In August 2022, Kenya concluded a fairly uneventful general elections culminating in the inauguration of the fifth President, H.E. William Samoei Ruto.
President Ruto’s chief campaign message was to remarkably change the economic priorities of the Government of Kenya (GoK) from a predominantly trickle-down economic model to an approach that primarily focuses on economic development from the ‘Bottom-Up’. President Ruto’s explanations of the Bottom-Up approach centered on economic empowerment of low income earners such as pastoralists, smallholder farmers, women, youth, bodabodas, small (and often times unregistered) businesses like mama mbogas and kibandaski etc.), the unemployed, casual labourers, amongst others.
The President’s inaugural speech did not deviate from his campaign message as he concisely communicated intention to apply marked change to the general GoK economic, expenditure and other fiscal policies that are geared to focus on sustainability considerations in expenditure and ultimately enforce fiscal indiscipline. This approach is expected to change GoK’s appetite for commercial loans which have tended to be very expensive and thereby exert strain on GoK’s balance sheet.
Further, President Ruto underscored the need to completely shift from consumption subsidies that have hitherto been availed to select products such as fuel and some household consumables. This move, whilst unexpected, is viewed as an intention by the incoming administration to put in place lasting solutions to the skyrocketing cost of living and to re-direct the funds to programs geared at creating jobs and thereby increase income.
Renewable energy also got a mention with President Ruto signaling intention to promote more uptake of renewable energy. Also, recently, during an address to the UN Assembly in New York, President Ruto underscored the importance of focusing and channeling more investments in smallholder farming, specifically mechanization of agriculture. Smallholder farming is the fulcrum of Kenya’s economy but has hitherto received comparatively small attention from GoK.
In addition, President Ruto underlined the fact that climate change is now a reality and that Kenya is presently in a state of climate emergency. Whilst signaling that GoK will immediately embark on providing necessary relief to drought-stressed regions, President Ruto also signaled that the time is now ripe for the country to focus on climate resilience and adaption programs that will unlock agriculture potential in the country’s arid and semi-arid regions. This signals a shift to more investments in productive use leveraging solar energy (PULSE) applications and climate-smart agriculture programs.
President Ruto also remarked that there will be a stricter focus on economic freedom in the country and announced measures to loosen regulations restricting handling and transactions in cash of over USD 10,000.
The President also signaled an intention to further expand the country’s internet infrastructure thereby further opening up the scope of online and digital businesses in the country.
If you require tailored advice or further information or assistance on investing or establishing a business in Kenya, please contact us on sarinke@mckayadvocates.com.