Raila’s advise to Ruto on how to save economy

By Peter Ochieng

Azimio La Umoja One Kenya leader, Raila Odinga has advised president William Ruto on how to possibly improve the country’s economy.

The former Prime Minister, speaking on Friday during the ‘Transforming a Nation’ conference organized by the Konrad Adenaueur Stiftung Foundation in Nairobi, said most Kenyans are going through tough economic times.

He advised the Head of State to slash his administrations operating budget by at least Sh500 billion, in order to free up resources for more urgent measures aimed at reducing the cost of living.

“To release resources to achieve these objectives, government must cut the budget by an estimated Sh500 billion. The current policies have hit low-income families particularly hard; these are the same low-income families that the administration promised to lift up,” said the opposition leader.

“These families spend more than 40% of their income on food, they deserve and require relief. In particular, we must cut fuel taxes and raise social welfare payments. At this time, we demand tax cuts, not increases; Kenyans need to see their taxes go down, not up. We believe the current taxation regime is not sustainable,” he added.

The ODM party leader insisted that increase of taxes has only led to lower collections by the Kenya Revenue Authority (KRA), thus affecting the economy negatively. He wants taxes reduced.

“We warned at the beginning that, beyond a certain point, increasing taxes leads to lower collection. It has become real as KRA misses one revenue target after another. Tax on fuel is up, but fuel levy collection is down,” said Raila.

During his first address to Parliament in September, 2022, President Ruto instructed the Treasury to reduce his predecessor, Uhuru Kenyatta's, last national budget by Sh300 billion.

"Over the next three years, we must go back to the situation where the government contributes to the national saving scheme. To this end, I have instructed the Treasury to work with ministries to find at least Sh300 billion in this year's budget because the market cannot sustain the kind of borrowing adopted as a government," he announced.

However, it is not clear whether the budget was really reduced.