Much ink has been spilled over the deep crisis of legitimacy undergirding the mass protests against the government of Kenyan president William Ruto over his controversial finance bill, including incisive analysis about the role of the International Monetary Fund (IMF). The protests – and the government’s violent response, which led to the deaths of over 50 people and the injury of over 400 more – did not come out of nowhere; they are an escalation. Tensions have been mounting for years as Kenya’s government has accelerated its austerity agenda to repay the country’s ballooning debt. Since before President Ruto took office in 2022, the government’s budgets and fiscal reforms have sought to increase revenue to pay off foreign investors by squeezing the working class and the general population.

Workers in Kenya have consistently fought back and warned of the need for a new approach grounded in fiscal justice, strong public goods, and an international financial architecture that promotes equitable development rather than unpayable debts. To regain public trust and rebuild democratic legitimacy for their policies, the Kenyan government and the international financial institutions should listen to these workers and reverse the policies that have done so much harm.

There is no housing justice without tax justice

Earlier this year, President Ruto signed the Affordable Housing Act, which imposes a housing levy of 1.5 per cent on workers’ pay to fund the construction of 200,000 affordable housing units every year. This law, which was initially part of the 2023 Finance Law, is one of a series of levies that have been raised on everyday people, including the doubling of the sales tax on fuel. The housing levy was resurrected from a 2019 law pushed by then-president Uhuru Kenyatta with Ruto serving as deputy president at the time. Already then, the measure was met with fierce opposition by the Central Organization of Trade Unions Kenya (COTU-K) and the Kenya National Union of Teachers, and it was ultimately suspended by the courts.

Although the law aims to address the crisis of housing affordability in Kenya’s urban centres, it fails to adequately consider the material conditions of Kenyans. The 80 billion Kenyan shillings (US$615 million) per year raised through the levy falls far short of the 400 billion Kshs (US$3 billion) needed to build the 200,000 housing units promised by the government every year. At the same time, the slew of new taxes would further burden a population still reeling from the aftermath of the Covid-19, making affordable housing even more elusive for the average Kenyan. Unsurprisingly, as it did in 2019, the housing levy sparked a wave of protests as well as a legal challenge.

The opacity of the budgetary process, the extraordinary burden of debt servicing costs, and the outsized role of external actors, including the IMF, all contribute to Kenyans’ mistrust in their government’s capacity for responsible fiscal management.

When an estimated $90 billion leaves the African continent every year in illicit financial flows while corporate and individual wealth remain undertaxed, tax justice must be at the heart of fiscal policy.

Instead, despite popular suffering and a growing legitimacy crisis, in its July 2023 loan reviews the IMF advised the government to remain committed to existing programs rather than change course. Nevertheless, there have been some encouraging developments such as the inclusion of the COTU-K on the board of the Affordable Housing Fund, which will allow for greater transparency and monitoring of the funds.

Public disinvestment, privatised development

In mid-March 2024, Kenyan doctors and healthcare workers went on strike for 56 days, despite violent government crackdowns, to demand the full implementation of their collective bargaining agreement signed in 2017, including the payment of their salary arrears and the immediate hiring of trainee doctors. The failure to hire trainee doctors is particularly disappointing given that in its Kenya Vision 2030 the government cites the lack of adequate staff as a constraint to healthcare delivery. While the Kenya Medical Practitioners Pharmacists Dentists Union eventually returned to work, recent mass protests and the dissolution of the president’s cabinet have revived the contestation from healthcare workers who have grown frustrated with stalled negotiations and broken government promises.

While the public health sector remains understaffed and underfunded, the Kenyan government relies on the private sector to fill in the gaps.

Kenya has one of the highest concentrations of healthcare investments by development finance institutions in the world, and rather than fostering development this has entailed macabre consequences for patients and their families including imprisonment for unpaid bills, barriers to access, and crushing personal debt.

The International Finance Corporation (IFC), the World Bank Group’s private sector lending arm, is angling to play a leading role in the proliferation of private hospitals and the financialisation of healthcare. Kenyans have already experienced the harmful consequences of the privatisation of key public goods with the IFC’s financing of Bridge International Academies, a for-profit education chain with a record of negligence and abuse that has brought scandal to the institution.

Financing for development: a worker-centric approach

The Ruto government’s frenzied implementation of austerity measures serves to repay a $2 billion Eurobond that was maturing in June 2024 – a task made difficult by a devalued shilling and stressed foreign exchange reserves. Although there’s much to criticise about the Uhuru-Kenyatta/Ruto governments’ debt-fuelled spending in the last decade, the financial pressure the country is experiencing is systemic and shared by many countries in the Global South. The pandemic, severe droughts under climate change, and international geopolitical crises are shocks beyond the control of the Kenyan government with devastating economic consequences. Furthermore, as local financial markets in countries like Kenya grow and open up to outside investors, they become more exposed to the whims of global finance. With new countries, like China, emerging as important sources of bilateral lending, geopolitical tensions have made debt restructuring more convoluted. At the same time, low-income countries have seen sources of concessional finance dwindle in recent years.

As indicated by the series of debt crises in Sri Lanka, Zambia, Ghana, and a growing number of other countries, the international financial architecture is undermining the development it was meant to promote and deepening global inequalities, leaving the global majority behind.

Workers in Kenya and around the world have been consistent in their warnings against austerity policies like those pursued by President Ruto, and as the ongoing unrest and tragic repression in Kenya demonstrate, the burdens of these policies fall far too heavily on people who cannot bear them. As Kenyans forge a path forward in their own country and world leaders consider reforms of our international financial architecture, workers are leading the way with calls for systematic sovereign debt reform and profound changes to the global financial system.