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Kenyan protests over new taxes leave five people dead

Protesters carry an injured man as others lie on the ground outside the Kenya Parliament during a nationwide strike to protest against tax hikes and the Finance Bill 2024 in downtown Nairobi, on June 25, 2024. Kenyan police shot dead one protester near the country's parliament Tuesday, a rights watchdog said as demonstrators angry over proposed tax hikes breached barricades and entered the government complex, where a fire erupted. The mainly Gen-Z-led rallies, which began last week, have taken President William Ruto's government by surprise, with the Kenyan leader saying over the weekend that he was ready to speak to the protesters.  (Luis Tato/AFP/Getty Images North America/TNS)
By David Herbling and Simon Marks Bloomberg News

Kenyan police fired on anti-government protests in Nairobi, leaving at least five people dead as demonstrators stormed the National Assembly where lawmakers passed a raft of controversial new tax measures.

Thousands of largely peaceful protesters converged on the National Assembly building by Tuesday afternoon as part of nationwide protests aimed at shutting down the economy over tax hikes President William Ruto is pushing through despite widespread discontent.

The death toll may be as high as eight, according to broadcaster KTN. At least 31 people were injured, including 13 who were shot with live bullets, rights group Amnesty International said in a statement.

The sound of live ammunition and tear-gas cannisters exploding rang out across the city as police tried to disperse stone-throwing protesters chanting “Ruto must go!” The violent police crackdown came as protesters breached the National Assembly, a fire broke out in the Senate building and the authorities disrupted the internet and threatened to shut down local news outlets.

Ruto’s administration proposed the new taxes in an attempt to improve government finances, address its high debt ratio and access more International Monetary Fund financing. Lawmakers in his ruling coalition pushed through a large number of them, but dropped some of the most controversial ones — including proposed levies on sanitary pads, bread and cars.

“The deaths, injuries, and arrests of protesters are alarming, reflecting a troubling trend of aggressive responses by Kenyan police, even towards peaceful demonstrators,” said Jervin Naidoo, a political analyst at Oxford Economics. “Ruto’s political legitimacy may never recover from the sight of Kenyans lying dead in the streets of the capital.”

The yield on Kenyan dollar bonds maturing in 2031 climbed three basis points to 10.67% by 5:18 p.m. in Nairobi. Those due in 2028 climbed 13 basis points to 10.33%. The shilling held on to gains that have helped make it the best performer this year among currencies tracked by Bloomberg.

Taxes Dropped

Protesters have demanded that legislators scrap the entire bill and want the administration to focus on rooting out corruption and ending non-priority spending. They’ve vowed to return to the streets throughout the week.

“We are defending our future against this finance bill. The tax is too high,” said Derick Nandwa, 20, a computer science student. “We don’t want amendments. We reject it fully.”

Other proposed levies that were scrapped in the vote included those on mobile-money transfers, banking services and imports of various goods including diapers and rubber tires. Lawmakers retained duties on products such as batteries and mobile phones, along with an increase in an import-declaration fee and higher betting taxes.

Ruto has 14 days to assent to the revised measures, or ask parliament for more changes.

The National Treasury introduced the bill with the aim of raising an additional 302 billion shillings ($2.4 billion) for its 2024-25 budget. The government’s move to dial back some of the levies a week ago will create a 200 billion-shilling shortfall, according to Treasury Secretary Njuguna Ndung’u.

To fill the gap created by the concessions, lawmakers approved an amendment to increase an import tax, the proceeds of which help to finance the operations of a Chinese-built railway. A new proposal will be introduced to increase a fuel levy by 39%.

The Treasury may also resort to borrowing more or introducing other tax measures. The nation’s debt — equivalent to about 67% of GDP — is at high risk of distress, according to the IMF.

Under an IMF program agreed in 2021, Kenya committed to borrow less, slash government spending and boost revenue collection. That has made the Washington-based lender an unlikely villain of the protests, where its name is plastered on posters and denounced by angry crowds.

“The IMF is driving this whole thing,” Smiley Mumbua, a 33-year-old technology student, said during the protests. “They are putting too many conditions on us.”

The IMF hasn’t provided comment on the situation since protests erupted last week.

Kenya isn’t the only country to witness such demonstrations. Last year, Pakistan saw protests triggered by IMF-recommended austerity measures, while decades ago Indonesia was wracked by street violence and looting as the government pushed through the lender’s plan.

—With assistance from Bella Genga and Eric Martin.