Conditionality

Analysis

Kenya’s growing youth movement for fiscal justice rejects IMF-mandated austerity

16 October 2024 | Guest analysis

Gen Z protests in Nairobi. Kenya, on 25 June 2024. Credit: E-ROSH/Shutterstock

Over the past months, Kenya’s political landscape has been dominated by a groundswell of protests. Reminiscent of Kenya’s history of university student-led activism against authoritarianism, youthful protestors are organising in a self-proclaimed leaderless, tribeless and fearless movement. This new set of activists (mostly people born between the mid-to-late 1990s and the early 2000s – i.e. Generation Z) are denouncing Kenya’s ethno-political polarisation and social inequality and confronting the state, currently under the leadership of President William Ruto.

A major catalyst was a finance bill tabled in the National Assembly in June laying out the government’s fiscal plan for the financial year 2024/2025 (FY24/25). This included raising an additional $2.7 billion in taxation by expanding the scope of liable goods and services, with new levies on basic commodities like bread, sugar and cooking oil. The International Monetary Fund (IMF) issued a press release on a staff level agreement as part of Kenya’s multiple current financing arrangements with the Fund, including via the Resilience and Sustainability Trust (see Inside the Institutions, What is the IMF Resilience and Sustainability Trust?), containing measures it argued were needed to safeguard debt sustainability, including measures underpinning Kenya’s budget for FY24/25. These measures would have included broadening the domestic tax base alongside public expenditure and wage bill reforms.

What began as digital organising on social media platforms soon led to mass street protests with a call to occupy parliament buildings in the capital city Nairobi to pressure legislators to reject the bill. The protests spread rapidly to towns across the country and eventually Ruto was forced to withdraw the bill. While accusing the government of making reckless financial decisions, protestors also turned the spotlight on the IMF and World Bank for their role in Kenya’s escalating debt and social crises.

While accusing the government of making reckless financial decisions, protestors also turned the spotlight on the IMF and World Bank for their role in Kenya's escalating debt and social crises.

Young Kenyans reject IMF and World Bank’s economic prescriptions

The IMF and World Bank are central in defining government policy in Kenya, including recent austerity measures introduced under its IMF loan programmes. In 2023, a 1.5 per cent housing levy for employed people was introduced despite 69 per cent of Kenyans opposing it as well as a new raft of taxes that would hit poorest people the hardest. In the same year, a fuel subsidy was reintroduced after public protests over its removal, while value added tax (VAT) on fuel doubled from 8 per cent to 16 per cent.

Proposed tax measures made international headlines as the reason behind the protests this year, but there are wider, interwoven motivations connected to collapsed and under-resourced public services, high youth unemployment, gender-based violence, rampant corruption, misuse of public funds and the flaunting of wealthy lifestyles by out of touch politicians. Public anger has been stoked further by the killing of protesters by security agents, as well as the beating, abduction and disappearance of protestors, prompting the IMF to release a tepid response in June to the state violence.

In the lead up to the #OccupyParliament and #RejectFinanceBill2024 protests, Kenya’s doctors went on strike in March, citing the government’s failure to honour a collective bargaining agreement (CBA) signed in 2017 following the country’s longest doctors strike. Health worker strikes have consistently been about poor pay, poor working conditions and dilapidated, short-staffed public health facilities. Two years before the 2017 strike, the government launched a controversial World Bank-backed medical equipment leasing public-private partnership (PPP) worth $432 million that raised major questions over what informs government priority setting. Echoing the views of health workers who felt that these funds would have been better spent on expanding maternal healthcare, Kenya’s auditor general famously described the scheme as a “betrayal of the trust of the taxpayer.”

Gender-based violence has also been on the agenda, with some of the young women involved in the June protests against the finance bill having galvanised thousands of protestors in January to decry a rise in femicide and government inaction – including by failing to fund the public services needed to prevent and respond to it.

Youth movement pushes for more equitable and transparent public spending

Having defeated the finance bill, young activists have since shifted their attention to a new funding model for public universities. Intended to address chronic underfunding while making funding available to students from low-income backgrounds, criticisms of the model centre around potential impacts on the quality of education and the creation of further social inequality. President Ruto has since constituted what many consider to be a bloated committee to review the model, once again bowing to pressure from student protestors alongside university workers unions.

Young Kenyans want to see the government be more transparent about its borrowing and spending, cut spending on luxury items, prosecute corrupt officials, remove unfair taxes and deliver universal public services. A recent phenomenon of self-organised citizen inspections of publicly funded programmes and infrastructure (many of which have been found to be ‘white elephant’ projects) demonstrates that this national political moment is simultaneously about opposing retrogressive taxation and ensuring state accountability for tax revenues. It is about making public funding work for the public. It is also a matter of sovereignty. Flag-waving protestors invoked Article 1 of the national constitution that establishes sovereign power as belonging only to the people of Kenya, exercised directly or through their democratically elected representatives. With this sovereignty consistently undermined by the policy conditionalities of the IMF and World Bank, we expect that they, and the broader undemocratic global financial architecture, will come under increasing scrutiny from youth protest movements in the months ahead.