Conflict Alerts # 647, 28 June 2024
Anu Maria Joseph In the news
On 26 June, Kenyan President William Ruto withdrew the finance bill following the countrywide violent protests. Ruto stated: "I run a government, but I also lead people, and the people have spoken."
On 25 June, protests against tax reforms turned violent after the lawmakers passed the bill with several concessions. The demonstrators tried to breach Parliament House and set fire to parts of the building in the capital Nairobi. Police fired live ammunition, killing 22.
On 25 June, President William Ruto stated that all means would be used to "thwart any attempts by dangerous criminals to undermine the security and stability of our country." He deployed military to disperse the protesters. Ruto added: "Violence, disrespect and wanton destruction of property and blatant attack on public institutions shall not be condoned."
On the same day, the UN Secretary-General, Antonio Guterres, expressed that he was "deeply saddened by the reports of deaths and injuries - including of journalists and medical personnel - connected to protests and street demonstrations in Kenya."
On the same day, the AU Commission Chairperson Moussa Faki Mahamat called on the stakeholders “to engage in constructive dialogue to address the contentious issues that led to the protests in the supreme interest of Kenya.”
Issues at large
First, the bill against the economic crisis. The financial bill, introduced in May, imposes a 16 per cent value-added tax (VAT) on bread, a 25 per cent excise duty on cooking oil, a five per cent tax on digital financial transactions, a 2.5 per cent annual tax on vehicles and an "eco levy" on plastic goods. The government aim to collect USD 2.7 billion in taxes to address the debt crisis which amounts to USD 80 billion. The country's public debt records 68 per cent of the GDP. Despite the concessions, the protesters claim that the new taxes would further increase the cost of living. The trading economics recorded the country’s inflation rate at 5.1 per cent in May. According to the World Bank, although Kenya is one of the most developing countries in Africa, a third of its 52 million people live in poverty due to the high cost of living.
Second, recurring protests against Ruto. Ruto took office in September 2022, promising to address unemployment and poverty. However, a month later, Ruto removed fuel subsidies, increasing the costs of basic commodities. In July 2023, violent anti-government protests erupted against a new bill, which introduced a five per cent housing levy, and a 16 per cent tax on petroleum products; 23 people were killed during the protests.
Third, increasing young discontent. The protesters were predominantly young. It began as angry responses in social media including TikTok, Twitter, WhatsApp and Instagram. It revolved into demonstrations and live streaming of clashes with police without any political backing. The hashtags #OccupyParliament and #RejectFinanceBill2024 went popular on social media. The police arrested more than 200 young protesters. A 15 per cent withholding tax for digital content creators and a five per cent tax on digital transactions were considered the triggers.
Fourth, the government's harsh response to the protests. The Kenya National Commission on Human Rights (KNHRC) reported that 21 protesters have disappeared since 24 June. Police used live ammunition, rubber bullets, tear gas and water cannons to disperse the protests. Ruto deployed military to quell the protesters stating that his government would prevent its recurrence “at whatever cost.”
Fifth, the debt crisis of African countries. Kenya is not the only country in Africa vulnerable to similar instabilities attributed to high debts. According to the World Bank, nine African countries are struggling with debt distress in 2024 and 15 are at high risk of distress. The majority of the population in the continent pays their taxes to spend on interest payments rather than services. They rely on repeated borrowing, leading to an increased total debt burden.
In perspective
The withdrawal of the bill is a victory of the protests. The involvement of the young generation and their methods without political backing were the first of a kind for the administration
Ruto received widespread international criticism over the use of force. The sudden shift in his stance is likely an attempt to save face in front of the international community. The US has supported Kenya in deploying its police forces in Haiti. However, it is unclear how the country would address the debt crisis. Any further financial reforms would likely face a similar popular reaction, implying that the administration is at a crossroads.
Meanwhile, the increasing debt crisis in Africa would leave the governments to either increase taxes or wait for debt reconstruction. The successful young protests in Kenya would likely encourage the youth across the continent to seek a similar method to protest against any financial reforms by respective administrations.