Mass protests in response to the rising cost of living and the implementation of IMF austerity measures broke out again in Kenya on 18 June 2024. A follow-up protest on 25 June saw 39 people killed and hundreds injured by the Kenyan security forces after protesters stormed the Houses of Parliament, destroyed offices and set them ablaze. The High Court has authorised military intervention from the Kenyan Defence Forces (KDF) and the Law Society reported that 50 people were abducted from their homes, workplaces and public spaces, likely by security forces. The government has been forced to walk back the legislation, shelving the Finance Bill for now as it ponders how to respond to the attack. The massive unpayable debt that Kenya labours under and the relative underdeveloped nature of its economy presents a major crisis for the country. The Kenyan masses are heading for an inevitable confrontation with the kleptocratic Kenya elite and their British and US imperialist backers who are systematically plundering and looting the country.
Finance Bill 2024
The bill proposed a 16% sales tax on bread, a 25% duty on cooking oil, and ‘eco-levies’ on plastic products such as sanitary pads and nappies. Led by the youth, people all over the country mobilised against these proposals on 18 June ahead of the Bill’s second reading in parliament. Yet the national assembly voted 204 to 115 to move the bill to the next stage, leading to larger protests on 25 June which were brutally repressed. These proposed measures are dictated by the 2021 World Bank and IMF stipulations that Kenya implement ‘fiscal consolidation and a tighter monetary policy’. Hence in 2023, Kenya increased interest rates, eradicated a fuel subsidy to the poor, doubled VAT on petroleum products to 16%, and introduced a new housing tax of 1.5% for every employee. This is in response to a severe economic crisis whereby Kenya’s debt has ballooned from $16bn in 2013 to $68bn in 2022, to $76.6bn in 2023. Debt payments burned through 30% of annual revenue in 2021, 50% in 2022 and 65% in 2023 – an unsustainable and appalling outcome. Even more criminal is that 31.9% of revenue will go on just on interest payments in 2024, leaving the principal debt untouched. Kenya’s currency reserves at $7bn don’t cover the statutory four months of essential imports, covering only 3.7 months. In addition, tax revenue from June-December 2023 fell short of target ($9.97bn) at $8.7bn, and is projected to fall further by $2.23bn by June 2024.
As Kenya sinks deeper into a debt trap, it had hoped the Finance Bill 2024 would raise a further $2.7 bn in addition to aspirations of borrowing another $7.6 bn (one trillion KSh Kenyan Shillings) from commercial lenders. In desperation in February 2024, Kenya borrowed $1.5bn at an almost 10% interest rate to avoid defaulting on a $2bn Eurobond maturing in June 2024, originally borrowed in 2014 at a 6.875% interest rate. These short term financial stopgaps simply delay the inevitable: Kenya will either have to default on its odious debt, or launch greater attacks on the working class.
Protest demands 2024
Led by the Gen-Z youth, protesters have made the following demands:
- A detailed audit of the national debt
- Scrapping Chief Administrative Secretary (CAS) positions (which were ruled unconstitutional in the High Court in 2023 as being duplicate positions and avenues for corruption) and first lady offices, redirecting funds to employing teachers and doctors
- Scrap the housing levy and audit funds collected so far and refund them
- Obey all court orders
- Sack all corrupt ministers starting with Agriculture Minister Mithika Linturi (who was found to have supplied sand as fake fertiliser to farmers across Kenya and bribed a select committee investigating him with $22,000 each to avoid impeachment)
- Full restoration of Linda Mama program (a free maternity policy under the former National Hospital Insurance fund) and scrapping of the Social Health Insurance Fund (SHIF) which was ruled unconstitutional on 12 July
- Cancel plans to deploy Kenyan police forces to Haiti and immediately recall those already deployed
- Employ all junior secondary school teachers to permanent and pensionable positions
- Employ all intern doctors on previous payment terms
- Reduce all MPs salaries and allowances to KSh 200,000 stating that ‘MPs can earn more than doctors, in a third world struggling economy its totally unacceptable’
- Restore the school feeding programme, increase the funding for health and education and cut budgets for the executive and legislature
- Scrap wasteful/useless ‘Women’s Rep’ position and redirect salaries to civil servants
- President Ruto must stop state capture of judiciary and legislature, and resign with immediate effect for selling the country to the west and the IMF
The above demands are progressive and internationalist in nature, defending the interests of the working classes and identifying both the corrupt ruling elites as well as their imperialist backers as class enemies. The protests have progressed from a cost of living protest to one demanding the president’s resignation, against corruption and against police brutality. Police chief Japhet Koome has been forced to resign. In response President Ruto has implemented cosmetic changes, sacked his cabinet and is said to be proposing a government of national unity, while calling protesters criminals and blaming unnamed ‘foreigners’ for being behind the protests, in classic divide and rule fashion.
Imperialists loot Kenya
In 2017 Oxfam reported that less than 0.1% of Kenya’s population (8,300 people) owned more wealth than the bottom 99.9% (more than 44 million people). In addition to the wealth being stolen by Kenya’s corrupt elite, multinational corporations (MNCs) continue to systematically loot Kenya of its resources. By 2015, Kenya was losing KSh 639bn ($6.52bn 2015 prices) annually in tax evasion by governments, local firms and MNCs (Tax Justice Network Africa, 2015). No African country requires MNCs to publish country by country reports, showing where they book their profits and pays taxes, enabling MNCs to hide information on the profits their subsidiary companies are making. Via a variety of means such as transfer pricing, over-invoicing imports and under-invoicing exports to reduce their tax liabilities, tax evasion, etc, Kenya is being fleeced. In 2021, The United Nations Conference on Trade and Development estimated losses to illicit financial flows to be nearly half of Kenya’s domestic revenue. The British government bears a special responsibility because of its position at the head of a network of overseas tax havens where the looted resources end up such as the Cayman Islands, Bermuda and the Virgin Islands, a mere extension of its legacy of colonial parasitism.
The working class in Kenya are bearing the brunt of the financial crisis while global financial elites live lavishly off of predatory interest rates and shady business deals. Kenya is trying to pay its debts from a leaking bucket, and the Kenyan youth have said enough is enough.
