In a State of the Nation Address on Wednesday afternoon, the Kenyan Head of State stated that the people of Kenya had spoken, and he had "conceded" and agreed with lawmakers to withdraw the contentious Bill.

"Having reflected on continuing the conversation around the Finance Bill, and listening to the Kenyan people who say they want nothing to do with this Bill, I concede.

"Therefore, I will not sign the Finance Bill 2024 and it shall be subsequently withdrawn and I have agreed with these members, that shall become our position," President Ruto stated.

He announced several austerity measures to contain government expenditure, starting with the Office of the President and the Executive. These include reduced spending on travel, hospitality, the purchase of motor vehicles, and renovations.

"I direct that operational expenditure in the Presidency be reduced to remove allocations for the confidential vote, reduce travel budget, hospitality and purchase of motor vehicles, renovations and other expenditures," President Ruto stated.

The Finance Bill 2024 sought to raise $2.7 billion in additional taxes for the government.

At least five people were shot dead by the police and a dozen others were injured in the violent confrontation in and outside parliament precincts, according to Amnesty International.

The international community, led by the United Nations (UN) and the African Union (AU), condemned the violent protests and called on the authorities to exercise restraint while also urging peaceful demonstrations.

Retired President Uhuru Kenyatta and former Prime Minister Raila Odinga also pressured Ruto’s administration to listen to the people, especially the young people "Gen Z" who comprised the majority of the protesters.

In the spirit of the proposed dialogue, President Ruto has pledged to engage Kenyan youth to hear their perspectives and concerns.

"I propose an engagement with young people of our nation to listen to their issues and agree with them on their priority areas of concern," he added.

The Kenyan Head of State also emphasized the need for a multi-sectoral conversation about the public debt and the country’s future.

"I also propose that within the next 14 days, a multi-sectoral, multistakeholder engagement be held with a view to charting the way forward on matters relating to the content of the Bill as well as auxiliary issues raised in recent days on the need for austerity measures and strengthening our fight against corruption."

Debt distress

In his address on Wednesday, President Ruto acknowledged that the Finance Bill 2024 is among the painful measures the government has had to take since assuming office in September 2022 to maintain Kenya’s creditworthiness in international markets.

Currently, the country’s debt burden stands at 68% of GDP, which exceeds the World Bank and International Monetary Fund’s recommended threshold of 55% of GDP.

Pressure from Kenyans last week saw the Head of State allow several amendments. These included the withdrawal of proposed 16% VAT on bread, a 2.5% motor vehicle tax increase, and a hike in the tax on mobile money transfers from 15% to 20%.

Additionally, the proposal to introduce a Ksh150 per kilogram eco-tax on plastic packaging materials, batteries, and hygiene products such as diapers and sanitary pads was dropped.

This, however, did not stop the demonstrations as protesters demanded the withdrawal of the entire Bill.

The Kenyan Head of State stated that the people of Kenya had spoken, and he had "conceded" and agreed with lawmakers to withdraw the contentious Bill.