Gen Zs sincere but sincerely wrong on many fronts

The Gen Z-led protests that erupted in Kenya in June 2024, sparked by opposition to the Finance Bill, were driven more by emotion than by a full understanding of the country’s economic realities. While the protests were framed as a stand against punitive tax measures and an effort to shield parents from financial pressure, they overlooked the complex fiscal context Kenya is navigating.

To many in Gen Z, tax revenue seems directly tied to the President, whom they accuse of using funds for unnecessary government luxuries. This sentiment has even led to the President being pejoratively called “Zakayo,” after a Biblical tax collector. However, this view is a misreading of how public finance works. Taxes are a civic duty meant to support public services and development – not merely fund the executive branch.

The Finance Bill 2024, which the Gen Z opposed, was part of a broader plan for economic stabilisation. Kenya’s financial woes stem in large part from debts incurred by the previous Jubilee government – many of which produced little in return. Examples include the costly Standard Gauge Railway (SGR) loan from China and a 2014 Eurobond that severely affected the Kenyan shilling. In June alone, SGR repayments consumed over 80 per cent of the country’s external debt servicing costs.

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When the Eurobond matured in 2024, there were no funds set aside by the previous Jubilee government for repayment. This caused panic in financial markets leading to a sharp depreciation of the shilling. A last-minute loan from Bretton Woods institutions helped Kenya avoid default, but with conditions attached. Chief among them was fiscal consolidation – reducing budget deficits and slowing down debt growth, primarily by increasing tax revenue.

Budget deficit

The Finance Bill was central to that strategy. It aimed to raise Sh344.3 billion in new tax revenues and cut the budget deficit from 5.7 per cent to 3.3 per cent of GDP. However, amid widespread protests – which tragically led to loss of life – the Bill was withdrawn. Many viewed this as a major victory for Gen Z.

But the celebration may be premature. Without the additional tax income, the government had to borrow even more from both domestic and foreign lenders. This undermines the long-term goal of reducing debt and puts added pressure on future taxpayers – many of whom will be Gen Z themselves. 

This is the irony: In fighting higher taxes today, Gen Z may have deepened their own economic vulnerability tomorrow. Their protests, while driven by good intentions, lack an appreciation of Kenya’s broader fiscal challenges.

Ultimately, Gen Z’s energy and activism are commendable. No doubt, they are sincere but sincerely wrong on many fronts. Their movement needs a more informed foundation – one driven less by visceral assumptions than by cogent arguments. Engaging economists, policy experts and government officials could help them better understand the intricacies of national budgeting and debt management.

Without such engagement, their efforts risk being hijacked by opportunists or resulting in short-term gains that cause long-term pain. Sincerity in activism is essential. But so is strategic understanding.  Only then can meaningful, lasting solutions emerge.

Mr Khafafa is a public policy analyst

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