Rethink measures to ease economic woes
The government appears determined to push ahead with its stringent economic demands that have seen people’s lives become even more difficult and painful. The high cost of living has, of course, been compounded by increased taxes and levies and there is more suffering in the pipeline, as President William Ruto piles on the pressure determined to achieve his goals.
He has warned the people to prepare themselves for greater sacrifices, as his administration proposes to increase recurrent expenditure by Sh140 billion. This will see the government borrow Sh864 billion in the 2023/24 financial year. This is a Sh103 billion increase from Sh761 billion the Treasury sought in the current financial year, and which Parliament approved. It will increase the current Budget by Sh162 billion to Sh3.91 trillion.
However, the additional spending will go to fund recurrent expenditure, including salaries, and not development. And while the President has often denounced debts by the previous government, this new plan is eyeing a net external financing of Sh448.7 billion and domestic financing of Sh415.3 billion, according to the National Treasury.
Ironically, President Ruto, who is marking his first year at the helm of the nation, is on record as stating that under his tenure, the government will not borrow to fund recurrent expenditure. The apparent change of heart is somewhat baffling.
The obvious consequence of this is a heavier burden for taxpayers. This comes at a time when the majority of Kenyans, especially those in salaried employment, cannot put food on the table for their families. It is, of course, also bad news for private businesses, as banks are likely to deny them credit in favour of the more assured lending to the government. This will in the end just hamper business growth and the creation of jobs.
The people expected to bear the new burden are the same Kenyans already reeling under the new taxes slapped on them since July, including the unpopular housing levy and the doubling of the Value Added Tax on fuel to 16 per cent.
There is a need to review some of these measures to gauge the people’s ability to sustain them instead of just pushing ahead and risking wrecking everything.
