Mr Odinga spoke on a day the country woke up to a significant hike in fuel prices that hit the Sh200 mark per litre for the first time in history, and which is set to make the already high cost of living shoot up further.
The Azimio la Umoja One Kenya coalition leader said the cost of basic commodities has gone up since Dr Ruto took over the reins of power last year.
The coalition cited the high cost of fuel, maize flour, sugar and electricity, among other basic items, saying the price of a kilogramme of sugar has gone up 61 per cent and that of fortified unga by 8.1 per cent. A litre of petrol, the coalition, said has gone up by 22.1 per cent, kerosene up by 31.1 per cent, while that of diesel is up by a high of 28 per cent. The commodities are retailing at Sh211.64 for petrol, diesel at Sh200.99 and kerosene at Sh202.61.
“Given the rise in fuel after last night, we estimate that these prices will go up by up to 70 per cent. We are staring at a straight second disastrous year under Kenya Kwanza,” Mr Odinga said at a press conference.
He went on, “In one year under Kenya Kwanza, our currency, the Kenya shilling, the once mighty currency in the region, has received severe beating. In August 2022, the shilling was trading at 120 for one US dollar. A year later, the shilling is trading at 150 against one US dollar.”
Dr Ruto rode to power on lofty promises to create jobs for millions of unemployed youths, prioritise the needs of low-income earners and lower the cost of living. But new tax measures that took effect on July 1 have made life more expensive while hitting businesses hard.
The Treasury has proposed more taxes that will result in reduced take-home pay for workers. In the run-up to the last general election, Dr Ruto promised to improve the living standards of the downtrodden through a bottom-up economic model. But analyses of the Kenya Kwanza Manifesto vis-à-vis Dr Ruto’s first budget and accompanying tax measures show that his administration has backtracked on some of the pre-election promises.
In his manifesto, he identified the high cost of petroleum products as a major challenge to Kenya's economic stability.
“Petroleum, which is Kenya's single largest import, will remain an important fuel for several decades. Price volatility is a challenge to consumers and economic stability. It has been rightly observed that taxation is a major factor in the high cost of petroleum products,” states the document Dr Ruto used to rally for support.
But Mr Odinga said: “Given the state of the economy and the promises they made during campaigns, Kenyans would have expected that Kenya Kwanza would cut down expenditure and borrowing. The regime did the complete opposite. It increased spending by Sh400 billion; spending money it does not have and raising it by extorting more taxes from suffering Kenyans.”
The former premier said that in the second quarter of the financial year 2022/23, which is the first period of the Kenya Kwanza regime, the economy grew by only 5.2 per cent. A similar period in 2021/22, he said the economy grew by 11 per cent. He accused the new administration of engaging in a borrowing spree – locally – crowding out private enterprise from credit facilities from local banks. Mr Odinga said only the government can now afford to borrow at an “astronomical rate of 17 per cent or more” from the domestic market.
“The result has been that micro and small businesses are struggling, defaulting and folding up, while the larger private sector is, at best, stagnating, or equally folding up.”
Mr Odinga said that no amount of fertiliser will lower the cost of food as long as the cost of fuel is unchecked.