KEY TAKEAWAYS
KEY TAKEAWAYS
Kenya’s public protests and deadly violence over proposed tax increases this week highlight some of the country’s most serious challenges: high youth unemployment, deepening poverty and the glaring gap between living conditions for the country’s elite and its urban poor. This social crisis is exacerbated by severe corruption, a stifling foreign debt and a too-violent response by Kenyan police, who have a poor record in handling large demonstrations. Steps to calm this crisis are vital to preserve Kenya’s overall stability, its role as an East African trade hub — and its capacity to serve as a leader for peace, which the United States increasing has relied upon in Africa and elsewhere.
This week’s eruption of protests, and the deaths or injuries of dozens of people amid clashes with police, represent the toughest crisis in the 21 months of President William Ruto’s administration. But Kenya remains East Africa’s most important and influential nation; the United States and other partners should encourage all Kenyans, in government and civil society, to resolve this crisis and help Kenya to address the deeper problems at its roots.
Protests broke out nationwide this week — in 35 of Kenya’s 47 counties, according to the Kenyan newspaper The Nation — over a budget bill in the parliament that would have increased taxes on people’s daily staples, including a 16% duty on bread and 25% on cooking oil. The protest campaign was mainly leaderless and spread largely via Kenyans’ angry discussions over social media.
Young, unemployed Kenyans were prominent in all the demonstrations. Estimates of the nation’s unemployment rate for youth vary, but the problem is undeniably acute. Thousands of school leavers and university graduates struggle every year to find employment, and young Kenyans have grown weary of government corruption and unfulfilled promises to create more jobs.
Restoring immediate peace and sustaining Kenya’s general stability is vital first of all to the 56 million Kenyans, but is important more widely because of Kenya’s regional roles, both economically and in supporting political stability and security. Kenya is the economic and transportation hub for East Africa and parts of Central Africa. The port of Mombasa, the region’s largest, handles cargo for countries as distant as Uganda, Rwanda, Burundi and South Sudan, and eastern parts of the Democratic Republic of the Congo (DRC). Nairobi is the region’s largest financial, commercial and telecommunications center.
Diplomatically, Kenyan officials have been active in trying to resolve conflicts in Ethiopia, Sudan and eastern Congo, and its military has deployed in peacekeeping roles in the eastern DRC and Somalia. Kenya has been a close security partner of the United States and has worked closely with international efforts to counter Al Shabab and other extremist groups in Somalia and the region. Kenya has lent its airports and Mombasa’s port to facilitate U.S. humanitarian operations supplying food and medicine amid crises across East Africa: in Somalia, Sudan, South Sudan, Rwanda and the eastern DRC. Kenya hosts a small U.S. military facility in its north and America’s largest embassy in Africa.
During President Ruto’s state visit to Washington this month, President Biden recognized Kenya’s valuable cooperation on security issues by announcing that the United States had designated Kenya a major non-NATO ally. President Biden applauded Kenya’s decision to send a contingent of police officers to Haiti to help restore peace in that country — where 400 Kenyan officers arrived this week to begin that difficult mission.
Any effective, enduring response to Kenya’s turmoil must address the underlying social crises of poverty and inequality. Kenya’s economy grew well before the COVID pandemic in 2020, in part due to reforms friendly to business expansion. For years, the World Bank and others have noted, Kenya lifted many of its people out of poverty. Nearly 47 percent of Kenyans lived below the national poverty line in 2006, but Kenya reduced that rate to about 33 percent in 2019. And the current government has sustained significant growth, better than 5% last year, in part through the embrace and rapid expansion of its digital technology.
But, as in much of Africa, where improving life expectancies are driving the world’s fastest population growth, Kenya needs extraordinary and sustained economic growth to achieve its vital task of continuing to reduce poverty. A headline from the World Bank just weeks ago tells the difficult story: “African Economies Projected to Grow by 3.4 % in 2024, But Faster and More Equitable Growth Needed to Reduce Poverty.” Any country would face a challenge in meeting the needed growth rates, but, as that report notes, many African states, like Kenya, face special burdens: the depth of past and current economic inequalities and an enormous burden of foreign debt.
Kenya also finds its growth limited by widespread corruption and some questionable economic decisions of past years. Over the past decade, Kenya has invested heavily in major infrastructure projects — a new, standard-gauge railroad from Mombasa to Nairobi, a modern international air terminal in Nairobi, major roads in and around the capital and dam projects. But these projects required heavy foreign loans. Kenya’s domestic and foreign debt now reach $80 billion, approximately 70% of its entire gross domestic product. Debt repayments now eat nearly half of the government’s budget, crimping the country’s ability to sustain the necessary development projects for growth. The debt burden pushes the country toward the instability we have seen this week — and toward the precipice of a major debt default.
For Kenya, like dozens of developing countries, debt burdens are multiplied by the global high interest rates of recent years.
For Kenya, like dozens of developing countries, debt burdens are multiplied by the global high interest rates of recent years. “The global financial architecture is no longer capable of meeting the needs of the world in the 21st century,” notes a recent U.N. report on the global debt problem. “Developing countries must not be forced to choose between servicing their debt or serving their people,” and a reform of international financial architecture “is not only necessary, it is urgent.” Kenya’s upheaval this week is a direct illustration: The government’s effort to fund its budget with increased taxes on essential goods was a breaking point for many Kenyans, especially young, educated and unemployed youth.
Corruption has also slowed Kenya’s economic growth, diverting funds away from productive economic activities. Corruption is pervasive at almost every level of society, from police officers on the street to public procurement practices in government ministries. In the construction of Kenya’s $4.7 billion railroad, there were multiple reports of bribery, nepotism and extortion. Transparency International’s annual Corruption Perceptions Index currently ranks Kenya 126th of 180 countries. A report in March by the Office of the U.S. Trade Representative said corruption is a significant barrier to doing business in Kenya.
President Ruto campaigned for office two years on a pledge to reduce corruption, grow the economy and create jobs; he also promised to encourage major Western countries to reform the international financial architecture to better address the needs of developing countries. To steer Kenya away from more violent economic and political disruptions, he will need to make progress on both.