July 3, 2024

KENYA: President Announced A Huge Tax Increase To Pay Back Debt To IMF, World Bank. After Calling Protesters Criminals And Killing 39, The President Withdraws Tax Hike. Kenyans Want Him Out.

Global News published July 2, 2024: “Ruto must go!” Kenyan protesters, riot police clash as latest demonstrations turn violent. Riot police fired tear gas grenades and charged at stone-throwing protesters in downtown Nairobi and across Kenya on Tuesday, in the most widespread unrest since at least two dozen protesters died in clashes a week ago.

The nationwide demonstrations signalled that President William Ruto had failed to appease a spontaneous youth protest movement, despite having abandoned plans for tax rises that triggered the unrest last week. “Yes, the president has withdrawn the finance bill, but he is still a liar because there are still things that they are trying to pass as different ills, away from the finance bill, and so for us we are exhausted with the constant lies, with constantly taking us for fools,” protester Foi Wambui said. “We are tired, now we want action.’’

Tuesday's demonstrations began in a buoyant mood but turned violent as the day wore on. In Nairobi, helmet-clad police charged at protesters with shields and wooden clubs, as tear gas bombs exploded in the crowds. Outside the capital, hundreds of protesters marched through the country’s second-largest city of Mombasa, chanting “Ruto must go!”
Al Jazeera English published June 26, 2024: Will the unrest in Kenya escalate? It all started with peaceful protests against a finance bill tabled in Kenya's parliament. The proposed legislation includes tax increases to raise extra funds the government says it needs to pay off public debt. The protests intensified, crowds stormed the parliament compound and the military was deployed. Security forces used live rounds, killing and injuring many. A defiant President William Ruto called the demonstrations treasonous, and promised to take a tough stance on what he called anarchy. So, will the unrest be contained?
CBS News published June 26, 2024: Kenya's president deploys military amid deadly protests over new tax plan. Kenyan President William Ruto deployed the military to try to quell the protests that broke out against the government's plan to raise taxes. At least six people have been killed in the demonstrations and hundreds more are injured. The country's parliament building in Nairobi was also set on fire. BBC News correspondent Barbara Plett Usher joined CBS News with more on the stream.
BBC published June 26, 2024: Kenya's president withdraws tax plan after deadly protests. Kenya’s President William Ruto says he will withdraw a finance bill containing controversial tax hikes after deadly protests which saw parliament set ablaze on Tuesday. In an address to the nation, he said it was clear that Kenyans "want nothing" to do with the bill. "I concede," he said, adding that he will not sign the bill into law. At least 22 people were killed in Tuesday’s protests, according to the state-funded Kenya National Commission on Human Rights (KNHRC).

BBC News, UK local
written by Basillioh Rukanga, BBC News, Nairobi
Monday July 1, 2024

Kenya's President William Ruto says the country will have to borrow more to keep the government running following the rejection of a hugely unpopular finance bill that was going to raise more money in taxes.

The president said he would withdraw the bill containing controversial tax hikes last Wednesday after deadly protests which saw parliament set on fire.

But on Sunday he said dropping the bill had set the country back two years, as he explained the difficulty of being unable to raise extra taxes while facing a huge debt burden.

He said this meant Kenya would have to borrow one trillion shillings ($7.6bn; £6.1bn) just “to be able to run our government”.

This is a 67% increase on what had been planned.

But he also said he was considering cuts in spending across government, including in his own office, as well as reducing allocations to the judiciary and the county governments.

Many protesters objected to the tax rises by saying that the extra money would be wasted.

The extra taxes were supposed to raise about 350bn Kenyan shillings, while about 600bn was going to be borrowed.

According to the president, the proposed tax measures were part of efforts to cut the debt burden of over $80bn (£63bn). About 60% of Kenya’s collected revenues goes to servicing debt.

"I have been working very hard to pull Kenya out of a debt trap... It is easy for us, as a country, to say: 'Let us reject the finance bill.' That is fine. And I have graciously said we will drop the finance bill, but it will have huge consequences,” the president said while speaking to journalists on Sunday night.

Mr Ruto said the rejection of the budget would affect the employment of 46,000 junior secondary school teachers who have been on temporary contracts, as well as healthcare provision.

He said the government would be unable to support dairy, sugarcane and coffee farmers, including by paying off debts owed by their factories and cooperative societies as had been planned.

He however said he was considering the issues that had been raised by those who opposed the finance bill, such as cutting spending by his office and scrapping budgets for the First Lady and the deputy’s president’s spouse.

The president's latest remarks about more borrowing have faced criticism, with economist Odhiambo Ramogi telling the BBC that it was not necessary or prudent to borrow more as this would put Kenya in "a greater position for debt distress".

He said the president's remarks on reducing spending lacked commitment as he had signed the spending plans into law last week. He said that MPs would "absolutely" need to revise the budget.

There has been a similar discussion on social media.

"Why do we need to borrow one trillion shillings and still fail to employ the 46,000 teachers whose budget is 18 billion shillings?" a Kenya asked on X (formerly Twitter).

Despite the withdrawal of the finance bill, there has been continued anger against the government, with more protests planned for this week.

The protesters are demanding more accountability by the government, with some calling for the president to resign.

They are also aggrieved by what they see as insensitivity by the government to their plight and accuse the police of responding brutally to the protests.

At least 23 people were killed and many others wounded, according to a doctors' association. On Sunday the president said the police had “done their best they could”. “If there are any excesses, we have mechanisms to make sure that [they] are dealt with,” he said.


The Star, Kenya local
written by Julius Otieno
Saturday June 29, 2024

A human rights organisation now wants international lenders to suspend any further granting of loans to the debt-stuck Kenyan government.

The International Center for Policy and Conflict asked the International Monetary Fund, the World Bank and other lenders to cease their support until the current debt stock is audited.

“All lenders, both domestic and foreign, must stop forthwith lending any loans to the Kenya government until the independent forensic audit is completed,” ICPC Executive Director Ndungu Wainaina said.

In a statement on Friday, Wainaina asked the creditors to initiate a comprehensive independent audit of the country’s domestic, foreign, concessional and commercial debts.

“While independent debt audit is proceeding, development partners supporting specific essential service sectors can continue with support to those sectors,” he said.

The audit should also include the total amount of state guarantees to all government-owned enterprises and agencies to track exactly what has happened with the loan money.

“For independent forensic audit transparency, it will be important for the process of identifying the audit agency to be made public,” he said.

In addition, Wainaina said the country’s 2024-25 budget be completely overhauled and a new one prepared in strict adherence to the Constitution and budget laws.

The country is debt-choked and cannot withstand any more loans.

Kenya’s debt stock currently stands at Sh11.2 trillion or 67 per cent of the country’s Gross Domestic Product from 46 per cent in 2010.

“The debt service payments are equivalent to 63 per cent of ordinary revenue and interest repayment has risen to 30.1 per cent of ordinary revenue,” he said.

He wants the government to consider entering into part of the bonds and loans debt restructuring negotiations for a minimum period of five years.

“It is no longer tenable to rely only on fiscal adjustments with supplementing funding from IMF and World Bank,” he said.

Citizens cannot see or attribute direct improvement to their living standards with this humongous debt.

“Kenya is facing significant debt distress which is sinking the economy. Debt is causing unacceptable economic and financial throbbing to Kenyans. The country is possibly heading to default if already it is not there,” he said.

Citing reports by the Parliamentary Budget Office, Wainaina reckoned that the economy is in real danger of a liquidity crisis.

This, he added, is demonstrated by the inability of the government to meet its essential development and services obligations.

“The country’s economic crisis is consequent of fiscal profligacy financed by borrowed and stolen unexplained and illegal debt,” he said.

Crucial debt sustainability indicators including debt service to revenue ratio and debt to GDP ratio are deeply troubling.

The revenue collections, he added, are falling despite high taxes and the debt repayments surging perilously.

“The unpredictable fluctuating exchange rates, adverse fiscal conditions and natural disasters are only making matters riskier by the day,” Wainaina said.

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