Oral East Africa>President Ruto balances Gen Z, IMF in olive branch At the hut of the story

data, analysis, tips, politics and gossip

— IMF postpone Kenya review amid protest

— President Ruto proposes middle ground in spending cuts

— Gen Z and opposition defiant

Olive branch

Kenyan authorities have come up with a tight balancing act to address protesters demands while demonstrating commitment to fiscal consolidation key to the International Monetary Fund programme.

Amidst the Gen Z protest, the IMF have pushed back its board approval of fresh funding to Kenya following the withdrawal of the controversial Finance Bill 2024, which has prompted the multilateral lender to review its projection of the country's spending and revenue targets.

Kenya is targeting a budget deficit of 4.6 percent of GDP which is lower than the 5.7 percent last year in line with IMF fiscal consolidation efforts.

The Kenya Kwanza government was eyeing additional revenue of Kes346 billion from extra tax measures that would have helped bring down the budget deficit to 3.3 percent.

The government said it would cut initial budget targets by Kes177 billion which mean Kenya may be in the market for additional Kes169 billion to meet spending.

“The additional borrowing will be used protect the funding of critical government services including hiring of Junior Secondary School teachers and medical interns, funding the milk stabilization program for dairy farmers, reviving our stalled roads program and retaining the fertilizer subsidy program,” President Ruto said.

Budget cuts

President William Ruto has announced wide budget cuts while keeping spending in agriculture, education and addressing stalled projects.

The Kenyan government has announced budget cuts to the executive including slashing advisors by 50 percent, eliminating budget for spouses’ offices and suspending purchase of vehicles outside the security sector for 12 month.

State renovations budgets would be slashed by half, public servants would be grounded from making non-essential travels while confidential budgets across ministries would be scrapped.

The President also used the crisis to announce closure of 47 state owned enterprises but added the employees would be redeployed to other government ministries to forestall panic within civil service. However, civil servants who stay on in government after retirement offering specialized skills will be forced out to reduce the public wage bill.

President Ruto added the government will also protect funding towards settling the debts owed to farmers in the coffee subsector, capitalizing the Coffee Cherry Fund and enabling public sector-owned sugar mills to pay outstanding debts to sugarcane farmers for their deliveries.

The state would use the additional funding for the higher education new funding model, settling arrears owed to counties, and pensions.

Over to Gen Z

The government has also instituted a debt audit team which will have three months to come up with report on the state debt procurement, spending and options for repayment.

The Law society of Kenya which had been appointed to this taskforce has turned down offer to participate citing the office of the Auditor General is constitutionally mandated to conduct that task.

This has set precedent for the political class which claims that the president’s several taskforces as meant to buy him time to assuage the youth and stay in power.

Despite the offer Gen Z protesters turned up in huge numbers for the Saba Saba rally, marking the historical day of protests with calls for President Rutos’ resignation as the names of 41 victims killed from police brutality were called out.