President Ruto has declined to sign the proposed Finance Bill 2024 into law amid widespread protests.
In a press conference on Wednesday, June 26, Ruto instead proposed austerity across government departments, including the Executive.
"Because I ran a government but I also lead people and the people have spoken, I am grateful to all members of the National Assembly who voted yesterday affirmatively for the Finance Bill 2024 as amended on the floor of the House," he said.
"Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this Finance Bill 2024, I concede, and therefore I will not sign the 2024 Finance Bill and it shall subsequently be withdrawn."
At the same time, Ruto directed for immediate further austerity measures to reduce expenditure starting with the Office of the President, the entire presidency, and extending to the executive arm of government. He also directed a reduction in operational expenditure in the presidency, cutting allocations for travel, hospitality, vehicle purchases, renovations, and other expenses.
"Working with the Treasury, we will also undertake budget cuts and austerity measures to ensure we live within our means, respecting the clear message from the people of Kenya, " he added.
Consequences of Bill withdrawal
Economist Billow Kerrow clarifies that if the Bill is dropped, there will be no government shutdown. The government will continue to use the Appropriation Act, 2023, to access funds for its expenditures.
"If the Bill is not passed, KRA will still collect the targeted Sh3.4 trillion, minus the 346 billion. It's misleading to tell Kenyans that there will be no money to run the government or build roads. The government will not shut down," he said.
The Appropriation Act guides government spending in the absence of the Finance Act.
In such a scenario, the government can access the presently approved spending estimates.
