Borrowing Is The Only Way To Plug Deficit, Says Kenya’s President Ruto

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After the rejection of the finance bill that would have increased tax revenue, Kenya’s President William Ruto has said that the country will resort to more borrowing to plug a growing budget deficit.

Following deadly protests last week, Ruto declined to sign the bill and wrote to parliament to withdraw it.

During a TV interview Sunday, Ruto said that the failure of the bill had hurt government efforts to ease the country’s debt burden, adding that about 60% of Kenya’s revenues go to servicing debt.

He said East Africa’s largest economy will seek one trillion Shillings ($7.6 billion) from lenders to pay for social services and other programs.

If signed into law, the new taxes would have raised about $2.7 billion.

Last week, lawmakers overwhelmingly approved the finance bill shortly before protesters stormed parliament and set sections of it on fire.

The protesters said the government should cut corruption and waste instead of raising taxes.

President Ruto has promised to reduce the budget of the presidency and eliminate non-essential expenditures.

Kenya’s debt stands at over $80 billion. A large chunk of it is denominated in foreign currency.