Kenya’s Protests Pose Costly Consequences for Businesses and Government

Francis Ochieng is facing difficulties coping with the destruction his business suffered in Nairobi during days of anti-government protests in Kenya. Vandalism and looting caused almost $10,000 in losses for Ochieng after his shop was set on fire. With a family to support, including a wife and school-going children, Ochieng is at a loss for where to begin to rebuild his livelihood.

On June 26, 2024, Kenya’s President William Ruto announced that he would not sign the 2024 finance bill. This decision has complicated efforts to address Kenya’s significant debt burden, currently at 68% of GDP, above the recommended 55% by the World Bank and the IMF. In order to access more funding, the IMF has advised Kenya to meet revenue targets.

The finance bill, which aimed to raise $2.7 billion through taxes on essential items like bread, cooking oil, and diapers, has faced opposition. Ruto has now shifted focus from raising revenues to cutting spending. He plans to implement austerity measures, beginning with budget cuts to the presidency.

Political analyst James Shikwati noted that the protests have uncovered underlying issues in Kenya regarding tax policies that stifle or harm businesses, particularly those that employ young people. Ruto’s campaign promise two years ago to support low-income “hustlers” has come back to haunt him, with young people expressing anger towards him for the current situation.

Activists remain skeptical of the government’s intentions and are demanding Ruto’s resignation while vowing to continue pushing against potential tax hikes. The unrest in Kenya has highlighted a need for meaningful reforms and changes in government policies to address the concerns of its citizens.