Nairobi — President Uhuru Kenyatta has announced wide-ranging austerity measures and budget cuts in a bid to reduce the widening deficit between revenue and expenditure.

Kenyatta says the proposed cuts will affect hospitality, foreign and domestic travel, training and other less essential spending adding that these changes will cut across all arms of government.

"These budget cuts ask all of us in government to tighten our belts. It also ensures that the sacrifices made by tax compliant Kenyans are matched by discipline," said the President in a televised address from State House, Nairobi.

Kenyatta has further cited budgetary demands as his reason for rejecting the Finance Bill amendment that aimed to postpone the VAT on fuel by two years and instead counter-proposing a reduction of the VAT on petroleum products by half.

Should Parliament accept the President's proposal, the price of super petrol will drop from Sh127 to about Sh118, and the price of diesel will drop from Sh115 to about Sh107.