President William Ruto
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President William Ruto adhered to the conditions set by the International Monetary Fund (IMF) and eliminated all subsidy spending in the first quarter of September.
The government had Initially earmarked to allocate Sh24.87 billion in government subsidies, mainly for fertiliser, in the financial year 2023/24. However, no funds were allocated for this purpose between July and September. During the first quarter of the 2022/23 financial year, the government had expended Sh43.91 billion on subsidies for commodities like maize flour, fuel, electricity, and fertiliser. Nonetheless, in this present financial year, the government has opted for a distinct approach, as none of those resources have been subsidized over the same timeframe.
The impact of the subsidy removal is being felt by the consumers, and record-breaking fuel prices are the main culprit. The resulting inflation has risen significantly over the past year. Statistical figures indicate that fuel inflation contributions to overall year-on-year inflation were higher in September 2023 (2.2 percentage points) compared to September 2022 (2.1 percentage points). Upon assuming office in September of the previous year, Dr Ruto promptly terminated a controversial short-term maize flour subsidy program and initiated an investigation into its implementation.
Former President Uhuru Kenyatta implemented a subsidy program in his last month in office aimed at reducing the cost of maize flour in the lead-up to the August elections. Approximately Sh7.26 billion was allocated for this program, with Sh4 billion disbursed to millers. Additionally, Dr Ruto Ruto phased out the initiative that had resulted in a 15 per cent reduction in power prices since January of the previous year.
As a means of counterbalancing the price reduction, the government pledged Sh14 billion in subsidies to Kenya Power, following the President's cessation of the fuel subsidy and preset determination to stabilize fuel prices solely through the Petroleum Development Levy (PDL). While this was done, Dr Ruto emphasized the fertilizer subsidy's importance in vastly reducing food production costs, deciding to maintain it despite the eventual axing of the fuel subsidy. 2022 saw an overall price cut in fertilizer from Sh6,500 to Sh3,500 per 50-kilogram bag, an endeavour borne out of a subsidy, which translated to approximately another 40% drop in preparation for the yearly planting quota. In August of this year, he further reduced the price to Sh2,500 in preparation for the October planting season.
The lender recently advised Kenya to proceed with its recommended measures of fiscal restraint to restrict unnecessary expenditures in the public sector. These measures include prioritizing the digitization of government services, improving the effectiveness of public investments, and refining the allocation of subsidies. The ultimate goal of these actions is to create financial flexibility for the Treasury.
Comments
Standfirm. There is Possibility that The IMF got Wind of How SUBSIDY Funds were Being swindled into Some people's Pockets; or Being used in Favor of Some TRIBES over Others.
We have black pp problems. Argentina has defaulted many times and inflation above 100pc yet still gets loans from these oppression institutions at lower rates. While Africa is deemed high risk high lending rates but the mission is actually high rewards the lenders get. When presidents get smart they are assassinated. Lumumba, Kennedy, Magufuli aka Mark you feel me!!
I concur my bro @SimamaImara, we black people especially from African are also needed when help is the only option. Though the sad thing is we too hate each other. Believe me it may another century for African to use at least 2 to 3 currency and fully open up their boarders. Despite the white man efforts of divide and rule Africa at all cost.
It's a deliberate attempt to manipulate market economy to weaken the productivity. IMF are often, if not always geared towards the interests of WEF/ EU. The IMF do what their paymasters tell them to do.The question is why?The poor will continue to end up "paying" for all the mistakes and the rich just get richer. Ultimately,right political choices is required to reset everything back to manageable levels and it all starts again.Voters need to know election have consequences.
Any caring government should not increase the cost of its country's staple foods under any conditions. One of the last straws that caused the French revolution was the rising cost of bread and I hope we will not have the same thing happen in our beloved homeland because of the rising cost of unga.
Speaking out loud about the need to have a new world finance infrastructure was not a smart thing but joining the African payment scheme was brilliant. The consequences of that have put you and the country at large into a watch state by the super power who controls IMF, WB, UN Security council and other manipulative entities and hence the drastic pressure to tighten the shilling further downfall. When the people struggled gets feasible chaotic into riot groups within that's when they'll cease the opportunity to support guerrilla war in the country as away to take over just like the other destroyed nations. Simply rule and divided tactics is the goal
Not yet uhuru if economically depending on Imf and WB poverty Increasing adjustment programs since 80s. Really sad! Aid aka loans was pegged on expensive democracy but now more democracy more poverty. Shenzi sana