What you need to know:
- Dr Ruto actively pushing for the creation of a chief administrative secretary (CAS), a position that the High Court had declared unconstitutional.
- The President said the Hustler Fund money will attract a single-digit interest on top of placing conditions for the the-would-be beneficiaries.
- In his Mashujaa Day speech on Thursday, Dr Ruto indicated that ‘hustlers’ will have to participate in a pensions programme in order to access cheap credit.
President William Ruto’s five weeks in office have been characterised by major policy contractions and U-turns on some of the lofty promises that were made during campaigns.
President Ruto – who swept to power on the platform of lowering the cost of living – had promised that his election to the top seat would be an economic moment and not a chance for the political class to create positions for themselves.
But slightly more than a month in office, the cost of living has continued to go up with Dr Ruto actively pushing for the creation of a chief administrative secretary (CAS), a position that the High Court had declared unconstitutional, on top of reneging on his promise for an interest-free hustler fund.
President Ruto had also promised to lower fertiliser prices to Sh2,500 per 50kg bag but has made a U-turn and capped the price at Sh3,500 while blaming the global market dynamics.
In the run-up to the August 9 polls, Dr Ruto promised a Sh50 billion hustler kitty to allow small businesses access to an interest-free credit facility.
“Kenya Kwanza will dignify the business of every ordinary Kenyan. That is why we are setting up a Sh50 billion Hustler Fund so that small enterprises can access interest-free credit to facilitate their growth, hence supporting more livelihoods,” Dr Ruto had said on July 26.
Hustler Fund interest
This has since changed after the President said the money will attract a single-digit interest on top of placing conditions for the the-would-be beneficiaries.
In his Mashujaa Day speech on Thursday, Dr Ruto indicated that ‘hustlers’ will have to participate in a pensions programme in order to access cheap credit.
“All borrowers on this platform will also participate in a short-term savings plan and long-term pensions programme,” President Ruto said. Last weekend he said, "On December 1 we will launch the Hustler Fund and so it is up to you now to organise yourselves into chamas, Saccos, cooperatives or individually. It is not free money, it is business money that you will repay…repayment will be at less than a 10 per cent interest," said President Ruto.
At the same time, the Central Bank of Kenya’s (CBK) latest data that shows the cost of loans from commercial banks has hit a 33-month high due to the increase in the base lending rate.
Data from the CBK shows the cost of loans from commercial banks hit 12.38 per cent in August which is the highest rate since November 2019. This development will see banks charge even more for loans.
The ongoing recruitment for CASs is also set to balloon the public wage bill at a time the new administration has repeatedly said that it cannot implement some of its pre-election pledges due to a “dilapidated economy”.
The President has also created Prime Cabinet Secretary position to be occupied by Amani National Congress (ANC) leader Musalia Mudavadi.
Mr Mudavadi has since been vetted by Parliament pending approval and subsequent assumption of office.
Taxpayers are expected to spend millions of shillings to refurbish an expansive office at Railways for Mr Mudavadi on top of paying salaries to staff that would be hired in the new office and those of CASs.
Dr Ruto had opposed the Building Bridges Initiative (BBI) on the basis that it was meant to create positions for the political class at the expense of the struggling common man.
“They told the country that this will be an economic moment, not a constitutional moment. You can see now they are going against court orders to create positions. Let them be bold enough to push for constitutional amendments to regularise the positions they are busy creating,” said Homa Bay Senator Moses Kajwang’.
“The 30 days in office has been characterised by the high cost of living, high cost of fuel and all manner of things that they promised to fix,” added Senator Kajwang’.
"Trial and error"
National Assembly Minority Leader Opiyo Wandayi said the new administration appears to be operating through trial and error as there was no coherence in some of the policy actions taken in the last 30 days.
“This seems to be a government that is characterised by contradictions and fallacies. From the look of things there is no coherence in policies,” said Mr Wandayi.
“Today they talk of the rule of law, the next day they defy court orders. During campaigns they told us the priority would be to support hustlers, today they are creating jobs for big boys and girls,” he added.
But Belgut MP Nelson Koech, an ally of Dr Ruto, defended the Head of State saying the Kenya Kwanza government is committed to performance and efficiency.
He said that it should not be construed that the creation of CAS is about increasing wage bills, arguing that no country globally does not have assistant ministers.
“There is no country in the world that has no assistant ministers, the US has deputy secretaries and the UK has Ministers of State. The 22 ministers envisaged in the constitution can only do so much given that they are human, get sick, have families and can't be in two (2) places at the same time when Kenyans need them. Even principal secretaries are assisted in administration by principal administrative secretaries and secretaries,” said Mr Koech.
Dr Ruto has also failed in honouring his election campaign pledge of giving 50 per cent of the cabinet slot after he only had eight women portfolios.
In June, in the run-up to the August polls, Dr Ruto signed a charter with women at Nyayo Stadium, where he promised them 50 per cent of his cabinet.
In July, President Ruto said charging Kenyans to use a road was an unnecessary tax burden to the citizens, something which his administration would not do.
“You don’t charge people for using a road… We are going to deploy the highway to be available to as many people as possible so that we can remove all the spaces where there is taxation. Taxation will be taken to products, not the highway,” said Dr Ruto then.
But now, incoming Transport Cabinet Secretary nominee Kipchumba Murkomen said that the government will introduce tolling on a number of highways, a complete reverse of what Dr Ruto promised before the elections.
"Tolling is not an extra charge, it’s a saving. If you look at the expressway you'll find that it takes a shorter time to move from one end to the other meaning that you have saved time that sometimes would be three hours. You realise that the cost of staying at Mombasa Road for three hours will come to a certain figure and that will save you when it is reduced to 20 minutes but most importantly you save a lot on fuel," said Mr Murkomen when he appeared before the Committee on Appointments for vetting.
He added: "We should be able to identify our high-density roads and then put in place a tolling policy with a fee that is charged and commensurate with the savings that the motorist will get. If we raise enough revenue to maintain these infrastructures that we are going to develop, we can then save from road maintenance levy and other sources of revenue to go and construct roads in other parts of the country."
Vihiga Senator Godfrey Osotsi warned Kenyans to brace for tough times since there were no signs the cost of basic commodities would go down anytime soon.
Mr Osostsi said Kenya Kwanza Alliance has only succeeded in rewarding political loyalists with positions but has abandoned the common man, whom the alliance rode on to power.
“Some of their policies are not well thought out. When he talks of slashing Sh300 billion from the budget; it is going to cause distortion in the economy. He has also told KRA to collect more taxes. This means hustlers will be taxed more, contrary to the promises they made,” said Mr Osotsi.
“It is very clear that the much talked about plan by Kenya Kwanza was a ploy. Clearly, they have no coherent plan to deal with the country's problems including addressing high wage bills,” added Mr Osotsi. Recently, Deputy President Rigathi Gachagua asked Kenyans to give the administration two years to turn around the economy. He said most of the tax collected is being used to service loans, leaving nothing to finance projects.
“We have inherited a dilapidated economy. We will be calling on all of you to bear with us because it is not easy,” said Mr Gachagua on Wednesday during the induction of the 49-member education reforms task force.
He added, "We are having a big challenge in terms of raising funds for government programs. What we are collecting from the Treasury, all of it is going to service debt and pay salaries."
Additional Reporting by Brian Ambani