In the wake of rejected tax increases and violent protests, Kenyan President William Ruto has announced plans to borrow heavily to address the country’s growing budget deficit. This decision comes after Ruto declined to sign a controversial finance bill that would have boosted tax revenue but sparked widespread unrest.
During a televised interview, Ruto acknowledged that the bill’s failure has complicated efforts to ease Kenya’s substantial debt burden, with about 60% of the nation’s revenues currently allocated to debt servicing. The government now aims to secure approximately $7.6 billion in loans to fund social services and other essential programs.
The proposed tax hikes, which would have generated an estimated $2.7 billion, were met with fierce opposition from citizens who argue that the government should prioritize reducing corruption and wasteful spending. In response, Ruto has pledged to trim the presidential budget and eliminate non-essential expenditures.
Kenya’s total debt, surpassing $80 billion with a significant portion in foreign currency, presents a formidable challenge. As the East African economic powerhouse grapples with this fiscal predicament, the government’s ability to balance financial stability with public demands will be crucial in shaping the country’s economic future.