Kenya
Despite strong growth in the five years prior to the pandemic and since after a brief period of contraction, Kenya’s public debt has surged from 40% of GDP in 2012 to 73% by end-2023 in order to fund mega-infrastructure projects, respond to the Covid-19 pandemic, and navigate climate change-induced droughts, with debt service consuming about half of government revenues (up from 19% in 2019). Kenya entered a 38-month IMF programme in April 2021 which mandated extensive fiscal consolidation: from a 4% of GDP primary balance deficit in 2021 to a 1.7% surplus in 2024/25, amounting to a 5.7 percentage point increase to the primary fiscal balance over the course of the programme. These measures occurred in a context of urgent financing needs for climate adaptation – despite being one of the lowest per capita emitters, Kenya is highly vulnerable to climate shocks including recent droughts, floods, and locust infestations.
Its subsequent, additional RST/RSF loan in July 2023 highlighted the potential economic stability of this vulnerability and the considerable benefits of timely investment in adaptation infrastructure, including conditionalities on climate and disaster risk as well as finance mobilisation (e.g. through carbon pricing and energy reform) and green budgeting. While the RSF programme explicitly referred to Kenya’s NDC and even covered gender, the apparent contradiction with the major fiscal consolidation under the concurrent ECF-EFF programme remained unresolved.
To reach this fiscal target, President Ruto’s government – which had come to power promising a ‘bottom up’ approach prioritizing the poor and marginalized – tabled a Finance Act in 2023 and again in 2024: doubling value added tax (VAT) on fuels from 8% to 16%, raising taxes on food, mobile money transfers, digital content creation, smallholder farmers and salaries, ‘rationalising’ public sector employment, as well as taking a levy from all employees and employers to fund a problematic public-private partnership for ‘affordable’ housing. About half of the projected $2.7 billion revenues were meant to go to debt repayment. While some measures were halted initially through legal challenges, the VAT measures were pushed through. Prices for food staples like maize more than tripled. All fuel subsidies were eliminated in March 2023. On the other hand, private wealth, land holdings and large corporations remained unscathed by the reforms. Analyses of the ‘social spending floor’ in the IMF programme indicated that while Kenya met these floors throughout the programme duration, all social ministries faced cuts in real terms (adjusted for inflation), representing a decline as share of GDP from 3.6% in 2021/21 to 3.2% in 2023/24. At the same time, poverty and living costs increased due to the pandemic, drought, and global inflation, further exacerbated by the expenditure measures. The opening up of Kenya’s energy sector to the private sector, stipulated in the RSF program, also raised concerns about price rises and future challenges to regulation and green industrial policy – in addition to the IMF’s own admission that energy-sector privatisation “lead(s) to higher emissions across all measures.”
These measures therefore prompted mass protests and riots with slogans that explicitly targeted the IMF, met with a brutal police response killing dozens, further stoking public anger. A civil society campaign (Okoa Uchumi) representing over 40 Kenyan organisations called out the inequality, hunger and poverty impacts of the imposed austerity measures, as well as the IMF’s deliberate ignoring of the concerns raised early on by civil society. Nicole Maloba (FEMNET) called the bill “a form of economic violence, particularly against women and girls in Kenya, due to its superficiality, discriminatory nature, lack of consideration for gender issues, and potential to worsen poverty levels”. In the Guardian, Fadhel Kaboub (Power Shift Africa) emphasised that “Kenya can have democracy or neocolonial extraction, but not both – because democracy means addressing the demands of the Kenyan people for jobs, healthcare, education, housing, transportation and basic social protections under a fair and equitable fiscal regime. (…) The fact that Kenya is in a debt trap after decades of following IMF policy prescriptions means that either the IMF is incompetent, or it is engaging in intentional economic entrapment. (…) It’s time to decolonise the Kenyan economy.”
Buttressed by digital organising and a growing Gen Z youth movement, the protests swept the country and expanded to funnel wider discontent about mismanagement of public funds, corruption, and gender-based violence, continuing throughout 2024 and eventually forcing the government to withdraw the bill. Since then, the movement has developed proposals for alternative funding models for public services, as well as starting a trend of self-organised ‘citizen inspections’ of publicly funded projects and programmes.
Organisations coordinated in the Okoa Uchumi campaign continue their critical review of public budgets and related bills, demanding greater government transparency, efficiency, more realistic fiscal projections, and the independence of accountability mechanisms such as a Public Debt Management Office and the Auditor General, whose autonomy a 2024 bill tried to dilute. The campaign’s detailed engagement on debt, monetary, and fiscal policy demonstrate a high level of technical expertise in Kenyan civil society, tracing the policy implications and real-life impacts of public budget numbers while providing detailed recommendations on expenditure prioritisation, revenue mobilisation, public debt management, governance, and data consistency.