.

“Cutting the entire amount, in our assessment, would significantly and drastically affect the delivery of critical services, while borrowing the whole amount in full will occasion a fiscal deficit by a margin that would have significant repercussions on sectors, including the country’s interest and exchange rates.”

“We have since, after extensive consultations, struck a middle ground and we will be proposing to the National Assembly a budget cut of not the entire 346 (billion shillings) but a budget cut of 177 billion (shillings), and borrowing the difference.”

Ruto said the amount borrowed will increase Kenya’s fiscal deficit from 3.3 percent of gross domestic product (GDP) to 4.6 percent. It will be used to fund certain “critical government services” that members of the public asked him to “protect”, including reviving stalled road projects and retaining a fertilizer subsidy program.

Ruto added that he had appointed an independent task force to conduct a comprehensive forensic audit of the country’s public debt and provide a report in three months.

“This audit will provide the people of Kenya with clarity on the extent and nature of our debt, how public resources have been expended and will recommend proposals for managing our public debt in a manner that is sustainable and does not burden future generations.”

The president says in addition to the measures mentioned on Friday, he’s making other changes in government that he’ll announce later.

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