Tuesday saw the start of a statewide protest over proposed tax hikes, during which Kenyan police used tear gas to scatter demonstrators in the country’s capital, Nairobi.
General strike in opposition to the finance bill
In an effort to rein in the public debt that has skyrocketed over the last ten years, the organizers have also called for a general strike in opposition to the finance bill, which seeks to raise an additional $2.7 billion in taxes.
On a campaign of supporting Kenya’s working poor, President William Ruto won an election nearly two years ago.
He now claims that a high debt load has limited his capacity to keep some of his pledges, with interest payments alone accounting for 37% of his income.
Between a populace bleeding from cost-of-living increases brought on by inflation and sharp tax rises implemented in last year’s finance law, and lenders like the International Monetary Fund, which is pressuring the government to reduce deficits, he has found himself locked between opposing demands.
Over the course of two days of protests last week, thousands of people flocked to the streets of Nairobi, the country’s capital, and over fifty other cities.
Police in Nairobi deployed tear gas and water cannons many times, despite the fact that the protestors were almost entirely peaceful, according to Reuters correspondents and human rights organizations. The police oversight board stated that one person was slain “allegedly as a result of police shooting”.
President Ruto complimented the demonstrators on their peacefulness and stated that the administration would continue to work with them in his speech on Sunday.
“Ruto must go!”
After concentrating on the finance measure at first, demonstrators’ demands have expanded, and on Thursday, many of them chanted, “Ruto must go!”
The protests, according to political observers, provide a unique issue for Ruto since, in contrast to earlier rallies organized by political parties, they don’t have an official leader who can be appeased by means of secret agreements and inducements.
The protests that took place last week seemed to be an organic movement started by a young Kenyan group that organized itself online.
By agreeing to remove new taxes on bread, cooking oil, car ownership, and financial activities in bill revisions, the government has already conceded on several points. Protesters, however, want the entire bill to be abolished and that hasn’t satisfied them.
The finance ministry claims that the amendments will blow a Ksh200 billion ($1.56 billion) hole in the 2024–2025 budget and force the government to make spending cuts or hike taxes in other areas. Lawmakers will discuss the proposals on Tuesday afternoon.
Fergus Kell, a political analyst at the London-based think tank Chatham House, stated that Ruto’s alternative is to emphasize cutting government profligacy more, but maintaining a political coalition makes this option less tempting.
FUNDING BILL: WHY?
The Kenyan government wants to lower the state borrowing and budget deficit by $2.7 billion by raising new taxes in the 2024–2025 bill. The World Bank and the International Monetary Fund recommend that state debt should not exceed 55% of GDP, however Kenya’s debt is already 68% of GDP.
A finance bill, which outlines the government’s fiscal goals, is often presented to parliament prior to the start of the fiscal year, which runs from July to June.
Kenya, facing severe liquidity issues and doubts about its capacity to obtain money from financial markets, has sought assistance from the IMF, which has advised the government to fulfill income targets in order to obtain further finance.
