Kongole kwake. Naitafuta hii hotuba na nitaiweka hapa soon.
=
President William Ruto's Address on Fiscal Policy and Economic Progress
I am very happy as a leader in Kenya that we are having a conversation about taxes and about debts and about what we need to do about it. This is the best thing that has happened to Kenya, that we are having a conversation on issues that are of the nature of our country. Today, Kenyans know there is something called Finance. Today, Kenyans know that we have a debt problem. Today, Kenyans know that there is a connection between the taxes we raise and the services we get, and the difference it makes in us not exposing our country to debt. That's a very good place to be. Let us continue this conversation.
Secondly, I am also very happy because we are beginning to see institutions working in Kenya. As the executive, we have made proposals to the legislature. The legislature has interrogated those proposals. The public has interrogated those proposals. The public has recommended, through public participation, their feelings, their ideas, their suggestions, and because the people's Representatives have listened to the people through public participation, they have adjusted the proposals from the executive. We are now going to end up with a product in Parliament that came from the executive, interrogated by the legislature through public participation. The people of Kenya have had a say on it. It will go to the floor of the house, and we have a very robust system of governance in Kenya.
Last year, when we passed the proposals, they even went to court. The court adjusted some of the proposals we had made. In fact, they suggested to us to make a law to underwrite the housing fund, which was a positive suggestion, you know, from our Judiciary. So the fact that the executive is working, the legislature is working, the Judiciary is working, institutions are working in Kenya, that is a very proud country, and I want to belong to them.
There's no tax on bread, there's no tax on all the other issues that were mentioned, diapers and all this, because we want to protect our own local manufacture. However, let me ask this Gathering, I want and I want members to listen to me very carefully, I also want you to help me manage one thing: tax expenditure. Let me explain why. Tax expenditure is the money we pay out after we have collected taxes. We pay out as VAT returns, VAT reimbursements. You know, do you know how much money we are paying? 400 billion. That's the amount of money we're paying. So, 400 billion after we have collected the money, we pay to some companies. Surely, 400 billion, that's the amount of money we're spending. We want to seal all the loopholes for these people coming to claim fraudulent claims of VAT from the government.
We had a challenge with the exchange rate, and the challenge with our exchange rate is contributed to a great extent by importing things we should be producing locally. You know, there cannot be any bigger shape of madness: importing things that you can produce locally. By importing those things, we are exporting our jobs, we are exporting our foreign exchange. We are... I mean, so if you read between the lines what Kimani Ichung'wah was saying, he was insisting on protecting local manufacturing, local manufacturing, because that way we convert our own labor into products, we convert our own electricity into products, we convert our own talents into products, and we stop hemorrhaging our foreign exchange.
The reason why you see stability in the foreign exchange space—it was 167, it's come down last week, it is at 128—it is because we have reduced importing things that are not necessary and instead substituting those ones with the things we are producing locally. Let me give you two examples of some of the difficult but right decisions you made last year. We made a decision on housing levy. Friends, let me tell you this: when you go home, go write down somewhere, you will put it in your memoir that you were among the people who made the decision to have a housing levy, because that housing levy, 10, 15 years from today, the kind of transformation that will be in Kenya, the eradication of slums, the transformation of our housing, the transformation of our country, people will ask who are the people who made this decision.
Other countries made that decision many years back. That's why they are where they are. We kept on talking in Kenya, "Oh, you see, we started with Malaysia." Singapore was like us. In fact, Singapore was a slum like us. If you look at the pictures today, Singapore is in the first world because they made the right decisions. You have already begun to see. I want to challenge you: go to Ruiru, go to Mukuru and see what the housing levy is doing. In Mukuru alone, a small place, we are doing 14,000 units. We will possibly decongest maybe 20, 30 acres of a slum into that small place. We are building 86 blocks of 11-story buildings, housing in one place, and we are going to do that across Kenya. You've seen what is happening. We are now roughly at 100,000 units that we are building around the country, and this is just year one. 20 years from today, you will be very proud people that you are the Parliament that made the housing levy possible.
Last year, we had a difficult time with a budget, true or not true? We had a difficult time, but let me report to you that we made the right decisions. Kenya today, Kenya today is respected globally because of the decisions we made. If we hadn't made those decisions, this country would have defaulted, but today I go to many meetings and many leaders ask me, "How did you people in Kenya do it? How did you manage?" Today, as I talk to you, as was said by the chair of budget, from where we were last year, our economy grew by 5.6%, the 27th fastest-growing economy in the world. When we came into office, inflation was at 9.2%. By May last year, it was 8%. By April this year, it was 5%. It is because of the decisions we made, difficult as they were, but they are putting this country on the right trajectory.
When we came in, we found a fiscal deficit of 7.2%. That year, we were going to borrow 1.1 trillion. Imagine, 1.1 trillion. We had to cut down 300 billion. When we came in last year, we reduced to 690 billion. This year, we are reducing that gap. We've now brought it down to 3.4, maybe 3.5%, and I promise you, God willing, in 3 years we want to have a balanced budget, that we will only spend the money that we have. That's where we must go, good people, and we are... you can see we're heading there. We came from 9.2, we came to 5.7, we came down, now we are at 3 something. Next year, we want to take it to 2 something, the other year 1 point something, zero, then we have a balanced budget.
