Key Points
- Kenya’s President Ruto has received rather dissatisfying news after the High Court of Kenya deemed the appointment of 50 CASes meant to deputize 22 Cabinet Secretaries unconstitutional.
- The High Court decision is a hit to the President and comes days after it suspended the enforcement of the ‘controversial’ 2023 Finance Act.
Kenya’s High Court deemed President Rutos’ 50 assistant cabinet secretaries unconstitutional just days after suspending the highly controversial Finance Act. The decision follows an uproar of continued overspending from the Kenyan government while the country is in financial distress.
President Ruto won’t get his CASes as the country has a bad financial outlook
Kenya has witnessed a ruling that will bar the government from hiring 50 CASes to deputize only 22 Cabinet secretaries across its ministries. The High Court gave this ruling on July 3, 2023, claiming that the math isn’t right and doesn’t show any intentions of serving the country’s nationals.
President Ruto’s government has been in the spotlight for its increased overspending, borrowing, and over-taxation while a financial crisis continues. In June, the Central Bank of Kenya hiked interest rates by 100 basis points, taking the rates to 10.5%.
The CBK Governor Kamau Thugge pointed out that recent inflation data shows a need for more to be done. June had 7.9% inflation rates, while May and April had 8.0% and 7.9%, respectively. At the time, food prices were significantly high, with SUagr having an inflation rate of 58.1% YoY and Electricity at 53.4% YoY.
Thugge highlighted that the government had borrowed KES 436B in the 2022/2023 fiscal year, with the country’s stock of external debt crossing KES 5.1T accounting for the 52.9% of gross public debt that stands at a staggering KES 9.63T. He added that the non-performing loans ratio stood at 14.9% in May, up by 30 basis points from April.
He added that the Private sector grew by 13.2% in May, unchanged from April. He topped up, saying exports grew 5.5% in 12 months ending May while exports fell 2.3%.
Finance Act 2023 suspended pending hearing
In connection to the concerns surrounding the Kenyan government’s spending and borrowing, the country’s Auditor General told Members of Parliament on July 2, 2023, that there are no records of public debt which places the efforts of paying it off in doubt whether they are effective or there is corruption involved.
Due to these issues, lawyer Okiya Omtatah filed a lawsuit against the Kenyan Government in the High Court, deeming some parts of the highly contested Finance Act as unconstitutional. The High Court of Kenya ruled the suspension of the implementation of the already signed into law Finance Act on hold which slams President Ruto’s plans to raise more funds via higher taxes.
However, the nation’s Energy and Petroleum Regulatory Authority (EPRA) went against the High Court ruling. It introduced new Petroleum product prices following the taxes implemented by the Finance Act. As a result, lawyer Omtatah expressed that he would sue EPRA for defying court orders.
In other news, the World Bank had expressed concerns over the increased taxes that came with the Finance Act saying that it could dwarf the economic growth in the East African country, but President Ruto did not take the suggestion. The bill was passed quickly in the country’s two parliamentary houses and signed into law. Now, the case on President Finance Act is set to be heard on July 5, 2023, by the High Court.
“That I am satisfied that the Application meets the test for conservatory orders, and I do grant prayers 2 and 3 of the Application until 5.7.23 when the matter is scheduled for mention for directions,” ruled High Court’s Justice Thande
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