Friday, July 5, 2024 – It is now official that the Kenya Kwanza government will not do any meaningful development thanks to the Gen Z revolution that forced President William Ruto to reject the draconian Finance Bill that would have given him a whopping Sh346 billion in revenue.
This was revealed by Ruto himself during his address to the nation where he resolved to borrow Ksh169 billion instead of implementing the proposed Ksh346 billion increase as outlined in the contentious Finance Bill 2024.
Ruto stressed that this move will aid the government's strategy to mitigate financial strain while maintaining essential services.
Initially, the National Treasury weighed the options of either fully borrowing Ksh346 billion or implementing across-the-board budget cuts equivalent to the entire amount.
Ultimately, a decision was reached to slash the budget by Ksh177 billion and borrow the remaining balance.
"In our assessment, completely eliminating this amount would severely impact critical government services, while borrowing it in full would widen our fiscal deficit, potentially destabilising sectors such as exchange and interest rates," remarked President Ruto.
The proposed reduction in the budget and the subsequent borrowing are set to elevate the fiscal deficit from an intended 3.3 per cent of the GDP to 4.6 per cent, albeit still lower than the previous year, according to Ruto's statement to the nation.
Ruto's decision comes amidst heated debates over fiscal responsibility and economic sustainability, with critics questioning the long-term implications of increased borrowing against budget cuts.
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