Kenya's prez ends subsidies - will it boost nation's economy

William Ruto, Kenya's President, has recently announced to scrap a subsidy on petrol. This has shocked the whole nation. People are fearing that this will make it too expensive for them to use transportation. It is expected that the prices of petrol will go up by 13% to US$1.49 a litre. This will also impact the prices of other commodities.

Ruto is of the opinion that such subsidy would cost the country close to US$ 2.3 billion by June 2023, which is Kenya's entire development budget. He also believes that the provision of subsidy has only failed to meet the purpose of lowering the cost of living.

Ruto barely managed to win the election last month and he hasn't even appointed his cabinet ministers. This kind of move might risk his presidential position in the country. Although, his narrative while campaigning for the election was to improve the lives of citizens by creating jobs and lowering the cost of living.

He also wants to reduce the cost of fertilizer which would result in increasing the production of maize in the country, instead of renewing the subsidy on the flour. He wishes to continue with the small subsidy on diesel and kerosene to help transporters and manufacturers and rural households.

Whether this policy will work in the favor of Kenya and president Ruto will depend on many other factors. However, there is possibility that in a long term this could help the country, as such subsidies usually benefit the rich rather than poor households.

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