President William Ruto on Sunday disclosed that the Kenya Kwanza government will continue borrowing to finance government operations.
Speaking during a roundtable interview with journalists at State House, Nairobi, Ruto said the dropping of the Finance Bill 2024 posed serious ramifications with regards to financing the budget requiring the government to resort to borrowing.
"We have dropped the Finance Bill. What does that mean? It means we have gone back almost 2 years," President Ruto stated.
To fund government operations in the financial year, the Head of State remarked that his government will continue borrowing to ensure that his government does not lag behind in service delivery.
"It means that this year we are going to borrow Ksh 1 trillion shillings to be able to run our government. Dropping the finance bill means we will not confirm the JSS teachers, it means we cannot support our farmers, it means we will continue to import potatoes from Europe," Ruto explained.
He stated that without the funds, his administration hoped to raise in the proposals in the Finance Bill 2024, it would be impossible to assist local farmers in ensuring they receive at least Ksh50 per litre of milk.
"It means we cannot help our farmers get a return of Ksh50 per litre of milk, we cannot pay coffee farmers' debts, we cannot support the cherry fund, and we cannot help Mumias farmers with their debts," he said.
President Ruto announced last Wednesday that he would not sign the contentious Finance Bill into law, following days of growing unrest and protests by the Gen-Z. The bill was intended to generate Ksh346 billion in additional revenue.
Kenya agreed to a four-year loan with the IMF in 2021 and signed on for additional lending to support climate change measures in May 2023, taking its total IMF loan access to $3.6 billion.
The head of government directed the National Treasury to prepare a mini-budget starting in July after he rejected the Finance Bill 2024, which was expected to raise an additional Ksh346 billion.
He signed into law Appropriations Bill 2024, to allow both governments to spend even as he referred the County Allocation and Revenue Bill to Parliament for a downward review in allocations.
The President clarified that he had signed the Appropriations Bill to guarantee the continuity of government operations.
“I have therefore assented to the Appropriations Bill 2024 and instructed the National Treasury to immediately prepare supplementary estimates to reduce expenditure by the amount of revenue that was expected to be generated by the rejected Finance Bill,” he said in a statement.
He stated that the reduction in expenditure would be borne equitably by both levels of government.
In his speech, while rejecting the Finance Bill on Wednesday, President Ruto had called for expenditure cuts to cover the expected shortfalls in revenues, including allocations to the Executive.
