Kenya: Protests over controversial fuel tax continue September 6 /update 2

Event

Kenya's government implemented an unpopular 16 percent tax on fuel products on Saturday, September 1, prompting protests and strikes between Monday, September 3 and Thursday, September 6. An indefinite strike launched on Monday by the Kenya Independent Petroleum Dealers Association saw workers stop transporting fuel supplies from depots to gas stations. As a result, a fuel crisis is currently ongoing in the capital Nairobi, as well as in other several cities throughout the country, with many petrol stations running out of fuel, and those that have some in stock are reportedly overwhelmed by queues. In addition, some matatu buses in Mombasa reportedly went on strike to protest the price increase, while bus drivers in Nairobi also threatened to go on strike if the situation is not quickly resolved. Additional demonstrations and strike actions are likely in the near-term.

Context

The tax increase comes as a result of the International Monetary Fund (IMF) advice to shore up Kenya's budget deficit. The increase is expected to raise USD 700 Million and cut the budget deficit from 7.2 percent to 5.7 percent of GDP.

The new Value Added Tax (VAT) was first approved in 2013, though it has been delayed by parliament several times. The government implemented the change despite an August vote by lawmakers to further postpone the VAT for another two years; opponents to the tax say that it will damage Kenya's economy. Several opposition lawmakers have threatened to impeach Kenya's Finance Minister over the issue.

The fuel tax is expected to have widespread knock-on effects, including raising the cost of public transportation, electricity, and basic commodities

Advice

Individuals in Kenya are advised to monitor developments, anticipate transportation disruptions (including possible fuel shortages), and avoid any potential protests. Furthermore, travelers to Kenya should check with their transport agents or tour operators prior to departure that there will be no disruptions in getting from the airport to their hotel.