Ruto: My policies of cutting expenditure, raising revenue are paying off

President William Ruto has defended his economic policies which he said have started to pay off, moving Kenya from the edge of debt distress.

The President said the economic transformation journey, which began last year September, has seen the country move from the brink of debt distress towards economic stability.

Speaking during the 60th Jamhuri Day celebrations at Uhuru Gardens in Nairobi, he cited policy measures to raise revenue, cut back on expenditure, and defer implementation of critical developments as some of the painful decisions his administration had to make to set Kenya on the path of economic renaissance.

Defending the measures which have drawn criticism from the Opposition and a majority of Kenyans, the Head of State said that despite the country having made tremendous strides in the democratic and political sphere, the same could not be said in the economic front.

He said the stagnation in the economic sphere saw Kenya’s peers 60 years ago including South Korea, Singapore and Malaysia become economic giants and more advanced countries leaving Kenya lagging.

Consequently, the President said he had to decide to transform the economy by making necessary sacrifices to steer the country back on the path to accelerated economic growth.

He said the focus of the Kenya Kwanza government has been on ways of transforming the economy and making decisions, some painful, aimed at steering Kenya in a new economic direction.

He said Kenya’s inflation stands at 6.8 percent, down from a high of 9.2 percent in 2022, and the country has witnessed a 5.4 percent gross domestic product (GDP) growth, making Kenya the 29th fastest-growing economy in the world, according to the World Bank.

“What we have done together, the price we have paid together and the sacrifices we have made together have rescued our country from an economic catastrophe,” said President Ruto.

“Proudly, these sacrifices have paid off: I can now confirm that Kenya is safely out of the danger of debt distress and that our economy is on a stable footing,” he added.

The Commander-in-Chief said he inherited a country where savings as a percentage of the GDP was dismal, the gap between the rich and poor gaping and many, especially young people, struggling with unemployment.

However, together, the country has made the right choices, sometimes taking difficult and painful decisions, to steer Kenya back from the edge of the catastrophic cliff of debt distress, and move it in a new direction.

“This is the assignment we took up on Day 1, September 13, 2022, and which we have been painstakingly undertaking for the past year,” he said.

To build a culture of savings in the country as part of plans to create long-term investment resources to fund Kenya’s growth and development, and provide better retirement for Kenyans, his administration decided to enhance National Social Security Fund monthly contributions by four and half times.

As a consequence, the Fund will raise an additional Sh400 billion in the next five years, tripling the value from Sh320 billion to over Sh1 trillion by 2027.

Furthermore, the President said Kenyans will no longer have to wait for over three months to receive their retirement benefits.

Owing to digitisation and automation, NSSF benefit processing turnaround time has improved significantly, from an average of 82 days to 10 days with further reduction in the processing period to within a day in the next year.

“We are undertaking the expansion of retirement benefits coverage to the 15 million Kenyans currently active in the informal sector through product innovation and bottom-up enrolment strategies at the grassroots level,” he said.

Turning his attention to the vulnerable group including the elderly, orphaned and those who live with severe disability, Dr Ruto said he has kept the promise to have the group receive their social protection stipends before public servants, including the President, receive their salaries where all 1,233,149 eligible beneficiaries now receive their stipend on time.

Further, he pointed out that the government has allocated an additional Sh2 billion for newly enrolled beneficiaries who are undergoing verification and will begin to receive their stipends beginning March next year.

To ensure orphans, the elderly and persons with severe disability do not travel long distances and spend considerable portions of their stipends on logistics, he said the government has partnered with Safaricom for a new delivery mechanism for beneficiaries to receive their stipends from M-PESA agents in their localities.

“Orphans and persons with severe disabilities will begin using this new mechanism beginning this month. The elderly will start in January. We commend Safaricom for providing this service free of charge,” said Dr Ruto.

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