President William Ruto has defended reforms to the National Social Security Fund (NSSF), asserting that Kenya had to revamp its contribution model due to years of weak national savings, which left the country overly reliant on borrowing.
Speaking on Saturday at State House Nairobi, during a meeting with religious leaders from Bungoma County, the President remarked that the previous system, where workers contributed a flat rate of KSh200 per month, was unsustainable and inconsistent with global best practices.
“When I became president, we used to contribute Ksh200 only to the NSSF every month. A worker paid KSh200, and the employer matched with KSh200, making it KSh400 in total. Even someone earning KSh500,000 was only contributing KSh200. Even merry-go-round groups are not contributing KSh200,” he said.
He noted that Kenya’s low savings culture had contributed to rising public debt, limiting the country’s ability to finance development projects with domestic resources.
“The reason we borrow from China is that in China, savings as a percentage of GDP is 55%. They invest their money in reserves. We spend all our money and then go to borrow from China, who demand interest back, leaving us to focus on repaying debts. We must stop,” he said.
Ruto argued that successive administrations avoided making tough economic decisions, leading to structural weaknesses in national savings and investment.
He stated that the current administration opted for a percentage-based contribution model for the NSSF, despite resistance, in order to enhance long-term financial sustainability.
“Currently, as is practiced globally, every worker contributes to the NSSF based on a percentage of their income. Each employee contributes 6 percent, while the employer adds another 6 percent, and the entire amount eventually belongs to the worker. With this system, the fund has more than doubled the savings accumulated over 60 years within just two years,” he explained
“We must stop borrowing. We need to build our own reserves as Kenyans. That is why, even if others call me Zacchaeus, I am determined to build our nation using our own resources. He who borrows is a slave to the lender,” he said.
Under the new arrangement, workers contribute a percentage of their income while employers match those contributions, a system the President claimed aligns Kenya with global pension practices.
He explained that the reforms have significantly boosted savings within the fund, more than doubling accumulated resources within three years compared to previous decades under the flat-rate system.
“In 2023, we had KSh312 billion in our NSSF fund. In just three years, by February 2026, we had KSh700 billion. By next year, we will have reached KSh1 trillion. In five, ten, or twenty years, we will not be borrowing,” he explained.
The President linked the reforms to broader efforts aimed at reducing Kenya’s reliance on external borrowing, asserting that countries with robust domestic savings are better positioned to finance their development independently.
He emphasised that Kenya must now focus on building internal financial capacity rather than depending on external creditors, noting that borrowing creates long-term fiscal constraints.
Furthermore, the President mentioned that increased domestic savings are already being directed towards infrastructure development, including road projects, as part of efforts to create a more self-sustaining economy.
“We have now organised our economy, and I am confident about the future of Kenya. The savings from the NSSF are working. Even the Rironi-Mau Summit road project is funded by part of our contribution to the NSSF. I will ensure we build a proper economy,” he said.
Ruto compared Kenya’s development trajectory with that of several Asian economies, including Singapore, South Korea, and Malaysia, which he stated achieved rapid transformation through disciplined leadership and strong savings-driven investment models.
“Nations like Singapore, South Korea, and Malaysia were once like Kenya. Today, they are first world countries, while we remain in the third world. The difference is leadership. Leaders who have the courage to make and implement the right decisions,” he stated.
He noted that such countries made difficult but necessary policy choices that were not always popular but ultimately delivered long-term economic stability and industrial growth.
He acknowledged that while his reforms may face criticism, they are essential for establishing a stronger economic foundation for future generations.
“I have made tough decisions. We all know what is right, but the courage to act is what we lack. Some just want to be applauded and praised while nothing progresses, leaving the country stagnant,” he said.
