This op-ed originally appeared in RealClearPolitics.
The youth-led protests engulfing Kenya and Nigeria are signs of a more severe set of problems that have weighed Africa down for decades.
Across the continent, the cost of running government agencies is at an all-time high; austerity measures that only favor politicians are forced down the throats of impoverished masses; taxes are increasing; and regressive economic policies are frustrating local entrepreneurs out of business. Young Africans are tired of living under these conditions. African politicians must understand that the only path forward is the repealing of economic policies that raise the cost of living for the masses, the downsizing of government, and the abolition of tax regimes that stifle businesses.
The unrest in Kenya, which is tied to the #RejectFinanceBill2024 protest, is an example of how economic reforms pushed by foreign institutions like the International Monetary Fund could cause financial turmoil and political instability in African countries. Kenyans were already in the streets to protest a tax hike bill as far back as mid-2023. However, the government’s attempt to implement an IMF-invented tax reform in June 2024 reinvigorated the anti-tax sentiment, turning it into a nationwide anti-government movement.
The IMF had suggested that Kenya could potentially record an increase in its tax-to-GDP ratio, from 13.5% to at least 20% between 2024 and 2027, should tax policies be expanded. The public outrage that followed the move to expand taxes based on the IMF guidance has since caused the death of over 50 people.
Nothing could be more unwise than for the IMF and the Kenyan government to assume that the best solution to solving the country’s economic problem is the adoption of an abhorrent tax regime that would, for example, impose a 25% excise duty on vegetables and a 16% value-added tax on erstwhile tax-exempt items like bread and mobile phones. It should be expected that in a country where roughly 35% of the total population (19 million out of 54 million) lives below the international poverty line ($2.15 per day) amid a national GDP growth rate that barely averaged 5% in the last 13 years, the mere suggestion of a tax hike would almost certainly spark a national outcry.
In these days of smartphones and hashtags, tensions and ideas spread like wildfire. Barely two months after Kenyans flocked to the streets, Nigerians caught the fever. But Nigeria’s case is even more economically dire than Kenya’s. The West African country is going through its most challenging economic patch in a generation. It was forced onto a high inflation slope, starting at 16% in March 2022, which has continued to rise and recently peaked at 34% in June 2024. The last time the country had such a high inflation rate was in February 1996 (44%).
In addition to surging inflation, the country’s currency, the naira, is experiencing an unprecedented devaluation rate, losing almost five times its value against the dollar since 2019. The weakening of the naira has made foreign exchange extremely difficult for Nigerian entrepreneurs. Regrettably, small and medium enterprises and impoverished Nigerians are paying the heaviest price for the austerity measures introduced by the government to help the economy.
Politicians across all levels of government continue to live lavishly. The country borrows staggering amounts of money in foreign aid from the International Monetary Fund, the World Bank, and other lenders to fund needlessly oversized government ministries and legislative officials. As Nigeria’s external debt ceiling rises, state officials corruptly mismanage the borrowed loans.
