Tough call for Kenyans and for Ruto

Kenyan President William Ruto seemed to have forgotten the simple lesson from history. People will not tolerate taxes on bread. When bread becomes scarce, or when bread becomes costly, then it is the last straw that breaks the back of the people.

Ruto’s budget proposals imposed 16 per cent sales tax on bread and 25 per cent duty on cooking oil, 16 per cent goods and services tax (GST) on specialized hospitals. And these tax hikes were supposed to raise $2.7 billion in additional revenue. Ruto felt that his hands were tied though in his 2022 presidential election campaign he described himself as a “hustler”, a soubriquet for Kenyans trying to make ends meet. It is not a surprise that Kenyans were outraged by the tax proposals. It was a spontaneous outburst on the part of the protesters. When angry Kenyans came out on the streets of Nairobi and attacked parliament building, the security forces opened fire and killed 23 persons.

But Ruto realised that using force against angry people who are feeling the pinch of a hard economy will not silence them. So he announced that he is withdrawing the finance bill, and effectively taking back the tax. He promised to negotiate with the youth. Initially he had defended the tax hike saying that there was no alternative. Kenya’s economic crisis goes a long way back. But with Ruto at the helm, he cannot pass the buck. He seems to have realized it. The protesters are still persisting in the violence. The number of protesters has decreased after the president announced the withdrawal of taxes. But some of the protesters are pressing for the resignation of Ruto and his MPs. Not everyone is convinced.

The advantage that Ruto has is that the protesters are not organized. People who are opposed to Ruto are keen to push the protests and make it a larger one of pushing Ruto out of office. Whatever may be his credentials as a “hustler” like other common Kenyans, Ruto is a political “hustler” alright, with a 30-year run in electoral politics.

The tax hikes were approved by parliament despite protests, and that is what has angered protesters more. That is why, some of them want Ruto and his MPs to go. Interestingly, the tax proposals were approved by 195 and rejected by 106 in a house of 359. The economic crisis is being attributed to Uhuru Kenyatta’s presidential term, and Ruto was the vice-president. Kenyatta launched ambitious projects based on foreign loans, especially from China. The spending could not be sustained. The International Monetary Fund (IMF) and the World Bank are breathing down the neck to curb expenditure, raise taxes. The economic situation of the country is such that it cannot tighten its belt anymore. The cost of living crisis, which has become a universal phenomenon, spanning the developed and developing economies, makes life more painful in developing economies like Kenya. Ruto sounded quite confident when he delivered the New Year message in January this year. He said that the country had turned the corner, and that food production has increased thanks to the subsidy for pesticides provided by the government. Ruto felt that Kenya would reach a position when its food import would be reduced to zero. He also felt that Kenya would be able to pay off its external debt. But in six months, things have taken a bad turn. Given the intense political rivalry, which is both volatile and corrosive, it will be difficult for Ruto to manage a difficult economy and still maintain political stability. Election verdicts have been continuously challenged and the Kenyan Supreme Court had upheld some and ordered fresh elections in other instances. It is a tough call for Kenyans and for Ruto.