Similar to most former colonized nations, Kenya has struggled with economic development for decades. Despite its status as an “African lion” with the largest economy in East Africa, the state is currently in a debt crisis. Kenya holds $80 billion in domestic and foreign debt. To compensate for their insufficient revenue, the Kenyan government proposed a finance bill with significant changes to taxation in late May. The bill was supposed to raise 346 billion Kenyan shillings ($2.68 billion) in additional revenue, but it imposed taxes on essential goods such as bread, menstrual products, and digital products, sparking major unrest amongst the population.
On June 18, Kenyan youth took to the streets of Nairobi to demonstrate their discontent and refusal to accept the tax increases. The hashtag #RejectFinanceBill spread rapidly across social media. The bill passed the next day with amendments, but resistance amongst the public persisted. Protestors stormed the Parliament building on June 25, sharing #OccupyParliament (reminiscent of #OccupyWallStreet in 2011) on Tikok and X to mobilize the population. The escalation led to brutal clashes with police; tear gas, batons, and live fire were deployed against demonstrators. The vicious crackdown was consistent with decades of police suppression of civil disobedience in Kenya.
While President William Ruto finally announced the withdrawal of the bill two days later, the damage had already been done. The protests were the manifestation of increasing dissatisfaction over corruption and economic strife. Economic inequality is rampant and 12.7% of the population is unemployed. The unemployment rate for youth (18-34) is even worse at 67%. The demonstrations were not just a rejection of the bill but of the status quo. The protestors' demands went beyond just repealing the finance bill. They wanted Ruto gone. The hashtag #RutoMustGo spread across social media.
Although the more radical demands of the movement can be attributed to the great unpopularity of current governance, the Communist Party of Kenya has also played a great role in organizing the movement. The leadership of the Communist Party of Kenya, along with individual protestors, have not only condemned Ruto’s corrupt cabinet but also the International Monetary Fund's (IMF) role in its austerity policies, which they believe to serve foreign interests rather than the interest of the Kenyan masses.
These sentiments are not exclusive to Kenya. The IMF has received significant criticism over the years for its controversial loaning practices and policy recommendations. It was established during the 1944 Bretton Woods Conference to rebuild European economies after World War II. Since its creation, the IMF has sought to stabilize the exchange rates of currency, along with providing loans and economic recommendations to developing nations. In its current state, the IMF has a total of 191 members. In theory, an international economic institution designed to promote economic cooperation would be beneficial to all member countries. However, former colonized nations like Kenya do not hold the same economic and political powers as states like the United States. Economic anthropologist Jason Hickel has even described the imbalance of power between global South and global North nations as akin to apartheid.
Given the fraught history of the IMF with developing nations, it is important to consider what purpose their policy recommendations serve. According to the Kenyan government, the goal of the finance reform bill was supposed to raise 346 billion Kenya shillings ($2.68 billion) in additional revenue. This is certainly necessary given Kenya’s financial situation in the context of the climate crisis, economic shocks from the Ukrainian war and the pandemic, as well as rampant inequality and poverty, but economic policies should not be so punitive. Sarah Saadoun, senior researcher on poverty and inequality at Human Rights Watch, spoke on the finance bill: “Economic sustainability can only be achieved with a new social contract that raises revenues fairly, manages them responsibly, and funds services and programs that allow everyone to realize their rights.”
While the IMF has expressed concern over the violence on the streets and its commitment to improving the Kenyan economy, the sincerity of their statement remains to be seen. How effective can their economic assistance be without ensuring the economic sovereignty of their borrowers? Tunisian economist Fadhel Kaboub, author of Economic and Monetary Sovereignty in 21st Century Africa, asserts that the IMF and World Bank must be understood from the framework of neocolonialism: wealth and resource extraction.
Kenya is facing many economic and social challenges, but if it wants to increase government revenue and develop its economy, it needs the popular consent of the people. Unless Ruto can shift his focus towards mobilizing the public, he will continue to face resistance from Kenyans. Instead of relying on Western institutions that do not have Kenya’s best interests, Ruto’s administration should seek to build positive trading relationships with other East African countries and invest in agriculture, energy infrastructure, and social welfare. This can be achieved through a progressive taxation system. The top .1% own more collective wealth than the 99.9% of Kenya. The Kenyan working class deserves to have their needs met, but the elite continue to evade taxes and mooch off the population, and Western institutions extract their wealth. The Kenya Revenue Authority found that 1,486 companies dodged approximately 1 billion in taxes by categorizing themselves as large or medium taxpayers between June 2022 and June 2023. Corporations and the upper class in Kenya have more than enough wealth to finance a new people-centered economy.
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