Azimio accuse Ruto of reckless borrowing, propping up the dollar
The opposition Azimio La Umoja One Kenya Coalition Party on February 22, 2024, accused President William Ruto of double taxation, reckless borrowing and propping up the American dollar. The Coalition found that economic policies under Kenya Kwanza’s Budget Policy Statement, 2024, remain flawed and unachievable, and that Kenyans must prepare for a second wave of double taxation plans.
“As a Coalition Party, we believe that Kenyans will thrive when we cut, not when we increase taxes. The BPS reveals lofty figures in terms of revenue with huge deficits. We believe that the country will thrive when the regime moderates its expenditure, reduces wastages and adopts a rights, and zero-based budgeting approach,” read a statement from Azimio.
On the dollar vs the Kenya shilling, Azimio were of the opinion that the “once mighty currency in the region has received severe beating,” and that President Ruto’s government was propping it up using superficial means.
“The shilling has lost its value against the US dollar. The shilling lost its value against Tanzania and Uganda shilling. Recently announced an artificial situation in stabilizing the Kenya shilling against the dollar. Today the exchange rate is still fluctuating at around Kenya shillings 150 to the US Dollar. Kenya must never be excited about these artificial, superficial and unsustainable moves by Kenya Kwanza to stabilize the dollar against the Kenya Shilling,” continued the statement.
Propping up its currency reserves, in this case of Kenya allegedly propping up the dollar, means that a Central Bank uses its foreign currency reserves to buy government bonds in the open market without involving any actual currency exchange.
The Bank can then also create an artificial demand for the currency.
Another means of propping up local currency against foreign exchange is by the government fixing a nation’s currency to a specific value against another currency or several other currencies. This affects the domestic currency value in the international market.
“If you recall, in August 2022, the shilling was trading at 120 for one US dollar. One and a half year later, the shilling is trading at 150 against one US dollar. The fall and instability of the shilling come with a great price that includes escalated costs of imports including food. It puts tremendous pressure on parents seeking to take their children abroad or those who want to seek treatment outside the countries. The free fall of the shilling is, therefore, a grand betrayal of the people of Kenya by the Kenya Kwanza regime. A perfect example of a race to the bottom by the regime,” added the Azimio statement.
Kenya has been enduring a dollar shortage since 2023, leading to an increased cost of living affected by high import costs of goods. The dollar is majorly used in the import/export business across the world.
In the end, Azimio also touched on Kenya Kwanza’s borrowing and increased expenditure on non-priority things such as budgeting Sh 600 million for the renovation of DP Gachagua’s Karen residence and Sh 780 million to renovate State House and State Lodges.
“The regime resorted to more borrowing, ignoring the warnings that we are in debt distress and at the risk of debt default. Without blinking an eye, the regime went against its promise to reduce borrowing and did the complete opposite today KK regime has borrowed close to Ksh2 Trillion in just one and half years. If this is not a race to the bottom, then we don’t know what it is.
Fellow Kenyans, there are strong indications that things will get worse. As a coalition, we, however, refuse to ask you to tighten your belts again. You have done enough. The ball is squarely in the court of the regime. They either act swiftly and lower the cost of living b reducing taxation, wastages, and wanton theft of public money or await the fate that has fallen other insensitive and incompetent regimes across the continent,” concluded the statement.
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