President William Ruto has handed Kenyans a mixed bag of pain and hope for the new year, with focus on the battered economy, a heavy debt burden and high inflation and unemployment rates.
His administration will have little time for luxury this year thanks to the growing list of challenges.
The country has been running on a severely strained budget following a series of subsidies meant to cushion citizens from rising fuel and other commodity prices, which have since been discontinued.
In his speech on the eve of New Year, the President said it was impractical to revive the subsidy programmes, saying the decision by the previous government to introduce the same was made for political expediency.
Many had hoped that the Ruto government would immediately cut the price of maize flour as promised during the campaigns but this has not happened. The high fuel prices have continued to have a ripple effect on the cost of other goods and services.
The country is also facing food insecurity after four failed rain seasons, which has resulted in “the worst drought in the country in 40 years”.
But President Ruto, in what could be good news to Kenyans, gave an assurance that the cost of electricity will remain affordable.
He also promised to increase the amount of money allocated to the Hustler Fund, which he said Kenyans had borrowed more than Sh20 billion from since its launch in November.
“To allay fears that are being spread by people that there will be an increase in electricity cost, I want to assure the country that we removed subsidies in August last year, there will be no additional charges today or going into the future on electricity bills to the people of Kenya. We have already taken care of the subsidies that we removed in August,” he said. He spoke during Sunday service at the Siloam Ministry Church in Kisauni, Mombasa County yesterday.
The Head of State said that the government is conducting a review of tariffs in the energy sector and that in three months’ time, there will be public consultations to ensure that the tariffs are sensitive to those low income earners. The plan will also ensure manufacturers are supported.
“Contrary to lies being peddled round that there would be job losses, rise in cost of living ... those are people who are just speculators. Let me assure the country that we have already made the right decisions on ensuring that we have a predictable platform on how to run our economy.
“We are going to ensure that manufacturers, value addition processors and all Kenyans, including those on lifeline tariffs, are taken into consideration as we review the tariffs going into the future,” said the President.
He also assured Kenyans that the Kenya Kwanza administration has transitioned Kenya from an economy based on debts to that based on revenue.
“That is the kind of country and sure footing that we are looking at. God’s word teaches us that a good man leaves an inheritance for his children’s children, which means a not so good man leaves debts as an inheritance to his children. We do not want to be bad people; we want to leave an inheritance for our children by building our country not on debt but on our taxes.
The Head of State also issued a stern warning to the wealthy who have not been paying taxes that they will have to comply with the law, saying for the country to depend on local revenues, all Kenyans must pay their taxes.
“I thank many Kenyans, especially low income earners, who are paying their taxes without fail. I want to assure you that all the dignitaries will pay their taxes to enable us to build this country on a strong foundation so that we can defend our independence by making sure that we build our country, run our economy and development on the basis of our own taxes and revenue,” he said.
President Ruto proposed that the tax burden be removed on religious institutions because of the roles they play in the development of the country.
“I made a commitment that the government of Kenya is going to work hand in hand with religious institutions from across the divide to make sure that we make it easy for our religious institutions to make their contributions, to participate in making sure that we have a society that is built on sound moral grounding,” he said.
On Saturday, President Ruto maintained that subsidies on commodities could not offer a permanent solution to the country’s economic woes. He said that his move to suspend subsidies on fuel, electricity and food was a step in the right direction, saying the decision by the previous government to introduce the same was politically motivated.
“When I came into office, I found that some decisions were made for political expediency because we had an election. The decisions about subsidies on fuel, maize flour and electricity were not informed by the science of our economy but by political expediency,” he said at State House Mombasa.
“We had to do away with those subsidies or they would cost our economy big time. We would be spending close to Sh25 billion every month to subsidise some of these programmes. We did away with the subsidies in August and I am happy that we have saved our economy a huge amount of money and we are now well on the way to making sure that we are investing in areas that will drive our economy in a sustainable way,” he added.
The President said that when he was sworn into office, he chose to make unpopular but necessary decisions for the country’s progress.
He assured Kenyans that his government has put in place measures to ensure that the economy is built on a strong foundation that is sustainable and self-reliant.
According to the President, the tough decisions that his government has made will see the country’s income grow from Sh2 trillion to Sh3 trillion.
“Within five years, we will have doubled our revenues so that we can build our economy on the sound footing of our own revenues collected locally rather than being trapped in debt. These are important issues. We must tell each other the truth, not short political gimmicks but solid economic policies that will take us far,” he said.
On education, President Ruto said his government will this month employ 30,000 teachers to address shortage. He added that another 3,000 tutors will be employed in technical and vocational education and training institutions.
