On 15th July, 2016, prices of fuel increased as the Kshs6 road maintenance levy took effect. The price of petrol rose to Kshs92.93, diesel to Kshs83.24 and kerosene Kshs61.45 in Nairobi. The price is obviously going to be much higher in far flung areas like Mandera, Kisumu, Kitale, Lokichogio and Moyale.
The Kshs7.20 excise duty that was introduced on kerosene in the anti-poor 2016/2017 budget had an immediate impact on the economy making inflation rise to 5.8% in June from 5% in May.
The 2016/2017 budgetary estimates are proving to be one of the most insensitive on the poor Kenyan. It’s common knowledge that most households in Kenya use kerosene for cooking. Cooking gas is a preserve of the middle class.
The slightest increase in fuel prices has spiraling effects on all sectors of the economy from agriculture to manufacturing to service industry. We are almost 100% dependent on road as a means of transport for our all our goods whether they are imports or exports. This implies that fuel increase will make us pay more for less goods and services.
The rationale behind this increase does not make sense to anyone who understands the politico-economic dynamics in Kenya. It’s common knowledge that absorption of development budget is slow as a result of bureaucratic incompetence and corruption in government departments.
The taxman has been grappling with deficits arising from tax fraud, evasion and mega corruption at Times Tower. It was therefore unrealistic to increase tax target by 300 billion; from 1.2 trillion to 1.5 billion when last year’s targets were not met.
The cost of doing business in Kenya will definitely go up; our goods will not be able to compete in the international markets. Businesses will close, the resilient ones will downsize. In the process middle level and low level jobs will be lost. Desperation and desolation will set given that only tenderpreneurs will be making money.
Established democracies in the world have demonstrated, blockaded roads, staged sits and boycotted work for this kind of impoverishing economic policies. The closest Kenya came to this was during the grand coalition government when the price of maize flour shot to Kshs140. The interventionist measures initiated then did not work out as they were mired in scandal although the price of unga eventually came down.
The impeachment of Brazilian President Dilma Rouseff was as a result of mega corruption in government owned oil firm Petrobas. The disquiet had started sometimes back before the 2014 World Cup when the proletariat felt the government was spending borrowed money carelessly in preparation for the event.
In 2016 Brazil was marked by demonstrations by hundreds of thousands of Brazilians discontented with the way their government was handling the economy. This was despite the leftist Workers’ Party being credited with lifting millions out of poverty.
In Kenya we have demonstrated for worthless causes like the IEBC which was just a smokescreen meant to advance political agenda of a cabal of politicians trying to resuscitate their fledgling political careers currently in high dependency unit. The civil society should rally us around this cause.
We cannot afford to be complacent when a narcissist, non-frugal tribal aristocracy overburdens us with taxes a good percentage of which will be used to build 2017 political war chest. Anti-poor tax policies like the increased road maintenance levy are blood-sucking and sweat-milking ventures which will drive us into chasms of desperation at supersonic speed.
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