UDA Presidential Candidate William Ruto addressing his supporters at Nyayo Stadium in Nairobi on August 6, 2022 during a Campaign rally.
President William Ruto and his Kenya Kwanza lieutenants are walking a tightrope amid a restive 'hustler' base that is smarting from the rising cost of living and out-of-control taxation in the country.
With the President's political base feeling betrayed by the current state of affairs, Dr Ruto has been labelled "insensitive" and quickly earned the nickname Zakayo – Kiswahili for Zacchaeus and a reference to the biblical tax collector – for introducing new taxes and hiking old ones.
Since July, the Kenya Kwanza administration has implemented new tax policies, including an increase in the levy of monthly salaries from a maximum of 30 percent to 35 percent; a new 1.5 percent housing tax, with an equivalent amount paid by the employer; a 2.75 percent hospital insurance fund levy, and a three percent turnover (gross sales) tax on small businesses.
There will also be a doubling of fuel taxes to 16 per cent and an increase in corporate tax from 25 percent to 30 percent.
The Federation of Kenya Employees (FKE) said last month that a preliminary survey showed that 70,000 Kenyans had lost their jobs in the past year and more were at risk of being laid off as employers considered further job cuts.
The lobby blamed the implementation of the controversial Finance Act, 2023 as the genesis of the current woes, saying if the current state of affairs continues, 40 percent of employers will be left with no option but to send their workers home.
FKE Executive Director Jacqueline Mugo said employers would soon be forced to stop hiring and reduce the number of employees on permanent and long-term contracts as they struggle to tame the wage bill due to various taxes imposed by the Kenya Kwanza administration, that have put more burden on employers.
Inflation
“Preliminary results from the survey show that between October 2022 and November 2023, we have lost three percent (70,000) of the jobs in the formal private sector and 40 percent of employers have reported that they are planning to reduce the number of workers to meet the increasing costs of operating in Kenya,” she said.
Professor XN Iraki, an economics lecturer at the University of Nairobi, said the hustlers are not happy because politicians over-promised in the run-up to the 2022 elections. But a year later, few of the promises have been fulfilled.
He pointed out that inflation has gone up, as has the cost of commodities; there are more taxes; and everyone is saying they have no money in their pockets.
“The political leaders had promised things will change but nothing has. Under these circumstances, there is no way a hustler can be happy,” said Prof Iraki.
To make matters worse, he explained, politicians keep promising things will get better, but hustlers live one day at a time, so they do not worry about tomorrow, they worry about today.
“You want to eat today, pay rent, get school fees and are not interested in tomorrow. There might be all those external factors that political leaders are giving, but many hustlers don’t care about what happens in the rest of the world but in their household, neighbourhood, small businesses where they earn a living,” he said.
Manifesto
Dr Ruto’s electoral success was largely due to his portrayal of himself as a "hustler", fighting the dynasties – that is, Azimio leader Raila Odinga and former President Uhuru Kenyatta.
President Ruto and his brigade used the rising cost of living as a campaign tool to mobilise Kenyans against Odinga, who was backed by Kenyatta.
He called out his former boss-turned-political-nemesis, denounced his policies on the cost of living and his punitive tax regime, and promised the hustlers a better economy under his watch.
However, the issue is now proving to be a hot potato for the current regime as Kenyans question the government's policies and strategies.
President Ruto has found it difficult to make quick gains as the ordinary mwananchi or 'hustler' (a voting base that Kenya Kwanza rallied to propel them to victory) feel short-changed.
Kenyans continue to struggle with soaring fuel prices, rising unemployment and a tax burden that has put even basic goods out of reach for many, despite the president's promise to correct "past mistakes".
The development has left several senior government officials facing the wrath of hostile Kenyans as they try to defend the government’s policies.
Ms Peninah Malonza, the Cabinet Secretary (CS) for East African Community (EAC), Arid and Semi-arid Lands (Asals) and Regional Development, was the latest Kenya Kwanza minister to be caught in the middle of an agitated crowd while trying to defend the government.
CS Malonza was booed by mourners in Kitui County as she tried to explain what the State was doing to reduce the high cost of living.
She pleaded with the crowd to let her finish her speech, but her pleas fell on deaf ears as they became uncontrollable, forcing the minister to speed up her speech.
A month earlier, Energy and Petroleum CS Davis Chirchir also faced a hostile crowd during a church service in Sotik, Bomet County, before the President over the high cost of fuel, forcing him to cut short his speech.
At the time, a litre of petrol in Nairobi was selling for Sh217.36, diesel for Sh205.47 and kerosene for Sh204.46.
CS Chirchir has been under pressure to explain the high cost of electricity and fuel in the country, and in September he said there was little the government could do to bring prices down and warned Kenyans to prepare for harder times.
A senior government official told the Nation how they have been made to tread carefully on the issue of the cost of living when attending or presiding over functions, lest they fall out with the crowd.
“When we go to events, we try to restrict ourselves to the function to avoid backlash from the crowd,” said the official, who spoke on condition of anonymity for fear of victimisation.
Popularity
Recently, during a meeting at State House, the President recently told his MPs, who said they were facing challenges defending the government over the high cost of living in their backyards, that they should know when to be popular and this was not the time.
Last week, Government Spokesperson Isaac Mwaura defended the President after a news article described him as a "tax collector” president. Mwaura said the article was an “untrue story on the state of our country's economy”.
“President Ruto remains the most popular leader in Kenya, with Kenya Kwanza as the most preferred political formation by Kenyans, according to recent independent research,” he said.
However, the survey Mwaura was referring to – Tifa Research – showed that supporters of President Ruto’s administration are more disappointed with the government's performance, painting a grim picture of the state of affairs.
The poll, which rated President Ruto’s government on 16 key policy areas, found that the Kenya Kwanza supporters believe that the current regime has performed poorly in tackling the cost of living, creating jobs and fighting corruption.
Runaway cost of living
Overall, the majority of Kenyans, 84 percent, believe that the current economic conditions are worse than a year ago, with the runaway cost of living cited as a nightmare for the State.
As a result, 87 percent of Kenyans are cutting back on personal spending, with transport, clothing and entertainment taking the hit as they try to survive the crisis.
The report shows that nine out of 10 Kenyans have reduced personal spending, with transport taking a 15 percent hit, clothing, nine percent and entertainment, eight percent.
Tifa lead researcher Tom Wolf noted that the majority of Kenyans have experienced significant economic hardship recently, with large majorities across the political divide describing their economic situation as worse than a year ago.
He said that a key indicator of such economic hardship is the large majority who say they have had to reduce their personal expenditure, with a large majority of respondents saying they have had to cut back on food.
“Whether such reduced food consumption is having any effect on people’s health is unclear. In a similar fashion, the most commonly cited challenge facing the government is inflation/the cost of living,” he said.
However, in an interview on Sunday last week, President Ruto said the factors exacerbating the high cost of living are beyond his control and Kenyans will have to wait longer for things to improve.
He said his administration has adopted a comprehensive strategy to reduce the cost of living, including supporting farmers to increase food production, a move he noted is reducing the cost of food.
He added that his government is also expanding opportunities for the people to ensure they have a decent income to support themselves.
“There is no miracle that is going to happen. We live in a global economy. The price of fuel is not controlled by the Kenyan government. It is controlled by the producers,” Dr Ruto said.
“Last year, at a time like this, things were different. The price of unga was Sh240, today, it is Sh140.”
His deputy, Rigathi Gachagua, dismissed the poll, urging Kenyans to be patient and have faith in President Ruto’s ability to improve the economy.
But Mr Odinga has continued to accuse the government of failing to deliver on its promise to reduce the cost of living, which Kenya Kwanza blamed on the previous administration.
The Opposition leader blamed the situation on poor policies by the current regime that have led to the rising cost of basic commodities.
The ODM leader warned that if the current regime continued to turn a deaf ear to the plight of Kenyans, it would face what he described as the same axe that has fallen on other oppressive regimes across the continent.
“There are strong indications that things will get worse or remain the same. We, however, refuse to ask you to tighten your belts, you have done enough. The ball is squarely in the court of the regime. They either act or await the fate that has befallen other insensitive and incompetent regimes across the continent,” he said.
National Treasury CS Njuguna Ndung’u admitted to legislators that the country is broke, while Prime CS Musalia Mudavadi urged Kenyans to give them more time.
Policy and governance expert Vincent Kimosop said the cost of living was an issue but the matter should be seen in context.
He said inflation was coming down and the economy was projected to grow, but there were external factors, such as fuel prices, that had negatively affected the quick gains.
“You have to contextualise the cries of the hustlers and appreciate where it is coming from. The contextualisation of all this is the appreciation of local, global and structural changes within the economy,” he said.
