President William Ruto disclosed on Sunday that the Kenya Kwanza government will continue borrowing to finance government operations. During a roundtable interview with journalists at State House, Nairobi, Ruto explained that the rejection of the Finance Bill 2024 necessitates borrowing to meet budgetary needs.
"We have dropped the Finance Bill. What does that mean? It means we have gone back almost two years," President Ruto stated.
To ensure the government does not lag in service delivery, the Head of State revealed that his administration will borrow Ksh1 trillion to fund operations for the financial year.
"It means that this year we are going to borrow Ksh1 trillion to run our government. Dropping the Finance Bill means we will not confirm the JSS teachers, we cannot support our farmers, and we will continue to import potatoes from Europe," Ruto elaborated.
He emphasized that without the funds from the proposed Finance Bill 2024, it would be impossible to support local farmers, 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, support the cherry fund, or assist Mumias farmers with their debts," he added.
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 aimed to generate Ksh346 billion in additional revenue.
In 2021, Kenya agreed to a four-year loan with the IMF and signed for additional lending in May 2023 to support climate change measures, bringing its total IMF loan access to $3.6 billion.
The President directed the National Treasury to prepare a mini-budget starting in July after rejecting the Finance Bill 2024, which was expected to raise an additional Ksh346 billion.
He signed the Appropriations Bill 2024 into law to allow both levels of government to continue spending, while referring 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 ensure 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.
The President mentioned that the reduction in expenditure would be borne equitably by both levels of government. In his speech rejecting the Finance Bill on Wednesday, President Ruto called for expenditure cuts to cover the anticipated shortfalls in revenues, including allocations to the Executive.