Disappointments, high living cost cloud Ruto’s 1 year in office

Kenya’s President William Ruto flew to the US Wednesday to attend the 78th United Nations General Assembly session in New York, in the week he marked his administration’s first anniversary.

His delegation has also used the trip to court American companies to invest in the East African country, with trade and investment roadshows between Thursday and Friday in Chicago and San Fransisco, including a tour of Silicon Valley, the world’s technology and innovation center.

US ambassador to Kenya Meg Whitman, a familiar face in Silicon Valley from her days as chief executive of eBay and Hewlett Packard (HP), in a video posted on her X, formerly Twitter, handle, described the Chicago leg of the road shows as “a big success”.

“It has been great. We had hundreds of people; investors, American companies, Kenyan companies, all of whom got a chance to hear why they should do more business in Africa and more specifically why they should do business in Kenya… We had very good conversations on what we can do together,” Ms Whitman said.

But back home any positive vibes his spin doctors had hoped the US visit would arouse have faded away after the energy regulator on Thursday night announced record-high fuel prices in its latest monthly review.

The new fuel prices are expected to trigger increases in the cost of basic goods and services — from food to public transport — souring the public mood further, a day after the Treasury published its latest medium-term revenue strategy showing more taxes are on the way starting next year.

High cost of living and punitive taxes were among the grievances that fueled the disruptive opposition-led anti-government protests that intermittently shut down the economy in Nairobi and some major towns in the country between March and July.

Amnesty International Kenya said police killed at least 30 people during the protests.

The Energy and Petroleum Regulatory Authority attributed the massive increases in the prices of petrol and diesel mainly to rallying global crude prices, which saw the landed cost of diesel, for example, rise nearly 20 percent.

But for all his rhetorical skills, President Ruto could still struggle to explain the oil market dynamics to a distrusting public that is used to him making many promises that are never delivered.

He won the August 9, 2022 election after campaigning on a populist platform to reduce the cost of living within the first 100 days in office and frequently criticized the previous administration of Uhuru Kenyatta, in which he served as a renegade Deputy President, for raising fuel prices and burdening Kenyans with taxes.

His scorecard after the first year in office hasn’t looked any better though, with the latest survey by pollster Infotrak showing that a majority of Kenyans believe the country is going in the wrong direction on his watch.

A report by the Independent Medico-Legal Unit (IMLU), a non-profit organization that documents cases of police brutality, torture, violence, and discrimination, shows that Kenya’s human rights record has got worse in the past year.

The report released on Thursday shows that the country recorded 482 cases of torture and related violations between October 2022 and August 2023, more than double the 232 cases during a similar period previously.

Of the 482 cases, 351 were torture and inhuman or degrading treatment, 128 were extrajudicial executions and three were enforced disappearances.

On Friday, the Federation of Kenya Employers (FKE) said the disruption in policies and taxes means that employers are no longer able to plan their costs and inputs. The National Treasury through the Finance Act, of 2023 introduced a myriad of tax changes including doubling value-added tax (VAT) on fuel to 16 percent and introducing a 1.5 percent housing levy deducted from the gross pay of workers and matched by their employers.

“Tax increases brought about by the Finance Act, 2023 coupled with the already high electricity tariffs and tight monetary policy have slowed consumption which is the main driver of domestic demand in Kenya,” said FKE national president Habil Olaka.

FKE said Kenya had lost over Ksh50.69 billion ($345 million) in foreign direct investment (FDI) and other investment inflows in three months as economic growth plummeted over high taxation and an unpredictable business environment.

“Employers are appealing to the government to provide a stable and less costly business operating environment. The government needs to commit to a long-term development plan and give enough lead time for businesses to adjust their budgets before making far-reaching policy changes,” said Mr Olaka.

At the same time, Matatu Owners Association (MOA) announced public service vehicle (PSV) operators will increase fare prices by 20 percent immediately along all the routes following the increase in fuel prices.