Wins, fumbles and in-betweens for President and the country

President William Ruto. [Edward Kiplimo, Standard]

This year gave the country glimpses of what to expect of President William Ruto’s administration.

On many fronts, it was a difficult start for him, with local and international factors combining to make for a complicated ride. Yet Dr Ruto’s administration can boast a number of key decisions they expect will lay the groundwork for critical interventions in the foreseeable future, which will effectively cement his legacy.

Taxes and demos

Early in the year, Azimio la Umoja called for mass demonstrations, protesting the rising cost of living. As thousands flooded streets paralysing business, anti-riot police retaliated with brute force, killing tens. After one particularly deadly faceoff, Interior Cabinet Secretary Kithure Kindiki warned that the protests, which he referred to as a “culture of impunity”, had to be stopped after six people lost their lives within a day.

The protests escalated following the tabling of the Financial Bill, 2023, in Parliament and eventual signing into law by the President on June 26. The law was gazetted the following day.

It introduced a housing levy, which requires both employers and employees to contribute to the National Housing Development Fund.  

While the Bill had proposed that the contributions be refundable or be used to finance purchase of houses under affordable housing, the legislated change is a non-refundable levy of 1.5 per cent payable by both the employer and employee.

The Act also introduced new PAYE tax bands, with 32.5 per cent charged for incomes between Sh500,000 and Sh800,000, and 35 per cent for income exceeding Sh800,000. 

There was also an increase in the VAT on petroleum products (excluding LPG gas) from 8 per cent to 16 per cent. This not only led to a spike in prices at the pump but had an impact on the cost of production, and consequently a strain on consumer spending.

A new requirement to remit withholding tax to the Kenya Revenue Authority within a five-day period was also highly debated, with the government blamed for going too hard on business people in its quest to hit its tax collection targets.

El Nino and climate discussions

Early in the year, the Food and Agriculture Organisation warned of a possible return of El Nino in East Africa. The Kenya Meteorological Department later confirmed the same, with the rains expected between October and January.

But as October approached with only light showers and high temperatures being experienced, doubts started creeping in about the correctness of the weatherman’s prediction. President Ruto himself said, on October 22, said the Met Department had scaled down its El Nino alert to short rains.

"You see the Department has now said there will be no El Nino, we will only have significant rains, which is even better for us to get to our farms and produce more. Now see, we have more rains than we have had in four years, that is God's doing," he said, crediting prayers he conducted at the Nyayo National Stadium earlier in the year.

The El Nino rains finally came, killing many and devastating livelihoods. By December 20, the figure of casualties was 174. As the torrential rainfall flattened households, the national and county governments had a war of words over their roles in saving lives and property.

Nairobi had earlier in the year hosted the inaugural Africa Climate Summit. On September 4 to 6, delegates from around the globe convened at the Kenyatta International Convention Centre (KICC) for the summit organised by Kenya and the African Union Commission.

Held alongside the Africa Youth Climate Assembly and Africa Climate Week, the summit gave African leaders a platform to discuss, and stress, the importance of decarbonising the global economy for equality and shared prosperity.

“They also called for investment to promote the sustainable use of Africa’s natural assets for the continent’s transition to low carbon development and contribution to global decarbonization. Leaders expressed concern that many African countries face disproportionate burdens and risks from climate change related, unpredictable weather events and patterns. The impacts have included prolonged droughts, devastating floods, wild and forest fires, which cause massive humanitarian crises with detrimental impacts on economies, health, education, peace and security, among other risks,” wrote Diplomacy, a publication of the Ministry of Foreign and Diaspora Affairs.

This was a precursor of Cop28, held in Dubai, where Kenyans took issue with the fact that 765 Kenyan delegates attended, a move termed as profligate and against the spirit of austerity that Ruto promised.

Of those, 368 were party delegates, while 397 were overflow delegates.

As the debate on environmental conservation and climate change rages on, the government has shown a willingness in preserving Kenya’s flora and fauna and reviving forests. Kenya has lost 68 per cent of its wildlife in the past four decades, said Sheila Mulili, conservation policy advisor, and in the spirit of reversing this unwanted trend, on November 13, Kenya marked a National Tree Planting Day.

Discipline and reshuffles

When President Ruto came to power, there was a palpable change in the way of doing things, including his insistence on punctuality and early morning activity, especially meetings.

So much so that in late July, he locked out Cabinet Secretaries who were late to an 8am meeting at the State House, with stern warnings following. DP Gachagua said to the leaders:

“You can't arrive at an event when the President is already seated. Why would you come late? How do you explain that? Who did you go to see and yet today was the most important day for you to sign contracts?''

Those locked out were also required to write apology letters explaining their lateness. Insider reports indicated that in subsequent meetings, some of which happened outside Nairobi, the leaders were able to keep time, fearing further, and more serious, repercussions.  

In the same vein, with doubts over performance, the President, on October 4, reshuffled his Cabinet. The aim, he said, was to enhance delivery as set out in the administration's manifesto, dispelling claims that some of the CSs were targeted.

Among those moved were Foreign Affairs CS Alfred Mutua, who is now at the Ministry of Tourism and Wildlife. His docket was taken over by Prime Cabinet Secretary Musalia Mudavadi.

Moses Kuria also ceded his Trade Investments and Industry ministry and took over Public Service, Performance and Delivery Management. He was replaced by Rebecca Miano, who left the East African Community, the ASALs and Regional Development docket.

The tottering shilling

In a year that the shilling faced blow after another, the exchange rate against the dollar hit Sh156.46 yesterday, a new all-time high. The rate was 123.3 exactly a year earlier. A dollar shortage hurt importers who, in black markets, had to cough up more for the greenback, with hoarders, who were warned of potential losses, unwilling to release their dollars into the market.

It was to cushion the blow on the shilling that the President entered into a government-to-government import credit scheme under which Kenya signed an oil deal with Saudi Aramco, Abu Dhabi National Oil Company and Emirates National Oil Company in March, effectively switching from an open tender system, which had local oil companies bidding to make imports every month.

This move, which has been since criticised viciously by the Opposition, was to hold the pressure on the shilling amidst the shortage of the dollar and the dwindling value of the shilling.

The Central Bank Rate hit 12.5 per cent this month, increasing the cost of borrowing and slamming brakes on inflation, which finally went down to 6.8 per cent, within the CBK’s target range. The last time it was anything above 12 per cent was in September, 2012, at 13 per cent.

The public debt stock recorded 23.7 per cent growth from Sh8.56 trillion reported on September 30, 2022, to Sh10.59 trillion as of September 30 this year, attributed to loan disbursements and the weakening of the shilling against the major world currencies, said the Controller of Budget. The public debt stock comprises Sh4.92 trillion from domestic lenders and Sh5.67 trillion from external lenders.

During the first three months of this financial year, the Controller of Budget identified various challenges that hindered effective budget implementation. They included low revenue performance, ‘hidden’ budget deficits, low budget absorption, a spike in travel expenses and an increase in outstanding pending bills

“To address these challenges, the Controller of Budget recommends that the National Treasury enhances revenue mobilisation, re-align the budget through supplementary processes to match the revenue trends and make budget cuts for non-essential expenditures, inefficient programmes, and projects with low socio-economic impact,” the report noted.

The national government spent Sh784.18 billion in the first three months of the 2023/2024, with Sh700.48 billion of the amount being recurrent expenditure. Economic Planning and Roads departments had the highest spend, with over Sh13 billion each.

Kenya received its highest ever monthly diaspora remittances’ amount of $378.1 million in July, according to CBK. But as President Ruto aims to bring the annual amount to $10 billion, he has promised to find thousands of Kenyans jobs abroad and has had meetings to discuss the same with a number of foreign leaders.

On October 31, King Charles III, came to Kenya and said that he was deeply regretful for the “abhorrent and unjustifiable acts of violence” committed against Kenyans in the struggle for independence.

As the country targets more foreign revenue, President Ruto, in his Jamhuri Day speech, promised that Kenya would be a visa free country beginning January.

Kenya is the cradle of mankind, he said, and global citizens would be returning where they belong. A digital platform to identify tourists prior to their visit, meaning they will only need to obtain electronic travel authorisation, will, however, be put in place.

Kenya turned 60 on December 12. When it gained independence in 1963, the population was around 8.9 million and is now at an estimated 53 million.

Privatisation

This year, the government proposed privatisationo of 11 companies. These are the Kenya Literature Bureau, National Oil Corporation of Kenya, Kenya Seed Company Limited, Kenyatta International Convention Centre, Mwea Rice Mills, Western Kenya Rice Mills, Kenya Pipeline Company, New Kenya Cooperative Creameries Limited, Numerical Machining Complex, Kenya Vehicle Manufacturers, and the Rivatex East Africa.

This move was aimed at helping in the government’s efforts for fiscal consolidation and spurring economic development, including raising of additional revenue and reducing the demand for government resources among many demanding and competing needs.

Blackouts

In a year marred with complacency, three major national power blackouts hit the country, crippling activity in hospitals, schools, factories and airports.

On August 25, a national power blackout lasted nearly 20 hours. Kenya Airports Authority Managing Director Alex Gitari was fired by Transport Cabinet Secretary Kipchumba Murkomen over the lack of timely backup solution at the JKIA.

After a second blackout on December 10, Murkomen said the airport had replaced the time-based system with a logic-based system that would allow a quick and effective switch to backup power when needed.

“Manual interventions have been put up, faulty control systems rectified, cabling systems expanded, and inverters installed to avert blackouts at the airport by allowing a 15-second transition time,” he said.

Not long before, a video showing a leaking roof that paralysed check-in activity was trending, attracting mockery from neighbouring countries and a round of social media banter.

Political drama and profligacy

In what has been a long year in her political career, Meru Governor Kawira Mwangaza was, for a second time, impeached by her county assembly after 59 members voted to throw her out. The Senate saved her yet again, clearing her of accusations of misuse of public resources, nepotism, bullying, usurpation of statutory powers and contempt of the assembly were some of the core accusations.

Barely a week after, members started another round of campaigns amongst themselves to impeach her yet again, with insiders saying the members of county assembly decried the Senate decision’s as unfair and unreasonable.

There was also a lot of attention on the President’s foreign travels, with Ruto having travelled to over 40 countries in just over a year into his presidency. He was faulted by what many termed profligate spending, but he insisted he was journeying for the benefit of Kenya.

“I have toured many parts of the world and I have travelled with a plan. I am not a tourist. Because for this country to change it has to be changed and that is done by thoughts and plans," said Ruto.

Haiti mission

It has also been a year in which debate has ensued on Kenya’s role in the stability of Haiti, where it has pledged to send 1, 000 police officers in support of a multinational security support mission.

The Caribbean country is famous for its notorious gangs, which have seized critical infrastructure and which have rained chaos on citizens. Police there lack necessary equipment to combat the gangs, which were responsible for the assassination of Jovenel Moise, the president, in 2021.  The High Court in Kenya has, however, extended a block to send the police, with a ruling set for January 26.

The year has been a cocktail of events, with Ruto’s government, which was inaugurated in September last year, facing intermittent spells of storm and calm. While doubters have written a damning scorecard and sounded alarm, those who cling onto hope insist that tough decisions made today will make for an easy cruise in the future. The country bides time and waits to see what 2024 brings, with political foreseers already making predictions for 2027.