President Ruto confronted by dilemmas that plagued Uhuru
President William Ruto is handed the instruments of power by his predecessor Uhuru Kenyatta after he took the oath of office at Kasarani International Stadium on September 13, 2022
What you need to know:
- President Ruto is now implementing measures he vehemently opposed when his predecessor Uhuru proposed them.
- Kenya’s public debt hit Sh8.6 trillion by September last year and the government plans to borrow Sh861 billion during the year ending June, based on projections from the National Treasury.
- According to analysts, President Ruto seems too eager to “please the West and to be their errand boy on foreign policy issues”.
President William Ruto is facing similar troubles as his predecessor Uhuru Kenyatta, some of which he was accused of orchestrating as he prepared to contest for the presidency.
The Housing Levy, which has since turned into a hot political and legal potato for President Ruto, was dropped by Mr Kenyatta’s Jubilee Party administration after it was rejected by the courts in 2018.
The High Court stopped the plan to deduct 1.5 per cent of workers’ pay to finance the then proposed National Housing Development Fund following a petition by the Central Organisation of Trade Unions (Cotu).
“Over-taxation should not be the fallback whenever the government is unable to meet its budget targets. The government must resort to prudent financial management in line with the constitution and stop the theft of public money and properties to plug gaps in the national budget,” Cotu boss Francis Atwoli stated in a supporting affidavit then.
Recently, the Court of Appeal declined to extend orders allowing the government to continue collecting the levy after it was declared unconstitutional by the High Court.
But the President has indicated that his administration will pull all the stops to implement the deduction. Parliament has since concluded the public participation on the government sponsored Affordable Housing Bill, 2023 that seeks to address the issues raised by the High Court.
President Ruto has also suffered a string of court orders stopping some of his contentious programs, including planned deployment of police officers to Haiti, sale of 11 parastatals and appointment of chief administrative secretaries (CAS), among others.
Similarly, Mr Kenyatta lost several major cases in court, among them the Building Bridges Initiative (BBI) birthed through the famous handshake with opposition leader Raila Odinga after the dispute 2017 presidential poll.
Other major court cases that Mr Kenyatta lost were on the Nairobi Metropolitan Services (NMS), which the High Court declared unconstitutional as well as the appointment of CAS.
And just like Mr Kenyatta and his allies who claimed that the Judiciary had opened a war with the Executive, President Ruto and his backers have claimed that some judicial officers were being used by his opponents to frustrate his development plans.
In his UDA party, President Ruto was forced to postpone party elections that had been scheduled for December last year to April this year over simmering leadership infighting.
He is also confronting a fierce regional supremacy battle pitting his deputy Rigathi Gachagua against a host of MPs led by Ndindi Nyoro (Kiharu).
The president has since called the warring camps to order, saying the fights risk derailing Kenya Kwanza development agenda.
During Mr Kenyatta’s last term in office, Dr Ruto was accused of engaging in premature 2022 presidential elections, which was said to be derailing Jubilee’s development.
In 2021, Mr Kenyatta proposed 16 per cent VAT on petroleum products, which his then deputy Ruto and his brigade in Parliament termed insensitive. Dr Ruto and some of his current Cabinet secretaries CSs— who served as MPs in the last Parliament—strongly opposed the proposal, forcing Mr Kenyatta to cut the increment to 8 per cent instead.
Dr Ruto’s allies then backed the Petroleum Products (Taxes and Levies (Amendment) Bill, 2021 that sought to reduce the VAT on petroleum products from the 8 per cent to 4 per cent, even as they accused Mr Kenyatta of burdening Kenyans with taxes.
Now, President Ruto is in the same shoes. He is facing heavy criticism for doubling VAT on fuel from 8 per cent to 16 per cent and introducing the Housing Levy, higher deductions for the National Social Security Fund and the push for a 2.75 per cent deduction of gross pay for a national health cover.
He has, however, defended his administration’s moves citing the debt burden.
“In every Sh10 that I am collecting, Sh7 goes into debt. Do you want me to go the direction other countries are going by defaulting on loans?” asked Ruto in December last year during an interview with media houses.
“Are you telling me to tell teachers that I have no salary for them this month because I had to reduce the taxes on fuel?” he asked further.
Former President Uhuru Kenyatta receives President William Ruto at State House, Nairobi on September 11, 2022.
And just like during Mr Kenyatta’s regime, the Ruto government has come under criticism for not standing up against some of the demands made by the International Monetary Fund (IMF), such as increasing taxes.
Mr Atwoli has already claimed that the devaluation of the Kenyan shilling was “on the recommendation of the IMF and World Bank”. He said that the weak shilling has diluted the purchasing power of workers and their savings.
Kenya’s public debt hit Sh8.6 trillion by September last year and the government plans to borrow Sh861 billion during the year ending June, based on projections from the National Treasury.
“Considering this increase [in public debt], and given that the government is continually borrowing to pull itself out of the cash crunch, things are not looking good,” said Mr Atwoli.
In April, 2021, barely days after the IMF approved a Sh255.1 billion facility, Kenyans took to social media demanding that the Bretton Woods institution cancel the loan, citing runaway graft and the country’s debt burden.
“Previous loans to the Kenya government have not been prudently utilised and have often resulted in mega corruption scandals. The scandals have not deterred the ruling regime from more appetite for loans, especially from China,” a petition stated.
In a recent interview with the Nation, Wiper leader Kalonzo Musyoka said the Kenya Kwanza government was being controlled by the international lenders to the extent that it was imposing taxes without considering the pain the taxpayers are going through.
National Dialogue Committee co-chairpersons Kalonzo Musyoka and Kimani Ichung'wah flanked by committee members present their final report at the Hilton Garden Inn on November 25, 2023.
“They fail to recognise that when you are leading a nation, then you have to stand firm against other people coming with all forms of interests,” said Mr Musyoka.
He added: “They are just following the script of the IMF, they are told you don’t do this, we don’t give you money. So it is an IMF-led government and therefore it has no consideration for its citizens.”
But Economist XN Iraki said it is IMF’s right to impose conditions on any country seeking loans.
“IMF is invited by the government to help turn around the economy. It prescribes economic medicine that is often unpalatable to politicians. But in consultation with them,” said Prof Iraki.
“Should we blame the doctor for prescribing bitter medicine? We are responsible for budget deficits, though some forces are beyond our control like high interest rates in the US or wars in the Middle East or Ukraine,” he added.
He said that the government has to find a way of living within its means by reducing government expenditure.
“We could also distribute taxes across years or widen the tax base so that the tax burden is shared,” he said.
Political analyst and university lecturer David Monda noted that although the problems that Mr Kenyatta faced and President Ruto is currently being confronted by are similar, the circumstances and approach taken are different.
Prof Monda said President Ruto seems determined to push through his projects, including by ignoring court orders, since failing to implement them may work against his 2027 re-election.
“In addition to this, Ruto has reneged on his promise to end reckless borrowing. The government has not only engaged in more borrowing with the IMF—which will come with serious belt tightening for Kenyans—but he has increased the tax burden on Kenyans. This has made him very unpopular,” he said.
Cotu Secretary-General Francis Atwoli. The workers' union offered a five-point strategy for President Ruto to help get Kenya out of the current economic hole.
According to Prof Monda, President Ruto seems too eager to “please the West and to be their errand boy on foreign policy issues”. “I also think the power struggle between Prime Cabinet Secretary Musalia (Mudavadi)and (Deputy President Rigathi) Gachagua will split the government on ethnic, regional and class lines. The opposition will be looking to exploit this situation as new political formations emerge prior to 2027.”
Similar views were shared by Prof Macharia Munene, who described President Ruto as forceful and willing to go against the law in implementing his programmes. He said this attribute may work against him in the long run as he is projecting an image of a dictator.
“The issues might be similar but personalities are different. Ruto is forceful. He appears not to believe in the rule of law,” said Prof Macharia. “Uhuru avoided projecting that image of openly ignoring court orders. But Ruto is out to force people to build houses that they are likely not to occupy.”
Former Nyeri Town MP Ngunjiri Wambugu described running a country as a continuum, saying that what Mr Kenyatta dealt with—how to ensure the country has enough resources to meet its obligations and to deliver services—continued after he left office.
He said it was ironic that Kenyans want good public services without to pay taxes. He added that the previous regime made people comfortable through subsidies that have plunged the country into more debts.
“We are an interesting people; we want to run a welfare state: that is free/subsidized education, healthcare, elderly people funds, maternity, social development funds. We also want good transport and communications infrastructure, security, but we don’t want to all pay taxes, neither do we want the government to borrow,” Mr Wambugu said.
President Ruto is also facing a strong opposition that has threatened to go back to the streets over higher taxes.
The Azimio la Umoja One Kenya Coalition last year staged nationwide anti-governement protests that led to paralysis of business before agreeing to enter talks with the government.
The talks, however, failed to address the high cost of living after the Kenya Kwanza side rejected proposals to reduce some taxes.
On Tuesday, Mr Odinga chaired a meeting of the coalition’s summit where they resolved to continue with public interest litigation while “Other ways are being worked on whose ultimate aim is to force the regime to be sensitive to the tribulations of the people”.
