William Ruto was the Deputy President of Kenya for the last decade, under an administration that failed to address the economic crisis in East Africa's wealthiest and most stable nation. Food and fuel prices are surging, unemployment is high and public debt rising. One wonders why the solutions he presents in his election manifesto were not successful during his 10 years as vice president?
The country’s currency, the shilling, has sharply depreciated. This means Kenya's Treasury will face difficulties paying back its huge dollar-denominated debt. The public debt rose from $16 billion in 2013 to $71 billion in 2021. As a result, Kenya spends nearly 30 percent of its state revenue on interest payments. With a debt-to-GDP ratio of 69.1 percent, Kenya is classified as being at high risk of distress by the International Monetary Fund. A Bloomberg Economics assessment
The World Bank and Euro bond holders account for nearly half of Kenya’s external debt, at 28 percent and 20 percent respectively, based on data from the Treasury. China, whose loans have gone on infrastructure, including the Standard Gauge Railway, is responsible for 19 percent of Kenya's external debt. The coronavirus pandemic hurt tourism, one of Kenya's foremost sources of foreign exchange, while soaring energy prices are threatening to scuttle the recovery that began in 2021. With global interest rates shooting up, it is going to become costly for Kenya to borrow more, or pay back its lenders. In addition to the global effects of war in Ukraine, Kenya is caught in the middle of East Africa’s worst drought in decades. Inflation has inched up toward 9 percent, the highest in five years, and unemployment is reckoned to be at 14 percent.
All of this is laying combustible material in the foundations of Kenyan society. An almighty crisis is being prepared, and intensified class struggle will be the inevitable result.
Brewing anger
Despite Kenya being the wealthiest country in East Africa, most Kenyans live in poverty, unable to afford basic necessities of life. The conditions became so unbearable that Kenyans took to the streets in early July in what was dubbed the Njaa Revolution. Hundreds poured into Nairobi to protest the high cost of living, saying the price of basic commodities including cooking oil, maize flour, wheat flour, and sugar had doubled, putting pressure on households struggling to make ends meet.
The protestors, who were carrying sufurias, empty packets of sugar and flour, traversed Nairobi’s Central Business District and terminated their protests at the Office of the President at Harambee House. The protests led to the government announcing subsidy measures for maize flour, which only worsened the situation, with an artificial shortage of maize flour leading to the suspension of the programme. The economic crisis in Kenya is a clear indicator of the failure of capitalism in Kenya.
