Kenya’s Ruto Faces Backlash Over Tax Plan as Protests Rock Nation

Since taking office in 2022, President William Ruto has sought to stabilize Kenya’s finances and assert his leadership. However, recent attempts to impose new taxes have led to widespread protests, resulting in violence and reevaluating his economic strategies.

Ruto’s Reforms Face Turmoil as Tax Hike Sparks Protests and Threatens His Progress

According to Bloomberg, had made remarkable progress in both areas until recently. Ruto, aged 57, has hosted the first pan-African climate summit and is the first African leader in 16 years to secure an official US state visit. He has refinanced euro bonds, secured the International Monetary Fund's assurance of relief, and orchestrated a rally in his nation's equities and currency. Additionally, he has dispatched Kenyan police to combat gang violence in Haiti.

However, a mere few days can alter everything. He is currently being confronted with protests from thousands of young Kenyans demanding his removal following a violent, unsuccessful attempt to impose new taxes. The levies incited nationwide demonstrations, which would have resulted in a significant increase in the cost of essential items such as bread and diapers. Before Ruto ultimately yielded, at least 41 individuals were slain in confrontations with law enforcement and soldiers.

Ruto's proposed tax increases were the most recent in a string of levies that have already placed a financial burden on the average Kenyan. Zakayo, the Swahili term for the biblical revenue collector Zacchaeus, was bestowed upon him due to his fondness for enacting new taxes.

However, his credibility had already been compromised before the demonstrations and the subsequent police shootings of protesters.

Ruto Faces Criticism for Hypocrisy Amid Tax Hikes and Austerity Measures, Struggles to Regain Trust

Ruto had initially advocated for austerity. In a speech one month ago, he told citizens, "I must lead from the front, just as I advise others to tighten their belts." Mine must be the starting point.

When he experienced this sentiment of shared sacrifice, he attempted to impose a 17% increase in the budget for his wife's office. Since then, that measure, in addition to other incentives, has been eliminated. In the interim, the Kenya Private Sector Alliance stated that the planned tax increases could be funded by reducing waste and non-essential expenditures rather than further burdening a population already struggling with high prices before the protests.

Kenyans were understandably incensed by Ruto's arguably hypocritical stance, which involved taxing the impoverished while financing his wife's office (she was not elected). Since 2019, the wages of those employed in the private sector have decreased by 9% when adjusted for inflation, and many individuals are currently unemployed.

Ruto prioritized restoring the nation's finances, which had been in disarray following his predecessor's actions. However, his behavior and tempo have placed him in a precarious situation. The police's brutality in response to the demonstrations has resulted in him being despised by his people, particularly the younger generation of Kenyans.

Since then, he has attempted to initiate a national dialogue with the nation's youth to reestablish stability; however, his efforts at reconciliation have yielded minimal results.

Additionally, he is confronted with an uphill struggle in the context of the broader globe. Ruto may soon be required to revert to international markets to address the $2.3 billion deficit that the tax bill's absence has created in his budget.

Ruto Plans Spending Cuts and Loans to Offset Tax Bill Withdrawal, Faces Challenges Similar to Other African Leaders

On July 5, Ruto said Kenya’s National Treasury will slash expenditures and take on more loans to compensate for the bill’s withdrawal. He said the Treasury would cut spending by 177 billion shillings ($1.38 billion) and borrow the balance.

Ruto is not the first African leader to backtrack on an economic program—Nigeria’s Bola Tinubu had to partially restore gasoline subsidies, which he had slashed shortly after taking power in 2022 to head off unrest. His effort was ostensibly to fill budget holes caused by spendthrift predecessors.

However, it has become apparent that many Africans are understandably reluctant to pay the price for their political leaders' profligacy. While national finances have to be put on a sound footing, such measures must be taken. If they are to endure, they must be sustainable, and their burden should be shared equally.

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