By Lisa Vives, Global Information Network
NEW YORK | 1 July 2024 (IDN) — In a move that surprised observers, Kenya’s President William Ruto has agreed to scrap a highly controversial finance bill that sparked two days of police violence against mostly young protesters demonstrating against unaffordable tax increases.
Ruto said he would seek new austerity measures, including in his own office, to make up for the public’s rejection of the finance bill meant to raise $1.55 billion in taxes.
But out in the street, police assaulted, arrested and opened fire on demonstrators, a move that Ruto and other members of the government at first defended as necessary to protect public infrastructure, but which was widely criticized by Western governments and rights groups.
Twenty-three people died in the police shootings and more than 200 were injured.
The chaotic events in one of Africa’s major economies, also a key U.S. ally, have led to questions about the debt choking many developing countries, and who is to blame.
Kenya owes billions of dollars to Western countries and the IMF as well as China, to which it owes $5.7 billion.
“The key culprit is the lack of a well-functioning global financial safety net,” said Kevin P. Gallagher, director of Boston University’s Global Development Policy Center.
Sharp rises in basic goods, especially food and fuel, often serve as a trigger for protest and social unrest. Yet like elsewhere, rising prices—and prospects of even higher costs – are only part of the story in Kenya.
The proposed taxes would have affected every segment of society but especially students, the unemployed, poor and working-class people. The bill proposed taxing everything from income and fuel to essential items like eggs, sanitary napkins and disposable diapers.
The proposed tax increases were also set to increase healthcare costs. Digital content creators would also have been affected.
Second, the government justified the tax as a way to pay down the national debt. Kenya owes $80 billion in domestic and foreign debt. Its debt stands at 68 percent of GDP, well above the World Bank and IMF’s recommended maximum of 55 percent.
Yet, for many Kenyans, the deficit hinges not on taxation, but on rampant corruption at every level of government, financial mismanagement and lavish consumption among political elites.
This includes a growing frustration at Ruto’s spending habits—such as hiring private jets for global trips, an eight-course dinner for King Charles III and a love of expensive watches and other designer goods.
Third, many Kenyans felt that the finance bill showed an inability or refusal by political elites to recognize the grinding poverty and everyday struggle that many experience.
“It’s like (politicians) aren’t feeling our pain,” one woman told the New York Times.
The protests signaled to the government and international lenders that there is little hope for raising revenue through taxes that place a higher burden on low-income rather than high-income earners.
In addition, the finance bill felt like betrayal for the people who voted for Ruto in the 2022 elections based on his appeals to the poor as well as promises of progressive taxation.
Fourth, protesters were also motivated by the government’s brutal attempt to repress the uprising. The resolve of many protesters deepened as the police and military became more violent – reportedly shooting live bullets and tear gas into crowds.
These frustrations are coupled with enduring and profound economic inequality. To this day, just a few Kenyan families own a vast share of the country’s farm land. In 2022, the richest 10% of Kenyans owned 48.5% of the nation’s wealth.
Norbert Mwalo, a young protestor, had this to say about the uprising: “We currently have a president who is not a president. This president, William Samoei Ruto, follows the orders of the constitution.
“The constitution is fine, but the government should be of the people, by the people, for the people,” he said. “Now, we will change Kenya to be governed by the youth, for the youth, and by the youth.” [IDN-InDepthNews]
Photo: Gen Z youth protesting unfair tax hikes. Source: Global Information Network
