Government battles to balance budget after deadly protests

Kenya widened its estimated budget gap by 28% just two months into the fiscal year as the Finance Ministry struggles to stabilise its strained public finances, Treasury Secretary John Mbadi said. Moneyweb reports that National Treasury forecasts a budget deficit of 767bn shillings ($5.95bn) in the year through June 2025, Mbadi said. The revision comes after deadly anti-government protests forced President William Ruto’s administration to withdraw contentious tax measures that would have raised revenue for the East African economy. ‘The government is operating under a constrained fiscal environment,’ said Mbadi, who took over as head of the Treasury last month after Ruto reorganised his Cabinet to include members of the opposition. ‘We are barely managing the 2024-25 budget.’ Kenya’s Government has been under pressure to shore up tax collection and slash borrowing under a $3.6bn funding programme first agreed with the IMF in 2021 to address the nation’s debt vulnerabilities. It has since updated its budget-deficit forecast several times. Initially, the Treasury said the shortfall would narrow to 3.3% of GDP, and made a number of subsequent changes before finally raising the projection to 4.3% of GDP on Monday.

Full Moneyweb report