By CST Research
In late June, Kenyan President William Ruto backtracked on a tax-hiking finance bill after protests left at least 20 people dead and more than 150 injured when police opened fire with live ammunition.
According to Patrick Gathara of The New Humanitarian, the youth-led protests were triggered by a range of proposed new taxes that will increase the financial burden on families already struggling with rising prices.
In response to the ongoing nationwide protests that led up to the aforementioned incident, Ruto said he would withdraw the bill as “members of the public insist on the need for us to make more concessions. The people have spoken.”
Fine words, but Amnesty International had previously reported that 21 social media activists had been abducted by state security agents as the government moved to curb the growing dissent.
Ruto has withdrawn the bill and sacked cabinet members to appease the demonstrators. Whether it will, remains to be seen.
Triggering a Multi-trillion Dollar Debt Crisis
In 2021, an Oxfam review of IMF COVID-19 loans showed that 33 African countries were encouraged to pursue austerity policies. This, despite the IMF’s own research showing austerity worsens poverty and inequality.
Days into the shutdown of the global economy in April 2020, the IMF and World Bank were facing a deluge of aid requests from countries in the Global South. Apparently, financial institutions had $1.2 trillion to lend.
Prior to that, in late March, World Bank Group President David Malpass said that poorer countries would be ‘helped’ to get back on their feet after the lockdowns.
However, such ‘help’ would be provided on condition of the acceptance of a booster shot of neoliberalism:
“For those countries that have excessive regulations, subsidies, licensing regimes, trade protection or litigiousness as obstacles, we will work with them to foster markets, choice and faster growth prospects during the recovery.”
Two years later, in an April 2022 press release, Oxfam International insisted that the IMF must abandon demands for neoliberal-driven austerity as hunger and poverty continued to increase worldwide.
According to Oxfam, 13 out of the 15 IMF loan programmes negotiated during the second year of the COVID event required new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk. The IMF was also encouraging six additional countries in Africa to adopt similar measures.
Demonstrators display placards during the Anti-Finance Bill protests in Nairobi on June 20, 2024. Wilfred Nyangaresi | Nation Media Group
Kenya and the IMF agreed a $2.3 billion loan programme in 2021, which included a three-year public sector pay freeze and increased taxes on cooking gas and food. More than three million Kenyans were facing acute hunger as the driest conditions in decades spread a devastating drought across the country. Oxfam said nearly half of all households in Kenya were having to borrow food or buy it on credit.
It was similar in Cameroon, Senegal and Surinam, for example, which were required to introduce or increase VAT, a tax that disproportionately impacts people living in poverty.
In Sudan, nearly half of the population live in poverty, but it was directed to scrap fuel subsidies, which would hit the poorest hardest.
Oxfam and Development Finance International also revealed that 43 out of 55 African Union member states face public expenditure cuts totalling $183 billion between 2022 and 2027.
Many governments are nearing debt default and being forced to slash public spending to pay creditors and import food and fuel. The world’s poorest countries were due to pay $43 billion in debt repayments in 2022, which could otherwise cover the costs of their food imports.
Oxfam has shown that low- and middle-income countries paid $106 billion in debt repayments and interest to G7 countries in 2023.
In a recent article, journalist Thin Lei Win shared a comment from Professor Raj Patel, member of the International Panel of Experts on Food Systems (IPES-Food). He is reported as saying:
“Debt servicing at these insane interest rates is making it even harder for countries to make sure the hungry are fed. In Kenya, a neoliberal government has met its citizens’ hunger not with food but with violence and tax increases. This is, alas, an augury of the world to come.”
According to the recently released report The State of Food Security and Nutrition in the World, one in 11 people went hungry in 2023 and more than one in four were cutting back on the quantity and quality of the food they consume.
One in five people faced hunger and more than a half were eating less or nothing at all for days at a time.
Thin Lei Win notes that soaring inflation and stagnant incomes have put healthy food out of reach for many people, while a reliance on global markets to feed the population has made them hostages to either spiking import bills or market volatility.
Solutions
Aside from releasing nations from their heavy debt burdens, the solution involves boosting the resilience of local food systems. With nearly 30% of the world food insecure and 42% unable to afford a healthy diet, it is essential to challenge and move away from a global food regime that relies on corporate-controlled supply chains, creates food insecurity (not least in Africa: see the online article Destroying African Agriculture) and uses debt and dependency to leverage compliance with the demands of powerful agribusiness conglomerates.
That much is made clear in the new report Food From Somewhere (IPES-Food) that argues for building food security and resilience through ‘territorial markets’. It notes that the past three years have seen big cracks emerge in global commodity markets and corporate-controlled supply chains resulting in supply chain chaos, lost harvests, volatile food prices and empty shelves.
The authors say:
“Feeding a hungry world requires resilient and robust food systems. In this comprehensive review, IPES-Food finds that a fundamental shift towards close-to-home food supply chains (‘territorial markets’) offers a more resilient, robust and equitable approach to food security.”
The report notes that a wide variety of vibrant food provisioning systems exist beyond corporate-controlled supply chains:
“From public markets and street vendors to cooperatives, urban agriculture to online direct sales, food hubs to community kitchens; territorial market channels are contributing to feeding as much as 70% of the world’s population every day. They are based around small-scale producers, processors and vendors, rooted in territories and communities, and play multiple roles within them. Yet they are continuously overlooked.”
Territorial markets are the backbone of food systems in many countries and regions, and the report highlights how they build resilience on multiple fronts, including ensuring access to seasonal, diverse, more nutritious foods and diets, demonstrating high degrees of resilience and adaptability to shocks, providing decent prices and steady incomes for small-scale producers and enhancing environmental sustainability by promoting low-input, biodiverse farming.
They also sustain traditional food cultures and foster community connections, solidarity and social capital.
However, governments are propping up fragile, disaster-prone global supply chains through agricultural subsidies, trade and investment agreements, tax breaks and food supply infrastructure skewed towards large-scale, industrial export agriculture.
The report adds:
“At the same time, corporate power continues to grow, eroding traditional practices and food cultures, co-opting local and territorial chains and reshaping diets around staple commodities and ultra-processed foods.”
It concludes that public procurement and state purchasing should be redirected to schemes that support sustainable small-scale producers and subsidies should be shifted to invest in the infrastructure, networks and people that underpin territorial markets, including public marketplaces, collectives and cooperatives.
Moreover, local markets need to be protected from corporate co-optation. This involves breaking up supply chain monopolies and encouraging sustainable, biodiverse farming practices and diverse healthy diets.
By moving towards food sovereignty in this way, we can not only avert future food crises and the ramping up of a debt-trap strategy but also challenge a food regime that has its roots in a persistent colonialism and imperialism facilitated by the imposition of neoliberal trade policies and World Bank/IMF directives at the behest of global agribusiness interests.
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