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Kenyan president warns of huge consequences over debt plan failure



President William Ruto’s warning of “huge consequences” following the rejection of a finance bill highlights Kenya’s escalating debt crisis and the government’s desperate measures to stabilize the economy.

Kenya is teetering on the edge of an economic precipice. President William Ruto, facing fierce public backlash and a burgeoning debt crisis, has sounded a dire warning: rejecting his proposed finance bill will have “huge consequences” for the nation. The bill, intended to raise revenue to combat a staggering $2.7 billion budget deficit, was scrapped after violent protests erupted across the country.

Ruto, whose popularity has plummeted since taking office, is now grappling with how to manage Kenya’s $80 billion public debt. This debt, which makes up 70% of the country’s GDP, has been largely accrued from loans by the World Bank, IMF, and China. With public anger mounting over government extravagance and rampant corruption, Ruto has pledged to slash his office’s funding and eliminate nearly four dozen redundant state enterprises.

However, the question remains: how will Kenya find the funds to pay off its debt without further angering millions of struggling citizens or crippling the economy? The country’s economy grew by 5.6% in 2023, but further borrowing, as suggested by Ruto, could lead to disastrous consequences. Economist Mbui Wagacha has called for the establishment of a professional budget management body akin to the U.S. Office of Management and Budget, criticizing the current system where the Treasury drafts budget estimates that the parliamentary finance committee then transforms into finance bills.

“Parliament has abdicated its mandate on public finances, focusing instead on self-interest,” Wagacha stated, proposing a diplomatic strategy to attract investment and restructure the debt. Fellow economist Ken Gichinga echoed these sentiments, warning that additional government borrowing would slow economic recovery from the COVID-19 pandemic and the war in Ukraine. “Higher borrowing leads to higher interest rates, which stifles business and economic growth,” he explained.

President Ruto, advocating for self-sustainability, has stressed the need for increased tax revenue. “If we are serious, we must enhance our taxes,” he declared in May. However, this stance has been met with fierce resistance from Kenyans, who stormed parliament in protest of rising living costs.

Last week, Ruto, who had previously championed the rejected finance bill, expressed his frustration, claiming he had worked tirelessly to free Kenya from its debt trap. He forewarned of the significant repercussions if the bill did not pass.

Wagacha argues that economic growth should precede any attempts to boost revenue or tax collection. “You expand the economy with jobs and investments, putting money in people’s pockets. Then it’s easier to talk about taxes,” he said. He suggested easing access to low-interest credit for businesses, particularly in tourism and agriculture, to stimulate growth and address youth unemployment.

Gichinga proposed incentives for businesses to create jobs through lower taxes and interest rates, emphasizing the need for a job-centered economic policy. “At the end of the day, we need policies that create jobs. That’s what we’ve been lacking,” he stated.

The International Monetary Fund (IMF), which had recommended some of the controversial tax measures, has faced public backlash. Protesters have accused the IMF of economic colonialism, demanding a more supportive role in Kenya’s development.

In a recent statement, the IMF acknowledged the challenges Kenya faces and pledged to help improve its economic prospects. However, Gichinga called for the IMF to act as a “strong development partner” beyond just focusing on debt sustainability.

As Kenya navigates this precarious period, the world watches to see if Ruto’s administration can strike a balance between debt repayment and economic growth, without further inflaming public discontent or derailing the nation’s recovery.


Farah Maalim Bragging About Stolen Millions Sparks Outrage



A Shocking Admission

An explosive audio clip of Farah Maalim, MP for Daadab and former Deputy Speaker of Kenya’s National Assembly, has surfaced. In the recording, Maalim boasts about embezzling millions of dollars during his tenure.

Speaking in Somali on Twitter Space, he reveals how he exploited his position as deputy speaker and chairman of the Parliament Liaison Committee to pocket substantial sums from the allocated parliamentary funds.

Timing and Context

The timing of this revelation is critical. Maalim is already under fire for advocating violence against 5000 Gen Z protesters who stormed Parliament to oppose the now-withdrawn Finance Bill 2024. This audio adds fuel to the controversy, portraying Maalim as both corrupt and violent.

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Kenya in Chaos: Police Open Fire on Protesters Storming Parliament



In a dramatic turn of events, Kenya descended into chaos on Tuesday as police fired on demonstrators attempting to storm the parliament, resulting in at least five deaths. The protests, ignited by a controversial bill to raise taxes, have plunged the nation into turmoil and put President William Ruto’s leadership under intense scrutiny.

In the capital Nairobi, scenes of chaos unfolded as protesters overwhelmed police forces, chasing them away in an attempt to breach the parliament compound. Citizen TV footage revealed the aftermath: a partially ablaze building with significant damage. Demonstrations erupted in several other cities and towns, with many protesters calling for Ruto’s resignation and voicing fierce opposition to the tax hikes.

In a televised address, President Ruto condemned the protests, accusing “dangerous people” of hijacking the tax debate. “It is not in order, or even conceivable, that criminals pretending to be peaceful protesters can reign terror against the people,” Ruto declared, promising a swift and decisive response to what he labeled “treasonous events.” Police resorted to firing live ammunition after tear gas and water cannons failed to disperse the crowds, eventually clearing the parliament building and evacuating lawmakers through an underground tunnel.

Defense Minister Aden Duale announced the deployment of the army to assist the police in handling what he described as a “security emergency.” This escalation marks a significant turn in the government’s response to the unrest, highlighting the severity of the situation.

The Kenya Medical Association reported at least five fatalities from gunshot wounds, with a total of 31 injuries, including 13 from live bullets and four from rubber bullets. The association urged authorities to establish safe medical corridors to ensure the safety of medical staff and ambulances amidst the violence.

Ruto, who campaigned on a platform of supporting Kenya’s working poor, now finds himself caught between the demands of international lenders like the International Monetary Fund and a population struggling with economic hardships. The proposed finance bill aims to raise an additional $2.7 billion in taxes to address Kenya’s heavy debt burden, but has faced vehement opposition from the public.

The White House has expressed close monitoring of the situation, urging calm and restraint. Ambassadors from Britain, the U.S., and Germany issued a joint statement expressing deep concern over the violence and calling for all parties to exercise restraint. Amidst the unrest, internet services across Kenya experienced severe disruptions, adding to the chaos.

Senior opposition leader Eugene Wamalwa and Raila Odinga have called for President Ruto to step down, with Odinga emphasizing the need for dialogue and the withdrawal of the finance bill. “I am disturbed at the murders, arrests, detentions, and surveillance being perpetrated by police on boys and girls who are only seeking to be heard over taxation policies that are stealing both their present and future,” Odinga stated.

The protests, initially focused on the finance bill, have evolved into a broader movement demanding Ruto’s resignation. This youth-led movement, lacking a formal leader, has grown bolder in its demands and shows no signs of backing down despite the government’s concessions, which have failed to placate the demonstrators.

Kenya’s sovereign dollar bonds experienced a sharp decline amidst the unrest, with the 2034 maturity trading significantly lower. The economic ramifications of the ongoing protests add another layer of complexity to the already volatile situation.

As Kenya grapples with the fallout from Tuesday’s violent protests, the country stands at a crossroads. The government’s heavy-handed response and the mounting death toll have only fueled public anger and resistance. With international calls for restraint and dialogue growing louder, the coming days will be crucial in determining the future course of this deeply divided nation.

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