President William Ruto yesterday defended the Finance Bill 2023, which sailed through the Second Reading last week when Members of the National Assembly voted 176 in favour against 81 who opposed it.
The President said the Bill, which includes a housing tax pegged at one per cent of formal sector workers’ gross pay, would cushion the country from external debt, now hovering at about Sh9 trillion.
He said the government’s resolve is to put up housing units that will create jobs and other opportunities to over one million youths every year while also upgrading informal settlements and giving tenants in urban areas a chance to own a low cost house.
“We should choose to either emulate Mwai Kibaki — who expanded the tax-base and raised sufficient funds to grow the economy — or take the route of handshake regime that incurred external debts. We have chosen the route of taxation,” he said, even as he took a swipe at critics of the legislation, accusing them of misleading the public on the proposed taxation measures, which will go through the Third Reading in Parliament tomorrow.
The President admitted that the cost of living had reached alarming rates but that the only way to reverse the situation was to empower farmers to boost food production. To this end, he said, the government had enlisted five million farmers into the fertiliser subsidy programme through which 3.5 million bags of affordable fertiliser have been released in a to enhance production.
“It is true that many Kenyans are suffering due to the harsh economic times,” the President said, acknowledging the high cost of living that has affected citizens. “But we will not solve the situation by wearing sufurias on our heads. We should invest in our farmers to enhance food production”. He made the remarks at the Milimani Anglican Church of Kenya in Kakamega town, Lurambi constituency, when he attended a Sunday service and presided over a fundraiser.
According to him, there were over one million jobs available for Kenyans in the Diaspora, especially in Europe, the United Arab Emirates and the Americas. Even as he spoke, the Central Bank of Kenya released data showing that in April, Kenyans abroad sent home Sh49.3 billion, up from Sh44 billion the previous month.
One million jobs
To create more digital opportunities for young people locally, he said the government was also expanding Internet connectivity. “We will lay out 100,000 kilometres of fiber optics, besides 25,000 WiFi hotspots across towns in the country to enable our youth access digital jobs and other opportunities,” he said.
On the controversial housing tax, which employers will also pay shilling for shilling to match their workers’ contribution, the President said part of the money will be used to build 10,000 housing units in Kakamega town in the first phase, a move expected to create jobs for over 40,000 youths in the county. On the troubled sugar sector — the mainstay of western Kenya economy — he said the government would soon table a Bill in Parliament seeking the writing-off of over Sh5 billion debts owed by Mumias, Nzoia, Sony, Muhoroni and Miwani sugar companies, all of which are government owned but have not been profitable for years. The move, if implemented, will cushion the struggling sugar companies from collapsing.
“These are part of the measures my administration has put in place to revive the millers,” he said without giving a timeline on when the money would be released. “Writing-off of the debts will boast our current efforts to revive the millers and return them on the path to profitability.”
Part of the problem with the millers is that their debts accumulate interest and penalties, making the loans unsustainable. Once the debts are paid off, the government plans to sell off some of the millers, a plan that has in the past attracted criticism from local political leaders who have opposed the divestiture proposals.
A sugar taskforce that was chaired by former Kakamega Governor Wycliffe Oparanya had recommended, among others, the waiving of debts owed by each of the firms just as the government had done for the coffee, tea and milk sectors.
The report also urged the National government to cede its shares in the millers to the respective county governments. In addition, it called for hastening of the millers’ revival to end exploitation by receivers.
Yesterday, Ruto said privatisation of the sugar companies would follow strict government rules and procedures to ensure the locals benefited. Earlier this month, the Cabinet made a u-turn on the sale of struggling parastatals and other government businesses, saying Parliament would now have the final word before such institutions are offered to private investors.
“No investor will lay claim to lands and other property owned by the factories. These will remain in the hands of the public,” said the President.
“Mumias Sugar Company alone owes over Sh1.6 billion and we cannot expect it to fully get back on its feet when it has such a burden. That is why I am urging our Members of Parliament to pass the Bill once it is tabled in the House,” Ruto told the gathering that also brought together local political and religious leaders.
Ongoing works
Meanwhile, the government intends to equip the Kakamega County Referral Hospital at a cost of Sh1 billion and release another Sh300 million towards completion of the ongoing civil works.
Before he stepped down as governor, Oparanya had handed over the hospital to the National government. Although health services are managed by counties, the National government manages referral hospitals.
Yesterday, however, the President asked the Kakamega County Government to allocate another Sh200 million towards the project.
“Completion of this health facility will help reduce pressure and congestion in other hospitals in this region such as MTRH in Eldoret “ he said.
He further said the national government would be allocating Sh130 million as pay for community health promoters and challenged counties to allocate a similar amount. The President rallied leaders from Kakamega, an Azimio stronghold, to work with his government for the sake of development. Prime Cabinet Secretary Musalia Mudavadi said more members of the local community were lined up for appointments in the Kenya Kwanza administration.
“We have sat with the President over State jobs and development opportunities for our people. The President is a man of his word and you will soon see these appointments coming through,” Mudavadi said.
On the war of words between top government leaders and their opposition counterparts, Bishop Caskan Asilutwa of the ACK Maseno North Diocese urged the President to engage Azimio leaders and find ways of healing and reconciling the country.
