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Kenya’s President William Ruto has dismissed almost his entire cabinet after mass, youth-led protests against proposed tax rises last month forced him to withdraw a controversial finance bill.
In a televised address to the nation on Thursday, Ruto said that, “after listening keenly to what the people of Kenya have said”, he was sacking all cabinet secretaries and the attorney-general immediately, with the exception of the prime cabinet secretary and the foreign secretary.
The dramatic move comes after human rights groups alleged the police killed at least 39 protesters last month in violent demonstrations against tax increases that the government said were necessary to meet debt repayment obligations. Ruto abandoned the tax rises, saying instead his government would cut expenditure, starting with its own costly bureaucracy.
“If you look at the trajectory he’s been taking since the failure of his brute-force tactics, it’s been a series of what can only be described as capitulations,” said Patrick Gathara, a political commentator, after the reversal of Ruto’s initial determination to face down the demonstrators.
“From the withdrawal of the finance bill, to the announcement of austerity measures for government and now to firing his cabinet, at every point he’s conceding to demands of protesters,” Gathara said.
In his speech, Ruto, who was elected on a platform of helping Kenya’s poor, the so-called “hustlers”, said he would form a new government that would implement “urgent and irreversible” measures to address social issues and “deal with the burden of debt”.
Ruto has sought to lay blame on the previous government of Uhuru Kenyatta for overborrowing, both from China and commercial lenders, and for running a bloated administration. Critics point out that Ruto was Kenyatta’s deputy president for nearly a decade.
Carlos Lopes, professor in the Nelson Mandela School of Public Governance at the University of Cape Town, said that, like other African states, Kenya was juggling its external debt obligations with the need to keep its own citizens on-side. The crisis in Kenya showed it was a mistake to prioritise servicing debt, he said.
Gathara added: “We do need to have a discussion about what we owe, what we have done with that money, and do we need to pay it back?”
Protesters have criticised lenders, including the IMF, for squeezing Kenya, but Gathara said they also blamed their own politicians for squandering borrowed money on expensive projects. “The primary blame is on our own elites. Our understanding is that these people have bled us dry,” he said.
This week Moody’s cut its rating for Kenya to Caa1, the agency’s marker for very high credit risk, after the government dropped a target to trim the budget deficit to 3 per cent of GDP this year, which would have been the lowest in more than a decade.
“The rating downgrade has crystallised rising market concerns about Kenya’s fiscal consolidation path based on an ambitious revenue mobilisation programme outlined by the IMF,” Citi analysts said this week.
Kenya is facing heavy debt payments in the years ahead after it opted to refinance at a higher interest rate most of a $2bn US dollar bond that came due this year.
About $1.5bn of the bond that Kenya issued at about 7 per cent a decade ago was replaced with debt yielding close to 10 per cent. The yield on the new bond rose to close to 11 per cent during the protests and remains above 10 per cent.