President William Ruto recently engaged in a phone call with International Monetary Fund (IMF) chief Kristalina Georgieva. A move that came shortly after he withdrew the Finance Bill, 2024 amidst nationwide protests against tax increases.
According to two diplomatic sources speaking anonymously, the conversation occurred around the time of a crisis. Cabinet meeting chaired by the President. During this meeting, Ruto directed the National Treasury to restructure the budget. It address a significant shortfall of Sh300 billion resulting from the bill’s withdrawal. The sources indicated that major donors and the IMF were in consensus regarding the need for flexibility in IMF program targets. Considering Kenya’s urgent budgetary adjustments. Additionally, one source highlighted the expectation that Kenya would demonstrate commitment to curbing wasteful expenditure. Done by combating corruption, and enhancing accountability in exchange for this flexibility.
A Cabinet Secretary, speaking confidentially to the Nation, disclosed that Thursday’s Cabinet session focused extensively on implementing austerity measures and budget cuts to offset the financial gap caused by the Finance Bill’s removal.
“We have agreed to implement austerity measures and reduce budgets to manage the deficit created by the Finance Bill’s withdrawal,” the Cabinet Secretary stated.
A Cabinet document outlined plans for substantial reductions in expenditures. This is while prioritizing essential national programs to minimize adverse impacts. President Ruto, addressing the Cabinet, expressed confidence in the proposed measures, emphasizing their necessity amidst prevailing circumstances.
“There is a widespread perception that excessive spending, corruption, and extravagance among top officials contribute to fiscal challenges.” Highlighted the Cabinet communication.
Following the withdrawal of the Finance Bill, President Ruto proposed budget cuts across all branches of government, including county administrations, aiming to recalibrate financial allocations in line with current fiscal realities.
