Thursday, July 20, 2023

Kenya protests soaring cost of living


Kenyans are experiencing the effects of both capitalism and the futility of trusting in ‘leaders’. The soaring cost of living has led to protests with extreme violence resulting, according to the United Nations human Rights Office, in protesters deaths and injuries. To protect its power, and those of the asset owning class, the State will always initially resort to those members of the working class who have undertaken to defend bourgeoisie interests even to the extent of beating and shooting fellow workers.

‘Kenyan opposition leader Raila Odinga has called for three days of anti-government protests starting on Wednesday.

The latest demonstrations are against tax hikes and follow two previous sets of protests this year against the soaring cost of living in East Africa’s economic hub and alleged malpractice in last year’s presidential election, which Odinga lost.

The new taxes were to take effect on July 1, but a Nairobi court halted their implementation pending further legal proceedings. Still, a tax increase on petroleum products was imposed, increasing fuel costs.

Odinga said more protests could be held after this week.

What are the latest protests about?

Odinga announced the protests on June 14 against a new finance bill, which introduced a 1.5 percent housing levy, a 16 percent tax on petroleum products and a 16 percent value-added tax (VAT) on money that policyholders receive as compensation from insurance companies.

“That finance bill will be the last nail in the coffin,” Odinga told his supporters. “If it is passed, it will make Kenyans slaves of paying taxes. …When they pass that bill, that will be the trumpet call. Will you be ready?”

The bill was signed into law on June 26.

On July 10, Kenya’s High Court extended an order barring Treasury Cabinet Secretary Njuguna Ndung’u from implementing it.

The government mostly obeyed the ruling except for the Energy and Petroleum Regulatory Authority, which increased fuel prices, triggering an increase in public transport costs.

The price increases are from 182.04 shillings ($1.29) to 195.53 shillings ($1.38) per litre of petrol, 164.28 shillings ($1.16) to 176.67 shillings ($1.25) for a litre of diesel and from 161.48 shillings ($1.14) to 173.44 shillings ($1.22) per litre of kerosene.

What is the finance act about? 

During the presidential campaign,the eventual winner, William Ruto, promised to reduce the cost of living and positioned himself as a poor “hustler” eager to wrest power away from the ruling dynasties that President Uhuru Kenyatta and Odinga, sons of independent Kenya’s first president and vice president, represented. The younger Kenyatta endorsed the younger Odinga rather than his deputy, but Ruto was declared the winner and was sworn into office in September. President Ruto inherited an enormous government debt. At the time Kenyatta took office in 2013, it stood at 1.79 trillion shillings ($13bn). By the time Kenyatta left office, it had ballooned to 8.7 trillion shillings ($61bn).

Ruto then removed fuel subsidies, leading to a spike in the prices of basic commodities like bread and maize flour, which are directly affected by the cost of energy and transport.In addition to being very costly, consumption subsidy interventions are prone to abuse, they distort markets and create uncertainty, including artificial shortages of the very products being subsidised,” he said in his inauguration speech.

New taxes followed. In addition to the housing levy, petroleum products tax and insurance compensation tax, digital assets taxes were also introduced. The government also imposed a 3 percent levy on transfer charges applied during the exchange of assets that cover non-fungible tokens (NFTs), cryptocurrencies, and digital currencies.

The finance act also introduced a 15 percent withholding tax for digital content creators, a 35 percent tax for people earning above 500,000 shillings ($3,536) annually and the VAT on petroleum products was increased from 8 percent to 16 percent.

According to economists, the law will increase tax revenues collected from high-income earners while shrinking individual net income for low-income earners because of increased tax burdens.

What have the effects of the protests been?

According to a statement by a spokesman for the United Nations Human Rights Office, up to 23 people were killed by the police and dozens were injured in demonstrations in the past week. A couple of opposition members were also arrested.

“The UN is very concerned by the widespread violence and allegations of disproportionate use of force, including the use of firearms by the police during protests in Kenya,” Jeremy Laurence said. “We call for prompt, thorough, independent and transparent investigations into the deaths and injuries.

What happens next? 

Thousands of opposition supporters have protested in Nairobi and a number of other cities on back-to-back Mondays and Thursdays despite a strong pushback from law enforcement, so massive numbers are expected for the protests this week’.


Namibia & poverty


Namibia is a a country in Southern Africa. Its population is over two million eight hundred thousand. Twenty six per cent of its population live in extreme poverty.

 The most deprivation occurs in the the rural areas.

A report in the Namibian would appear to indicate that almost half of Namibia’s population are living in poverty or extreme poverty.

Almost half of the country’s population are faced with poverty, says prime minister Saara Kuugongelwa-Amadhila. She was speaking at the launch of the delayed sixth National Development Plan (NDP6) by the National Planning Commission (NPC).

Kuugongelwa-Amadhila said the government had reduced poverty from 38% to about 18%, however, matters have since worsened.

If you look at the new formula to calculate poverty, close to 50% of the population is living under poverty,” she said. Since 2016, the country experienced a macro-economic deterioration which exposed Namibia’s vulnerability to external shocks, Kuugongelwa-Amadhila said.

These had a negative impact on our poverty and inequality. In fact, the gains we made in reducing poverty were almost completely wiped out,” she said.

A month ago, The Namibian reported that the United Nations Population Fund (UNFPA) said 43% of the country’s population are experiencing multidimensional poverty.

According to the UNFPA 2022 annual report, the Gini coefficient index shows that income inequality in Namibia stands at 57,2%.

The Gini index is a summary measure of income inequality, which incorporates the detailed shared data into a single statistic, summarising the dispersion of income across the entire income distribution.

The report indicates that the unemployment rate stands at 33,4%, with youths aged 15-34 taking up 46,1%, while women take up 48,5%.

The report further indicates that 46% of households are female-headed, while 41% are male-headed.

At that time, economic analyst Arney Tjaronda told The Namibian these figures are not surprising, as the cost of living has drastically increased while salaries remain low.

He said most concerning is the high unemployment rate in the country, and a job market that is unable to absorb the high number of graduates’.

An unemployment rate of over a third with young people and women being affected the most means that many Nambians are struggling under capitalism.

The World Bank notes: ‘Economic advantage remains in the hands of a relatively small segment of the population, and significant inequality continues. This lack of inclusiveness and society’s vast disparities have led to a dual economy—a highly developed modern sector, co-existing with an informal subsistence-oriented one’.

‘Namibia ranks as one of the world’s most unequal countries. Its Gini coefficient of 59.1 in 2015 was second only to South Africa. Geographical disparities in both economic opportunities and access to services are large and widening. High levels of inequality result in starkly different poverty rates across different groups, including by age and gender’.

‘Due to consistently negative per capita GDP growth since 2016, and the negative impact of COVID-19 on livelihoods, poverty rates are projected to have increased. Typically, female-headed households, less educated, larger families, children and the elderly, and labourers in subsistence farming, are particularly prone to poverty.

Capitalism is global. Capitalism is the cause of such misery. Capitalism is not the solution. Socialism is.

Sunday, July 16, 2023

Nigeria: Food shortage/state of energency


Nigerians experienced an almost twenty five per cent increase in their food bills in May.

Following on here from a post on poverty in Nigeria, 5 July, it is now reported that:

‘A state of emergency has been declared in Nigeria as a result of food shortages and surging prices, with the country’s government announcing a range of measures to address the crisis.

On Thursday, it was announced that fertilizers and grains will “immediately” be released to farmers, and 500,000 hectares of farmland and river basins will be activated for year-round farming.

The move will also expand the central bank’s role in financing the agricultural value chain.

We declared a state of emergency and unveiled a comprehensive intervention plan on food security, affordability, and sustainability, taking decisive action to tackle food inflation,” President Bola Tinubu said on Twitter.

Tinubu emphasized that the goal of the intervention was to promote agriculture and increase job creation, pledging that “no one will be left behind” in his government’s efforts to ensure “affordable, plentiful food.

Attahiru Bafarawa, a former governor of Nigeria’s Sokoto State, had warned earlier this month about banditry in the country’s north, saying it threatens food security and was a “serious disaster.

Africa’s largest economy has seen a surge in the cost of food and transportation due to the president’s removal of fuel subsidies and sweeping exchange-rate reform since May.

In a statement on Thursday, government spokesperson Dele Alake said “savings from the fuel subsidy removal” would be directed at revamping the agricultural sector.

A National Commodity Board will be established and charged with reviewing food prices and maintaining a “strategic food reserve that will be used as a price stabilization mechanism for critical grains and other food items,” Alake said.

The cost of food in Nigeria had increased by 24.82% in May compared to the same time last year, according to the National Bureau of Statistics (NBS). It explained that the year-on-year increase in food inflation was caused, among other things, by price hikes in oil, yam, bread, cereals, and fish.’

We will keep on saying it; the solution is socialism.

Wednesday, July 05, 2023

Poverty in Nigeria


The World Poverty Clock is a tool used to track poverty progress worldwide.

‘Nigeria has the awful distinction of being the world capital of poverty, with 71 million people living in extreme poverty today (World Poverty Clock, 2023) and a total of 133 million people classed as multidimensionally poor according to National Bureau of Statistics data.

About 828 million people will wake up every day having no idea when or where their next meal will come from, and many will go to bed that day without eating anything. This is according to a 2021 UN report. The UN further states that of these 828 million people, 25,000 will die today, including more than 10,000 children.

The T200 Foundation’s report shows that Nigeria has a serious hunger problem with a Global Hunger Index score of 27.9, but there are significant variations in the score across states.

Executive Director of T200 Foundation, Amb. Emmanuel Osadebay stressed the need for collaboration among stakeholders to end hunger in Nigeria by 2030 in line with the Sustainable Development Goals.'