Kenya’s state agencies and Counties face a tough future following the withdrawal of the contested Finance Bill 2024, which had proposed increased taxes to fund government operations.

President William Ruto, under mounting pressure, declined to endorse the Bill on Wednesday, which was intended to add more funds to the government through additional taxes to finance its operations starting July 1, marking the beginning of the country’s fiscal year.

Instead, President Ruto directed further austerity measures to reduce expenditure, beginning with his own office – the Executive Office of the President, which also includes that of his deputy.

“I direct that operational expenditure in the Presidency be reduced to eliminate allocations for the confidential vote, reduce travel budgets, hospitality, and the purchase of vehicles, renovations, and other expenditures,” said Dr Ruto.

President Ruto also instructed that Parliament, the Judiciary, and county governments collaborate with the National Treasury to implement budget cuts, ensuring the government operates within its means.

In his second address to the nation within 24 hours, President Ruto announced that he had yielded to public pressure and that he would refer the Bill back to parliament.

This declaration followed a stern warning to protestors on a day that saw a breach of Kenya’s parliament, resulting in the deaths of several protestors.

“Listening keenly to the people of Kenya, who have said loudly that they want nothing to do with this Finance Bill 2024, I concede and therefore I will not sign the 2024 Finance Bill and it shall subsequently be withdrawn,” he said during a televised address from State House, Nairobi.

The President highlighted that the government had made significant progress in managing the nation’s debt situation.

“Our debt situation is better managed, and our budget now has space for investment in programmes aimed at easing the hardship of vulnerable people and creating opportunities for the youth,” he said.

President Ruto noted that Kenya’s GDP grew by 5.6 percent in 2023, making it the 27th fastest-growing economy in the world.

“Our inflation figures have fallen from eight percent in May 2023 to 5 percent in April this year,” he added.

gandae@businessdayafrica.org