By Enyichukwu Enemanna
Kenya will have to borrow more to keep the government running after the rejection of the 2024 finance bill aimed to raise money through tax, the country’s leader, William Ruto said.
Ruto had last week Wednesday announced that he would withdraw the bill containing the controversial tax hikes after deadly protests which saw parliament set on fire.
Ruto on Sunday however said dropping the bill had set the country back two years, as he explained the difficulty of being unable to raise extra taxes while facing a huge debt burden.
He said this meant Kenya would have to borrow one trillion shillings ($7.6bn; £6.1bn) just “to be able to run our government”.
This is a 67% increase on what had been planned. But he also said he was considering cuts in spending across government, including in his own office, as well as reducing allocations to the judiciary and the county governments.
According to the President, the proposed tax measures were part of efforts to cut the debt burden of over $80bn (£63bn). About 60% of Kenya’s collected revenues goes to servicing debt.
“I have been working very hard to pull Kenya out of a debt trap… It is easy for us, as a country, to say: ‘Let us reject the finance bill.’ That is fine. And I have graciously said we will drop the finance bill, but it will have huge consequences,” the President said while speaking to journalists on Sunday night.
