Kenya’s Economic and Political Crisis: Why William Ruto is Unfit To Be President

In the wake of widespread anti-tax protests and mounting discontent, President William Ruto's administration is facing its most serious challenge since taking office.

The controversy surrounding the Finance Bill 2024 has not only ignited mass demonstrations but also shaken international investor confidence, raising serious questions about the country's economic stability and Ruto's capacity to lead.

The Genesis of the Crisis
The Finance Bill 2024 proposed significant tax hikes, including a 16 percent value-added tax (VAT) on essential goods such as bread, and higher excise duties on cash transfers and imported sweets. These measures were seen as necessary steps to address Kenya's fiscal deficit and comply with the International Monetary Fund (IMF) requirements. However, they also placed a heavy burden on ordinary Kenyans, already grappling with high living costs and economic uncertainty.

Youth-Led Protests and Government Response
The initial opposition to the Finance Bill quickly evolved into a broader movement demanding political and economic reforms. The #RejectFinanceBill2024 protests, largely driven by Gen Z, grew into the #7DaysOfJustice campaign, symbolizing a wider call for justice and accountability. The protests turned deadly on June 25, 2024, when demonstrators clashed with security forces, leading to fatalities and widespread condemnation of the Ruto government's heavy-handed response.

Senator Crystal Asige captured the sentiments of many when she addressed the Senate, saying, "You will never convince our generation that you can ever be trusted, ever again. When young people marched patriotically, wearing Kenyan flags on their backs and raising their voices, you responded with bullets and death. And NOW you have supposedly ‘heard’ and want dialogue? For 20 months you have been speaking, it’s our time now."

Economic Fallout

The unrest has significantly impacted Kenya's financial markets. International investors have raised their risk ratings on Kenya’s Eurobonds, causing yields to spike. The yield on Kenya’s 10-year Eurobond maturing in 2028 rose to 10.03 percent, while the yield on the 12-year sovereign bond maturing in 2032 increased to 10.34 percent. These figures reflect heightened concerns about the country's ability to meet its debt obligations amidst escalating political instability and economic disruption.

The Nairobi Securities Exchange (NSE) also felt the impact, with the market capitalization dropping by Sh11.8 billion to Sh1.734 trillion on the day following the protests. This volatility underscores the broader economic risks posed by the current political turmoil.

International Implications

The crisis has drawn international attention, with warnings from economic analysts about the potential long-term effects on Kenya's economic outlook. Jason Tuvey, deputy chief emerging markets economist at UK-based Capital Economics, noted, "The escalating protests in Kenya will add to the near-term headwinds facing economic activity as well as raise further question marks over the government’s ability to push through fiscal consolidation measures. That could ultimately cause fears of a sovereign default – which had subsided earlier this year after a Eurobond buyback – to build again."

Ruto's Leadership Under Scrutiny

President Ruto’s handling of the protests and his broader economic policies have come under intense scrutiny. The withdrawal of the Finance Bill 2024, while a temporary relief, has not addressed the underlying issues of trust and governance. The youth, in particular, feel betrayed by an administration that promised change but has delivered policies perceived as oppressive and out of touch with their realities.

Senator Asige's call for immediate action and her demand for Ruto’s resignation reflect a broader sentiment that incremental changes and promises are no longer sufficient. "We want to wake up in the morning with budget allocations reworked, with the Appropriations Bill overhauled, your MPs sacked, your Cabinet Secretaries sacked, the wheels of Constitutional amendments to begin turning, and your resignation on Gen-Z's desk for them to decide whether to accept," she stated, capturing the urgency and depth of the public's demands.

Practical Applications and Path Forward

For the common Kenyan, the implications of this crisis are profound. The instability and economic uncertainty directly affect livelihoods, from fluctuating food prices to job security. Therefore, the need for a stable and transparent government that prioritizes the welfare of its citizens over political expediency is more critical than ever.

1. Economic Reforms: Immediate steps should be taken to rework budget allocations and focus on reducing the fiscal deficit without placing undue burdens on the most vulnerable populations. This includes reassessing tax policies and prioritizing essential services and infrastructure.

2. Political Accountability: The government must address corruption and inefficiency within its ranks. This could involve the dismissal of ineffective MPs and Cabinet Secretaries and implementing stringent oversight mechanisms.

3. Constitutional Amendments: Initiating the process for constitutional amendments to ensure greater accountability and transparency in governance is essential. This could include measures to enhance checks and balances within the government and protect citizens' rights.

4. Youth Engagement: Given the pivotal role of the youth in the protests, their voices must be incorporated into the decision-making processes. Establishing youth advisory councils and ensuring their representation in key policy discussions can help bridge the trust deficit.

5. International Relations: To restore investor confidence, Kenya must engage transparently with international stakeholders, demonstrating a commitment to fiscal responsibility and political stability.

The current crisis in Kenya is not just a political or economic issue; it is a reflection of deep-seated frustrations and a call for systemic change. President Ruto's administration faces a pivotal moment where actions, not words, will determine the country's future. By addressing the immediate concerns and laying the groundwork for long-term reforms, Kenya can navigate this turbulent period and emerge stronger. However, this requires genuine commitment to change and an unwavering focus on the needs and aspirations of its citizens.