Ruto Reveals Biggest Challenge Since Assuming Office & Strategies to Overcome it
President William Ruto currently acknowledges that grappling with Kenya’s debt situation stands out as one of the most significant hurdles he has encountered since taking office.
During a meeting with Jubilee leaders at State House in Nakuru on Thursday, the Head of State acknowledged that the increasing national debt posed a challenge to the implementation of his development agenda.
He disclosed that out of every Ksh10 gathered by the government, Ksh7 was allocated to settle debts owed to different financial institutions and countries.
Nevertheless, he asserted his commitment to altering the ratio between debt and development, even in the face of the challenging repercussions that may ensue.
“The only problem is debt and that is what has been the biggest headache for the last year. If for every Ksh10 collected, Ksh7 goes towards debt then there is a problem.
“The remaining Ksh3 shilling then is used to pay for salaries, pay money to county governments, and develop the country. I intend to flip it,” he expressed.
Conversely, he claimed that the most effective and singular remedy for debt reduction lay in tax collection, a tactic at which former President Mwai Kibaki demonstrated great proficiency.
“Kibaki came into office and we were collecting Ksh200 billion and he said that we have to go the VAT way. After that, we reached Ksh1 trillion by the time he left office.
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“People only want to be clapped for when they are elected. Why? No one is elected to be clapped for. We have to change this country and those opposing us will be the first to clap for us,” Ruto stated.
The present debt profile of Kenya exceeds Ksh10 trillion, and major creditors include global financial entities like the World Bank, the International Monetary Fund (IMF), and developed nations like China.
Significantly, a noteworthy financial obligation, namely the Eurobond, is scheduled to reach its maturity in the upcoming months. Ruto has already emphasized that the nation plans to settle Ksh500 billion for the Eurobond between December 2023 and January.
The government, under the influence of pressure from creditors, has been compelled to reconsider its fiscal strategies, leading to the implementation of measures like raising existing taxes and introducing new ones to boost revenue.
Some of these comprise a 1.5 percent Housing Levy and a 2.75 percent deduction from salaries or income for health insurance.
Ruto Reveals Biggest Challenge Since Assuming Office & Strategies to Overcome it