Mr Nicholas Sengoba
Kenya’s young people, a.k.a Gen Z, demonstrating on the streets of different towns and cities, against high cost of living, increased taxation and bad governance; are still getting the lion’s share of media coverage.
They have literally shut Kenya down and forced the hand of the about two-year-old President William Ruto’s government to recall the Finance Bill 2024.
As if that is not enough, several austerity measures to placate the youth have come into force with ‘immediate effect’. Funding to the offices of the First and Second Ladies has been stopped. Forty-seven loss-making state corporations were dissolved. Expenditure in the President’s office has also been cut.
Buying of new vehicles is suspended for 12 months except for security agencies. The proposed hiring of Chief Administrative Secretaries who would have swallowed public funds for their maintenance, has been suspended.
The number of advisors in the government has been reduced by 50 percent. Police brutality is being investigated. Soon there will be increased efforts to fight corruption to reduce the leakage of taxpayers’ money. Good moves but Gen Zs are still on the streets, chanting ‘Ruto must go!’
The trouble is that Kenya’s most urgent problem, especially for the majority youthful population, is the high unemployment rate. About 84 percent of the unemployed population in Kenya is youthful. Many of them live in slums like Mukuru kwa Njenga, Kawangware, Mathare, and Kibera in Nairobi. Obunga and Nyalenda in Kisumu, and Maweni, Mashimoni and Bangladesh in Mombasa. Life there is tough as nails; with lack of basic social services like shelter, water, medicare, and electricity. There is rampant crime, disease, hunger and hopelessness. Some reports claim that some people living with HIV skip taking their drugs due to hunger.
Kenya is deep in debt owing about US$80 billon which is about 70 percent of its GDP. The trouble is that most of this money, which has not been stolen, has been invested in very beautiful infrastructure like roads, the Standard Gauge Railway, Airports etc. These do not create massive employment both in the short and long run. Yet Kenya is paying about 60 percent of its tax revenue of about US$7.2 billon to service these debts.
That means that there is little left to create jobs and provide incomes from which taxes may be collected. Same applies to social services like health, housing, transport, security, and education.
The worrying part is that of all the measures, including those which take immediate effect, none seems to directly and urgently push for employment. The youth marching on the streets have limited legroom. They have no job to lose by staying on the streets.
The Kenyan governments over the years have fallen right in the middle of the dilemma created by neo-liberal economic policies, where everything is left to the market forces.
Before the state left the market, many of the loss-making parastatals, that were eventually sold off in mass privatisation policies, provided employment. The profit motive was secondary. There were also other advantages like free or subsidized housing, healthcare and education. These parastatals were vital in the forward and backward linkages to the wider local economy, especially those that used agricultural produce as raw materials. This helped keep many people in rural areas employed on the land.
The cost of all this was that the government lost money in subsidies and inefficiency in the chain of production to keep these parastatals and other entities operational. But the dividend was that many people had work to keep them busy and grant them an income, however low. This was the consolation of free or subsidised social services like health, education and in some cases public transport.
The quest for a more efficient government that focused on cutting down public expenditure in the late 80s and early 90s came with its own baggage that is now troubling most countries like Kenya. The market is in the hands of especially foreign investors.
These do not fall for the sentiments of keeping the people in jobs, where there is no gain. They are there for profit before everything else. So, their wage policies and staffing are designed with this in mind.
The one who is employed does not earn enough to keep his skin and that of their family together. Yet they have to pay for their housing, healthcare and education for the children. In most cases they are just a tragedy; accident, sickness or fire away from abject poverty.
When there is economic pressure like the world witnessed with the two-year Covid-19 pandemic, about four years ago, labour is the first point of adjustment. Consequently, many have found themselves redundant. Yet the ones in public service have stayed put.
African countries like Kenya now find themselves in a conundrum. In the past, though they played a significant direct role in the social economic sphere of society by providing employment, they lost money to loss-making and inefficiency when they did business.
Without the loss-making public companies, they are now losing money to debt servicing. This is putting a huge strain on their resources and forcing them to cut down on social services while burdening a society whose majority is out of work with more taxes.
For the shortfall they have to resort to borrowing more and consequently paying out more in interest and debt servicing. Much as the pressure of Gen Z has yielded some significant changes in the way government is run, these are not going far enough to address the major issue of redundancy.
An idle mind, they say, is the devil’s workshop. Similarly, a drowning man will clutch at the tail of a serpent, and to a hungry man, bitter things taste sweet. Kenya is at that stage where in the short run anywhere and anything will do.
The young people on the streets may succeed in pushing the Ruto administration aside. Reason is that the reforms being taken at the moment do not provide the ultimate solution which is gainful employment. But the ones who come after, will find similar challenges.
They may panic and deepen the crisis by borrowing even more to pacify Gen Z thus increasing the pressure of debt repayment and its consequences that minimise expenditure on social services and job creation.
The Gen Z story is going to make the headlines for a long time to come.
Twitter: @nsengoba
