For weeks, young people in Kenya have been protesting against corruption and poor governance in the African country. But anger at international creditors is also driving them onto the streets.
Kenyan youth demonstrate against nationwide tax increases and poor governanceImago / ZUMA Press Wire
For weeks, young people in Kenya have been taking to the streets. They want the government to do its job and use their tax money properly. But the anger is also directed against institutions such as the International Monetary Fund (IMF) and other international creditors.
A significant portion of taxes in Kenya goes towards paying off loans every month. According to the Jubilee Initiative, which campaigns for debt relief, a quarter of state revenue goes to foreign lenders each year, in addition to loans from banks and institutions in Kenya.
Kenya’s debt has been rising for years
In particular, the government under former President Uhuru Kenyatta (2013-2022) has regularly borrowed abroad, for example from the Chinese government, the IMF and institutions such as the African Development Bank. In total, Kenya is estimated to have more than $80 billion in debt to lenders at home and abroad.
Kenya’s current debt to the IMF amounts to around 3.4 billion US dollars, and Kenya can borrow up to 3.9 billion in total until April 2025. Kenya takes out the majority of the loans at a “market-like interest rate” of around four percent, which Germany would also currently pay on the private market. But the East African country also pays additional surcharges of another two to three percent because the debt is particularly high.
Most recently, over 60 demonstrators who took to the streets because of Kenya’s politics disappearedImago / SOPA Images
Institutions such as the IMF can order creditors to share the costs – in the case of Kenya, it was decided that the government could raise enough money. But there is a risk of a debt spiral: in order to pay existing installments, the government will have to take out new loans.
Global South struggles with debt burden
The East African country is not alone in its high debts. According to the debt report of the Jubilee Initiative, 130 countries in the Global South have at least a slightly critical debt burden. In 45 countries, more than 15 percent of government revenues go towards foreign debt servicing, for example in Gambia and Senegal.
Erlaubjahr’s political advisor, Malina Stutz, explains that Kenya has paid more than 43 million US dollars in interest and fees to the IMF this year alone. This does not include the repayment installments for the loans.
Typically, loans from the International Monetary Fund are tied to the implementation of reforms designed to balance the state budget and improve the economic situation. However, these reforms are often controversial. In Kenya, the government has also cut subsidies, raised taxes and increased the prices of government services such as passports, at the urging of the IMF.
The protesters are demanding that the government not submit to such conditions if they harm the country. Criticism also comes from the independent UN expert on foreign debt, Attiya Waris. It seems to be more important for rich countries to get their money back than to ensure that people in poor countries can live a life of dignity, Waris told the Evangelical Press Service (epd).
Kenya: Corrupt system hinders economic growth
The Kenyan law professor believes debt relief is important. The fact that Germany had large parts of its debt forgiven after the Second World War laid the foundation for economic growth, she says. However, the protests in Kenya are also about the waste of taxpayers’ money. Kenyans are observing how politicians line their own pockets or spend it on luxury and ostentation, says Gerald Okoth, spokesperson for Transparency International Kenya. “That makes people angry.”
In May, for example, it emerged that officials from the Ministry of Agriculture and subordinate authorities had diverted donated fertilizer for private purposes and sold 20,000 bags of soil to poor farmers as subsidized fertilizer. Several governors are on trial for corruption. A new law is intended to allow MPs to use their companies to carry out contracts for the government.
According to Okoth, the protests are a message to politicians that power ultimately lies with the people. People are informing and educating themselves – and are no longer satisfied with the fact that the system is corrupt.
