Kenyan President Faces Budget Crisis Amid Protests

Kenyan President William Ruto has proposed a mix of spending cuts and additional borrowing to address a $2.7 billion budget shortfall. This move comes after nationwide protests against planned tax hikes, resulting in the death of 39 people. Ruto aims for economic transformation but faces challenges from rising living costs and IMF demands.

Kenyan President William Ruto on Friday proposed a combination of spending cuts and additional borrowing to address a significant budget shortfall of nearly $2.7 billion. The shortfall arose following his decision to withdraw planned tax hikes in response to nationwide protests.

The demonstrations, mainly youth-led, have posed the biggest challenge to Ruto's two-year-old presidency, resulting in violent clashes with police that left at least 39 people dead. Some protesters even stormed the parliament last week. During a televised address, Ruto announced plans to ask parliament for spending cuts totalling 177 billion shillings ($1.39 billion) for the new fiscal year and to increase government borrowing by approximately 169 billion shillings.

Ruto's government is under pressure from international lenders like the IMF to cut deficits, while simultaneously dealing with a population strained by rising living costs. Analysts believe that the withdrawal of the finance bill could lead to Kenya missing its IMF programme targets, although the immediate debt obligations do not necessitate urgent cash.

(With inputs from agencies.)