Citizens are full of hope for better days ahead after Monday’s Supreme Court ruling that upheld his win in the August 9 elections that had been challenged by his rival Raila Odinga.
Focus now shifts to next week Tuesday Ruto’s inauguration, with a huge task facing the new government, which is taking up an economy choked by a high public debt, spiraling cost of living, high unemployment and struggling businesses in post-covid era.
On Monday, Ruto said: "I want to commit that as soon as we are sworn into office, we will begin the process of implementing our plan."
Households are waiting to see how the new government will address the cost of living with inflation hitting a five-year high of 8.5 per cent in August way above the 7.5 per cent Central Bank of Kenya (CBK) ceiling.
This is mainly on rising food and commodity prices, according to the Kenya National Bureau of Statistics.
Housing, electricity, gas and other fuels index remain high, having increased by 5.6 per cent in the last 12 months.
Flour prices also remain at a historic high of above Sh200 after a short-term intervention by the government last month failed to give the much-needed relief, of bringing down the prices to an average Sh100.
During his campaign, Ruto said he had a solution to the high cost of living, which Kenyans are now waiting on.
He pledged to allocate Sh250 billion to agriculture between next year and 2027, bring down the cost of farm inputs such as fertiliser, and invest in value addition in the sector as a way of improving the country’s food basket.
"We have agreed to concentrate on matters of the economy first by reducing the high cost of living standards," he had said during a rally in Kwale, where he termed failure by the government to empower local farmers as the reason for high food prices.
It will however be interesting to see measures the new government will put in place to tame the run-away inflation, which has been pegged on both local and external factors among them the Russia-Ukraine war.
Ruto dismissed the war as a reason for high food prices.
"Let them not give us excuses about Ukraine-Russia, It is laziness, we didn't assist farmers to produce enough food," Ruto said during his campaign trail.
His ambition to bring down the cost of living, in the short-term, is an uphill task according to economists who foresee continued effects of the war on the local economy, with other global factors playing out.
“Economies are interconnected hence the war is likely to continue having effects on the local economy,” independent economist Tony Watima told the Star on telephone.
The cost of living puzzle also comes at a time Kenya Revenue Authority moves to implements its annual inflation tax adjustment, marked at 6.3 per cent, which will push up commodity and fuel prices by similar margins.
Ruto’s government will have tough decisions to make to bring down prices, and at the same time raise taxes to fund the Sh3.3 trillion budget where KRA is expected to collect Sh2.1 trillion.
The deficit of about Sh862 billion is expected to be funded through borrowing, which also remains a challenge as the country’s debt currently stands at Sh8.6 trillion, against a borrowing ceiling of Sh10 trillion.
One of the measures would be reviewing the Finance Act 2022, according to experts.
“President-elect William Ruto will be well advised to urge the National Assembly to review the Finance Act and ease excessive tax burden on fast-moving consumer goods,” Consumer Federation of Kenya Secretary General Stephen Mutoro said.
A weak shilling against the US dollar also poses a challenge for the new government, as imports remain costly. The local currency weakened to 120.22 yesterday from 120.18 to a unit of the dollar on Monday.
Small businesses are also keen on the “Hustler” administration, which promised a Sh50 billion kitty annually to support SMEs under Savings and Credit Co-operative Societies (Saccos).
According to Ruto, his plan is to ensure that through the “Hustler Fund”, small players such as vegetable vendors (mama mboga) and boda boda operators access credit for growth.
“We are waiting to see if it was an empty promise or it will be actualised,” Olais Mollel, who runs a kiosk in Umoja Estatem Nairobi, told the Star.
The Kenya Kwanza government is further faced with high unemployment in the country where more than a third of Kenya’s youth eligible for work have no jobs according to official data.
Census data shows that 5.3 million or 38.9 per cent of the 13.8 million young Kenyans were jobless in 2020, with high job losses reported during the Covid-19 pandemic.
Funding healthcare, addressing housing shortage, improving the education system and growing industries for job creation is another challenge for the new government.
According to Financial Risk Analyst Mihr Thakar: “All those factors require an increase in productivity and this will mean directing more credit to the private sector, reducing time spent by businesses on bureaucracy and regulatory compliance and increasing competition by targeting state capture and cartels.”
He said there is also need to reduce costs on inputs for manufacturers and maintaining a stable currency and regulatory environment, to ensure that investment risks can be taken by entrepreneurs based on predictable criteria.
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