NAIROBI, July 5 (Reuters) – Kenyan President William Ruto on Friday pledged spending cuts totalling 177 billion shillings ($1.39 billion) in the fiscal year that started in July, after weeks of nationwide protests that forced him to scrap planned tax hikes.

The government will also increase borrowing by about 169 billion shillings to cover the 346 billion shilling hole created by the decision to withdraw the finance bill that was the original spark for the protests.

The demonstrations, which started peacefully before turning violent, have become the biggest threat to Ruto’s two-year-old presidency. Campaign groups have documented hundreds of arrests and at least 39 deaths linked to the government’s heavy-handed response, raising fears of rights backsliding.

Ruto said in a televised address to the nation that Kenya’s budget deficit was now projected at 4.6% of gross domestic product in the 2024/25 financial year, up from an earlier estimate of 3.3%.

Among ways his government will cut spending, Ruto said 47 state corporations would be dissolved, the number of advisors in government would be reduced by 50% immediately, and all non-essential travel by public office bearers would be suspended.

“Budget lines providing for the operations of the Office of the First Lady, the spouse of the Deputy President, and the Prime Cabinet Secretary, will be removed,” Ruto said, adding that public servants at retirement age of 60, shall be required to immediately retire.

He said there would be a forensic audit of the country’s debt and that he would also announce government changes soon.

($1 = 127.7500 Kenyan shillings)

(Reporting by George Obulutsa and Bhargav Acharya; Writing by Alexander Winning; Editing by Bate Felix)