Kenya is “out of debt distress”, claimed its president, William Ruto, on Tuesday, praising his economic policy despite public anger at tax hikes and subsidy cuts.
The country of 53 million inhabitants, the economic powerhouse of East Africa, is now “out of debt distress”, said the head of state in Nairobi at a public ceremony marking 60 years of independence for the former British colony.
“We have made the right choices, sometimes taking very difficult and painful decisions, to steer Kenya away from the brink of a catastrophic abyss of debt distress and set our country on a new course,” he added. Ruto gave no figures on the current level of public debt but pointed out that gross domestic product (GDP) had grown by 5.4% over the past six months.
The Kenyan economy was severely shaken by COVID-19, followed by the shockwaves of war in Ukraine and a historic drought in the Horn of Africa, resulting in empty coffers, galloping inflation, and a plunging currency.
At the end of June, the country’s public debt stood at over 10,100 billion shillings (64.4 billion euros), according to Treasury figures, or around two-thirds of gross domestic product.
The cost of servicing public debt has risen sharply with the collapse of the Kenyan currency. And in June 2024, Kenya must also repay $2 billion in Eurobonds.
After his election in August 2022, William Ruto introduced a series of new taxes, going against his campaign promises. Opposition protests against these new tax measures organized between March and July, resulting in dozens of deaths.
The Head of State also reduced the subsidies – notably on petrol – introduced by his predecessor Uhuru Kenyatta, claiming that he preferred to subsidize production rather than consumption.