How much will Kenya's tax protests destabilize the country?



Diego Mendoza
Wed, July 19, 2023 

Kenya was rattled by massive protests against tax hikes Wednesday, a day after opposition leader Raila Odinga ordered his supporters to take to the streets for three days of demonstrations.

Meanwhile, Kenyan President William Ruto said that the opposition is merely using the tax debate to blanket their real grievance of Odinga losing the 2022 election.

Previous protests contesting Ruto’s election have already led to more than 300 arrests and several deaths, with international actors and religious leaders warning that the country is spiraling into unprecedented civil violence.

We’ve curated insights and reporting on how the demonstrations will impact the country.
Insights

“Enough is enough,” Nation Media Group told both Ruto and Odinga, arguing in an editorial that both men are at fault “if the country goes the way of failed states.” The media company did not validate or dissect claims by any party, rather arguing that the personal ”supremacy contest" between the two men is an “appalling leadership failure.”

Former first lady Mama Ngina Kenyatta has been propped up by supporters of Ruto as a key negotiator that could help settle some of the protesters’ qualms. She “understands that such protests affect traders negatively and subsequently hurts the economy” one anti-protest trader told Kenyans, an online news agency. But security has also reportedly been scaled back from her and former President Uhuru Kenyatta’s home in the wake of the protests, Kenyans reports.

The protests are threatening Kenya’s much-needed tourism industry, with travel agencies reporting massive cancellations across the country. 3.1 million Kenyans are directly employed in the sector, and tourism is the country’s third-biggest source of foreign exchange. —

Kenyans have not seen the fulfillment of promises such as free education in return for higher taxes, argues economist Joy Kiiru, which has angered protesters for years. Meanwhile, corruption is more evident than ever, she claims. “Why in a country that is struggling like Kenya do public officials drive high-end vehicles?” Kiiru told Citizen TV.

The protests are as much about the high cost of living in Kenya as they are about the tax hikes, according to Semafor’s Muchira Gachenge. The current regime won by only a slim margin after campaigning on lowering daily costs. But a year later, the price of basic commodities is at an all-time high, motivating many to hit the streets. Businesses have been severely affected in the capital of Nairobi, with traders shuttering their stores in fear of opportunistic looting and destruction, Gachenge says, adding that further protests will put more pressure on the economy.

Police in Kenya open fire on activists protesting new taxes. At least 12 people are wounded


EVELYNE MUSAMBI
Updated Wed, July 19, 2023 

NAIROBI, Kenya (AP) — Police in Kenya opened fire on protesters in clashes that left at least 12 people wounded Wednesday as the opposition organized demonstrations calling for the government of President William Ruto to lower the cost of living.

The opposition called for three days of countrywide protests aimed at forcing the president to repeal a finance law imposing new taxes. Ruto had vowed that no protests would take place, saying he would take opposition leader Raila Odinga “head-on.”

Four protesters were injured in the Mathare area of the capital, Nairobi, according to a police officer who spoke on condition of anonymity as he was not authorized to speak to the media. The Associated Press witnessed one man shot in the shoulder and two others shot in the leg in Mathare.

In Nairobi's Kangemi area, health records worker Alvin Sikuku told the AP that two young men had been brought into the Eagle Nursing Home clinic. “Police are using live bullets,” he said. One man was shot in the back and severely wounded, and the other was shot in the leg. “We don't yet know if they were protesting or just walking by,” Sikuku said.


In the city of Nakuru, Nakuru Referral Hospital Medical Superintendent James Waweru confirmed that four people came in with gunshot wounds, two of them shot in the abdomen, one in the chest and another one in the leg. A fifth person had been cut and wounded.

The Interior Ministry said more than 300 people were arrested during Wednesday’s protests and that they will be charged with crimes including looting, destroying property and assaulting police.

The opposition in a statement condemned the arrests of seven elected leaders and two close associates of Odinga, calling it a “desperate attempt” by the Ruto administration to paralyze the opposition.

Businesses and schools in Nairobi were closed as police used tear gas and water cannons to disperse protesters.

Demonstrations were reported in several other parts of the country including the western counties of Kisumu, Migori and Kisii where the opposition enjoys huge support.

Police had said the protests were illegal as no permit had been issued, but the right to peaceful protests is enshrined in the Kenyan constitution.

The opposition has said protests would continue Thursday.

Last week’s protests killed at least 10 people, according to watchdogs, with a police officer confirming at least six to the AP. Many others were injured, including 53 children who went into shock after tear gas was thrown inside their school compound.

Religious leaders have called for dialogue between the government and the opposition to end the protests. Catholic bishops on Wednesday issued a statement reiterating that “no further blood should be shed” and urged the president to repeal the newly passed Finance Act that has agitated many Kenyans.

The law has raised the price of fuel to its highest level as the government implements a doubling of value added tax on petroleum products to 16%. The prices have taken effect despite a court order suspending the implementation of the controversial new taxes.

A Nairobi resident, Wycliffe Onyango, said his entire earnings are spent on food. “Right now there is no work going on. We are suffering. I plead with the government to deal with the cost of living,” he added.

The International Monetary Fund this week called the law's approval a “crucial” step toward reducing Kenya’s debt vulnerabilities.

Western envoys from 13 countries on Tuesday issued a joint statement calling for dialogue and expressed concern over the loss of lives and destruction of property.

The Kenya Medical Association said its members had attended to “hundreds of injured Kenyans and witnessed tens of fatalities” as a result of protests in recent months, and access to health facilities was limited for patients and workers, leading to increased mortality.

Human Rights Watch urged political leaders to stop labelling protesters as “terrorists” and respect the right to peaceful protests. The group also called out the police for using force and live bullets to confront protesters.

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Associated Press writer Cara Anna and photographer Brian Inganga contributed to this report.

Kenya Azimio demonstrations: 'I feel betrayed by William Ruto'

Basillioh Rukanga - BBC News, Nairobi
Wed, July 19, 2023 

A protester kneels on road while wearing a shirt with the slogan ''Ruto is not my president'' during a countrywide protest

Kenya's police have been battling protesters in the latest opposition protests against the rising cost of living and tax hikes, with at least 24 people having been shot dead in recent months.

During last year's presidential election, James Wainaina, a taxi driver in the capital, Nairobi, voted for William Ruto, who portrayed himself as the candidate of what he called the "hustler nation" - ordinary people struggling to get by.

But now Mr Wainaina feels betrayed and supports the protests.

Since President Ruto came to office, prices have continued to soar, while his government has raised taxes.

Mr Ruto says the extra revenue is needed for escalating debt repayments and to fund projects to create jobs, but the tax rises have made life even harder for the poorest Kenyans.

Mr Wainaina's daughter, a high school student, recently stayed at home for three weeks because he was unable to pay her 14,000-shilling ($100; £75) school fees.

Mr Wainaina says his business has declined because of the cost-of-living crisis.

He gets fewer clients and nearly all his earnings now go into simply keeping his car on the road.

Five years ago, he could make up to 4,000 shillings a day, enough to cover his basic necessities, including school fees, he says.

He laments there are times he now goes home with just 500 shillings after expenses "which is not enough to fuel the car the next day".

"It is very difficult for us," he says. The government, he adds, has not made it easy for small businesses, especially the "hustlers" .

Mr Wainaina says they were lied to.

"It doesn't seem like things will be better, you see [the president] lied to us, we are being oppressed, things are becoming difficult. When the cost of fuel goes up, the price of everything else goes up, even electricity. Things are becoming worse."

Even those who still support the government are expressing "a considerable level of unhappiness with the current state of affairs", according to the latest survey by a local polling firm, Tifa.

Its survey shows that 56% of Kenyans think the country is heading in the wrong direction, up from 48% in March.

The polling firm suggests the discontent may be feeding into support for the protests called by the Azimio opposition coalition, led by Raila Odinga, who was defeated by Mr Ruto last year.

At least 24 people have been killed in recent protests

Government data show that the prices of some key food products have risen considerably in the 12 months to June - with the staples - maize, grain and flour - increasing by up to 30%, rice and potatoes by nearly 20% and sugar costing nearly 60% more.

Despite that, in the finance bill which became law on 1 July, the government doubled the value-added tax on fuel products from 8% to 16%, and introduced a 1.5% housing levy on employees' basic pay, with an equivalent amount paid by the employer.

The levy is supposed to go to a fund to construct homes for the less well-off while creating jobs.

Besides that, taxes on sales (Turnover Tax) were tripled to 3% for small businesses, and income tax for high-earning employees was raised from 30% to a maximum of 35%.

The government defends the new taxes - now temporarily suspended by a court - as necessary because of the country's high debts.

It accuses the previous administration of massively adding to the country's debt burden by spending huge amounts of money on infrastructure projects that did not help the ordinary Kenyan.

Mr Ruto served in the previous government as deputy president, but he distanced himself from it after falling out with then-President Uhuru Kenyatta.

He and government officials have told Kenyans that paying the taxes is a short-term "sacrifice" for the future of the country.

But Mr Wainaina is not convinced. Likewise, Edwin Simiyu, a boda boda (motorcycle taxi) rider in Kiambu town near the capital regrets voting for the current administration.

"[The president] said we should give him one year and then we'd see positive changes. Now when he is in, he changes the tune and says we should wait for years before things become better. We are suffering, we have been totally betrayed, we've been forgotten," he says.

Charles Kaindo is hard at work in the same town selling second-hand clothes on a pavement.

The hawker tells the BBC it is unfortunate the government has broken its promises.

He says there will be a time when people will say "enough is enough" - explaining that hard-working people will turn to crime and others "may even take their lives when the suffering becomes too much".

Charles Kaindo says the government broke its promises

But not everyone thinks that higher taxes are a bad thing.

Jane Njeri, an accountant in the private sector, says she does not envy the government - which needs the money to pay off the huge debts that Kenya owes.

The Kenya shilling has been steadily weakening against the US dollar in recent months, making the cost of debt repayments even higher.

"It's not going to be an overnight thing. We are at a bad place, depreciating shilling, debt and unemployment," she says.

The disquiet in Kenya arises from the "sense of contradiction" between the "hustler narrative" about easing the cost of living that was sold during the campaign and the "reality where we are seeing taxes being increased on everyday goods", according to Ken Gichinga, chief economist at business consulting firm Mentoria Economics.

He says rather than focusing on consumption taxes that raise the cost of living, the government should do more to spur private-sector growth.

He argues against the government housing projects being funded by the new levy, saying it is unlikely to resolve either the housing or unemployment problem.

"Lower interest rates, lower taxation, and loosen regulation. Do those three and the whole economy will be able to create jobs. Let the free market work."

However, economic analyst Odhiambo Ramogi says he is convinced that that the president's intentions are noble - though the methods "are wrong".

He says the government should first cut waste before asking ordinary Kenyans to pay more.

The government accepts this point - David Ndii, its chief economic adviser, has acknowledged on Twitter that the government was "wasteful".

Ndindi Nyoro, chairman of the parliamentary budget committee, told the BBC that the government's tax plan was to ensure that government was not digging a bigger debt hole by borrowing more. He said the focus was on creating a balance to ensure what "will make Kenyans take part in baking the national cake".

But a growing number of Kenyans do not think this is working and are taking to the streets to make their point.

Photographer Brian Inganga contributed to this report.

Kenya Protests

Riot policemen fires teargas during clashes with protesters in the Kibera area of Nairobi, Kenya Wednesday, July 19, 2023. Kenyans were back protesting on the streets of the capital Wednesday