• Government debt has soared in the last decade and oil marketers are owed Sh7.5 billion in unpaid subsidy
• The best way to reduce income inequality is to provide free high-quality education and health services for all
New President William Ruto faces a huge challenge. He has promised to raise living standards for the 'hustlers' but the economy is in a terrible mess.
Total government debt has risen from around $12 billion in 2013 to over $72 billion in 2022. The cost of repaying this debt will severely cramp the new President.
Nevertheless there are expectations that the new government will introduce subsidies to bring down the cost of fertiliser.
A fuel subsidy has brought down the price of a litre of petrol from around Sh180 to Sh160. Government has not remitted Sh7.5 billion in subsidy to the oil marketers and there are rumours that fuel shortages may return very soon. A maize subsidy has just lapsed so the price of unga is about to go up.
Price inflation is not popular but government clearly cannot afford to subsidise essential products.
Kenya is a very unequal society but the best way to help the masses is to invest in high quality education and health services for all Kenyans. That is what President Ruto should do rather than fall into the trap of increasing subsidies to temporarily reduce the cost of living.
Quote of the day: "He who fears he shall suffer, already suffers what he fears."
Michel de Montaigne
The French philosopher died on September 13, 1592