Kenya's Supreme Court Pauses Ruling Against Finance Law to Protect Budget

Kenya's Supreme Court has temporarily suspended a lower court's decision that nullified the 2023 Finance Act, citing the need to maintain budgetary stability while the government's appeal is pending. The court's ruling provides a reprieve to President William Ruto's administration, which has faced significant challenges due to public opposition to the finance laws and pressure from international lenders.

The Finance Act, which outlines the government's revenue-raising measures, including tax hikes, is critical for funding development programs and addressing Kenya's substantial public debt. In June, the government withdrew this year's finance bill following widespread protests, particularly among the youth, marking one of the most significant challenges of Ruto's presidency.

The Court of Appeal had earlier ruled that the 2023 Finance Act was unconstitutional, delivering a setback to the government. President Ruto has defended the need for tax increases, arguing that they are essential for meeting Kenya's financial obligations and funding development initiatives. However, his administration is balancing the demands of Kenyan citizens, who are struggling with economic hardships, against those of international lenders like the International Monetary Fund (IMF), which have called for fiscal discipline.

In its ruling, the Supreme Court emphasized the importance of preserving stability in the budget and appropriation process until the appeal is resolved. "We find that public interest tilts in favour of granting conservatory and stay orders to maintain stability in the budget and appropriation process pending the determination of this appeal," the court stated.

The Supreme Court has scheduled hearings on September 10 and 11 to assess the constitutionality of the 2023 Finance Act. This legal battle will be closely watched, as it has significant implications for Kenya's economic policies and President Ruto's ability to navigate the competing pressures from both domestic and international stakeholders.