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Kenya: Ruto says borrowing only way to plug deficit

Kenya's President William Ruto, left, speaks during a meeting with Defense Secretary Lloyd Austin, not pictured, at the Pentagon in Washington, Friday, May 24, 2024   -  
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Susan Walsh/Copyright 2024 The AP. All rights reserved.


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

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. 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.

The new taxes would have raised about $2.7 billion.

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

The protestors say the government should cut corruption and waste instead of raising taxes. President Ruto has promised to reduce the budget of the presidency and to eliminate non-essential expenditure.

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

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