Raila: Kenyans worse off than 14 months ago when Ruto took over

"A year after the election, if you ask Kenyans 'Are you better off today than you were at this time last year?' the answer would be obvious that we are in a deep hole... There is a devastating loss of trust in our economy, our financial market and our government," said Raila.

The Azimio la Umoja-One Kenya leader faulted Ruto's tax increases which he said are pushing Kenyans to the brink, accusing the head of state of playing deaf to the plight of Kenyans.

"The country is going through a recipe of policy mistakes, failures and shortcomings served in an authoritarian paternalistic leadership style. Nobody in government cares about building broad public support for these programmes. Everything is forced down everyone's throats," Raila added.

His remarks, which tore down bits of Ruto's address in Parliament, came in the wake of assertions by the Head of State that he had laid the foundation for rapid growth. Raila pointed out the biting cost of living, failing revenue targets, fleeing foreign investors and the weakening shilling as among indicators that point to a dire situation that the president was non-committal about solving.

While stating that "there was no end in sight" for Kenya's economic troubles, Raila said that he had warned about Ruto's Hustlers vs Dynasties narrative during the campaigns.

"We warned that Kenya Kwanza was never going to help the hustlers by robbing the rich and the middle-class... we are concerned that it is getting too late to change the course. We fear that consequences of the foundation laid down in the first year of this administration could linger for years if nothing is done," said the former Prime Minister.

He also raised concern that job cuts, resulting from increased operation costs and lowered demand for products were caused by Ruto's tax policies. "According to a Central Bank survey, more than a quarter of chief executives expect to cut jobs before the end of the year... setting up families for a gloomy festivities period," the former Prime Minister said, also citing a recent ranking of Kenya's security exchange as the worst in the world in dollar returns.

"Investors prefer countries with a stable taxation policy, a stable currency and a growing economy. The current regime is changing the tax policy frequently, mismanaging the shilling and weakening economic growth, Raila added.

Raila also tore into Ruto's Hustler Fund flagship programme that he said has created some Sh2.9 billion in nonperforming loans.

"At the Hustler Fund, which was supposed to support households and microenterprises, default on payments are at a higher rate than those at the commercial banks, Saccos and microfinance. Out of the Hustler Fund's outstanding Sh10.2 billion worth of loans in the last nine months, 29 per cent is deemed to be portfolio at risk, implying it has not been serviced by the borrowers as per the agreed schedule," he added.

Raila wants the fund reviewed by a forum comprising the government, political parties, the business community and civil society to improve its effectiveness. He wants such forums to review similar initiatives.

He also criticised Ruto's housing tax, saying he should have focused on investing in direct relief programmes, such as the Kazi Mitaani initiative and improving schools' infrastructure. Raila further blamed the drop in fuel consumption the resulting dip in revenue collection, and the reduction in companies paying corporate tax on the government's punitive tax measures.

He proposed a Sh500 billion budget cut to aid in easing the nation's financial strain, coupled with a debt-rescheduling approach that Raila wants the government to adopt to spare Kenyans from "punitive taxes and create room for critical social and economic spending".

On Thursday, Ruto said Kenya would be able to settle the first $300 million instalment of the US$2 billion Eurobond debt by next month.

He also championed tax and interest cuts and a widening of the tax basket, citing interventions by former President Mwai Kibaki's Narc government of 2002, which he said came into office under worse economic times.

At the heart of Narc's economic transformation, he said, was a strategic fight against corruption that yielded higher revenues, some of which funded 95 per cent of development expenditure.

"Transforming a nation takes hard, dedicated and honest labour of leaders and citizens. No nation is beyond reconstruction and transformation. All it takes is leadership," said Raila,.

On graft, Raila wondered why action is yet to be taken on revelations by Controller of Budget Margaret Nyakang'o on budgeted corruption through inflated salaries.

Wiper Leader Kalonzo Musyoka said the nation is in a state of "hopelessness". However, his speech focused more on the relevance of dialogue in addressing the nation's issues.

"We went to Bomas because Kenyans lost their lives... Let us not forget that we buried nearly 70 people. Let us not forget a lot of them had their households and everything destroyed," said Kalonzo.