By Gurjit Singh
The general election in Kenya in 2022 saw the victory of President Ruto, who defeated Raila Odinga in an alliance backed by former president Uhuru Kenyatta. This time, there were no political upheavals or rioting.The post-election scenario was generally quiet and slow.Odinga was co-opted into associating with the government through consultations. He is now Kenya's nominee for the chairperson of the African Union (AU) Commission.Ruto himself is under criticism for travelling overseas too oftenand not paying attention to domestic issues. He has been vocal in speaking up for climate finance, for debt stress, the reform of the AU, and issues of the Global South.His decision to send a peacekeeping police force to Haiti was welcomed by the United States (US).
Yet, on 24 June 2024, Nairobi imploded when massive protests eruptedin the city. Members of the Gen Z and millennial generations formed a youth activist group that entered Kenya's Parliament while they were voting on the final reading of theFinance Bill 2024. This was the second major protest over the proposed taxes in the finance bill, which sought a substantial US$ 2.7 billion increase in the budget by raising taxes on essential goods and services. These included levies on bread, edible oil, and daily necessities. Another proposal was to tax earnings from digital commerce and work where many Kenyan youth engage to counter the high rate of unemployment in the main economy.
The intensity of the protest led to Ruto disbanding his cabinet.The impression was that the tax increases would impact the working class and youth the most, and in their perception, much of the increase in the budget was on unnecessary expenditure.They highlighted that US$ 7.8 million was allocated for the renovation of State House, the presidential mansion.Youth protests were organised using the social media nomenclature #RejectFinanceBill2024. These protests had been gaining strength since 18 June, when online mobilisation became potent.
Protesters were severely beaten by the police, and39 people died due to bullet and other injuries. A significant issue with Kenyan policing is the absence of intermediate measures like lathi charges or curfew, leading to the early use of heavy measures. The youth groups started raising their own funds, and nearly US$ 250,000 is said to have been collected through crowdfunding. This has been used to pay for expenses related to funerals and hospitalisation of those who suffered from the police response.
Gen Z youth feel alienated from the political dimension of Kenya, however stable it may seem. There is a high mistrust between young Kenyans and the state apparatus, particularly political parties. The protests appear spontaneous, without a central controlling force. Usual assertions of foreign intervention and NGO funding of protests are muted because the people refuse to be led by opposition parties or outsiders. This is a spontaneous effort based on grievances that have been nurtured over a period of time.
The mobilisation of people has happened across political, regional and tribal affiliations. The impact of poor economic policies is leading Gen Z to challenge political decision-making without following identity politics with which Kenyan polity is usually associated. MostKenyan political parties, since multi-party democracy was introduced in 1992, have tribal bases.
The lack of clear leadership shows that the normal tactic of coopting protest leaders by governments in negotiations is difficult to achieve. Ruto announced a national multi-sectoral forum for dialogue, with support from his rival, Raila Odinga. Protesters disowned Raila and his party and said they are not going to be led by any party, as all parties are disconnected from youth aspirations and national requirements.
The political elite and the government in particular seem to be caught off guard, leading to perhaps unnecessarily harsh police action, which has further alienated the protesters.President Ruto’s 30thJune freewheeling press conferencedid not come out too well and he was often seen as lacking empathy with Kenyans who had died in the protests. The gap between the presidency, the government, and the people seemed more evident than ever before. The President's commitment to ending extra-legal killings has been called into question. Though he had withdrawn assent to the Finance Bill on 26 June, it was perhaps too late for the protests to be curtailed.
In Kenya, mass protests have often led to political impact. What this one will do remains to be seen. The protesters believe that government accountability is at a low ebb and corruption remains very high, despite the message given to the politicians in the last elections.
The government officials, including the President, Deputy President, and ministers now face a variety of protests and an effort to create a new agenda. This, coupled with growing unemployment and few solutions, has frustrated the youth, many of whom voted for Ruto and gave him the support of Gen Z and millennials.
Where do solutions lie in this process? According to young analysts in Kenya, government spending needs to be curbed drastically. Better transparency and accountability have been demanded and must be conceded. New taxation needs to be properly justified and linked to clear expenditure rather than renovation of government buildings or buying new cars. There is a demand that investment policy and incentives need to be properly put in place, creating a conducive investment environment which in turn will lead to employment generation.
There are concerns that the government itself ignores constitutional authorities. TheAuditor General Nancy, Gathungu’s reporthas recently said that of 32 project loans that it had studied, only 18 had viability and necessity established. For 14 projects, the Auditor General was not provided any papers for review. The Auditor General has also reported highoverstaffing in the National Youth Service,particularly at high positions, often without due process. Several public sector companies continue to make huge losses. The Auditor General has pointed out some of them, and yet more money is pumped into them without remedy.
Kenya has increased import duties on goods, but this now extends to edible oil, soap, diapers, and vegetables, which impact the common people. New levies on LPG gas cylinders have annoyed the people too. Many of these levies are likely to continue to be enforced and will not be removed even though Ruto has withdrawn the Finance Bill.
Kenya's construction sector, which has been at the forefront of economic vitality, is showing very slow growth, among the slowest over the last two decades. This year, it has grown by only 0.1 percent,which is a huge decline from the 3.0 percent in the first quarter of 2023.
The situation leaves the Kenya government perplexed. If taxes cannot be raised without further protests, then the government must borrow more. But capital markets are not being helpful.Moody's has downgraded Kenya's debt ratingfurther into junk territory and warned the outlook was negative after a wave of protests led the government to abandon proposed tax hikes.Kenya's public debt already amounts to some 10 trillion shillings, around 70 percent of gross domestic product. Since the withdrawal of the Finance Bill, government debt targets have been between US $4.6 billion to US $6.6 billion. By 5 July, it settled on US$ 1.4 billion. This includes covering the revenue gap and raising money that Kenya needs to fulfil its governance and welfare measures but is inadequate.About US$ 35 million is debt owned by foreign creditors, mainly China and the World Bank and the International Monetary Fund (IMF).
When Ruto was elected, his campaign focused on economic inequality in Kenya, which affected people across regions and tribes. He successfully breached the politics of ethno-nationalism but is now threatened by the same class politics that his campaign had ignited. The Gen Z of Kenya has seen a life steeped in corruption and insecurity, dominated by well-established political elites, leaving the vast majority of Kenyan people disempowered.
Ruto's campaign had sought a bottom-up approach, promising investment in agriculture and SMEs through a hustler fund that would support the informal sector. The Finance Bill transformed Ruto's image fromthe 'hustler-in-chief'to 'Zakayo' or the tax collector.
Ruto is also under pressure from the IMF, which wants the government to deal with the US$ 80 billion national debt and attain debt sustainability. This was a part of the reason for the increased levies in the Finance Bill.IMF imposed conditions on Kenya under a 2021 loan agreement for a 38-month program granting US$ 3.9bnThe protesters' view is that the national debt is being thrust uponthe common people who are struggling for their daily lives.
The shift of ethnic and tribal identities to class identity since the last election has altered the character of Kenya's polity to an extent that Ruto and his team could not have imagined. Though there is now a generation gap between political elites and the protesters, it is the economic agenda which is really coming to hold attention. With no election in sight, this requires attention and new ways of financing government debt and welfare without taxing the common man beyond a limit. This is often the dilemma of many countries in the Global South.It is difficult to deal with popular aspirations without greater economic autonomy and domestic productivity.
