William Ruto, the president of Kenya, announced plans on Friday to reduce expenditure and borrow more money in about equal amounts to close a roughly $2.7 billion budget shortfall left by his decision to back out of planned tax increases in the midst of widespread opposition.
In reaction to widespread protests led by young people that have produced the largest crisis of his two-year presidency, Ruto discarded the finance measure that included the tax increases.
Last week, there was a brief storming of parliament by protesters, and at least 39 individuals lost their lives in battles with the police.
Ruto declared in a televised speech that the government would borrow an additional 169 billion shillings and that he would seek parliament to slash spending by 177 billion shillings ($1.39 billion) for the fiscal year that started this month.
The president is torn between a beleaguered populace bleeding from soaring living expenses and the expectations of lenders like the International Monetary Fund to reduce deficits.
Analysts predict that if the bill is removed, Kenya will miss its IMF program targets, even though the government does not currently have any outstanding debts that require immediate payment.
Previously estimated to be 3.3% of GDP, Kenya's budget deficit for the 2024–2025 fiscal year is now forecast to be 4.6%, according to Ruto.
According to him, the president and deputy president's wives' budget lines will be eliminated, 47 state firms will be dissolved, the number of government advisers will be cut by half, public office holders' non-essential travel will be suspended, and some other austerity measures will be implemented.
In addition, he declared that he would soon make announcements regarding reforms to the government and announced a forensic audit of the nation's debt, which accounts for over 70% of GDP.
Ruto conducted a live audio forum on X to interact with youth after the lecture. He was sharply questioned on economic policies, corruption, and the harshness of policy.
Osama Otero, a protesting activist, confronted Ruto regarding reports that state security agents had kidnapped demonstrators. Otero claimed that at three in the morning, he was picked up by plainclothes men, blindfolded, and brought to a residence to be interrogated.
After denying police participation in other alleged disappearances, Ruto expressed regret for Otero's treatment and pledged to pursue his case.
Since Ruto discarded the budget law, there have been ongoing protests, with many participants demanding the resignation of the president. However, after Tuesday's protests were marred by violence and looting, turnout has decreased, and several activists have called for a reevaluation of their strategy.
Activists have attributed the violence to goons that politicians hired to undermine the protest movement. According to the government, opportunistic criminals are to blame.