Kenya remains in the global headlines following two weeks of widespread anti-tax and anti-government protests following the proposal of an IMF-led Financial Bill 2024. Though the bill has been withdrawn, the legislation imposed high taxes on essential goods, sparking public outrage. Amid this, there are positive steps in South Africa while top officials of the Nigeria SEC have picked out reasons why crypto is unstoppable in the country.
Here’s the state of affairs in Africa:
How Kenya’s Finance Bill 2024 Rejection Shows Why Crypto Is Necessary
Over the past two weeks, Kenya has been in global headlines over anti-government protests. The uprising was against an attempt by the government to pass the controversial Financial Bill of 2024.
This bill proposed drastic tax hikes on everyday commodities, including fuel, sanitary pads, motor vehicles, and more. The protests grew and reached a climax on June 25, 2024, forcing the country’s president William Ruto to withdraw the bill.
However, citizen discontent with governance in the country goes beyond the Finance Bill. The protest movement had a unique organization and has now diverted its ire onto various institutions that have contributed to the economic hole the country is in right now. There are parallels between what is happening in the country and the broader financial sector internationally.
Failure of Centralized Financial Systems
President Ruto attempted to justify the legislation using the need to raise more revenue for the government to service its debts. Ironically, the debts the country has accumulated over the past ten years have enriched politicians greatly at the expense of the ordinary citizens expected to pay back. It is reminiscent of the 2008 financial crisis where banks gambled with the financial system and taxpayers bailed them out.
The International Monetary Fund (IMF) is a crucial player in the debate as well. It has been a generous funder to Kenya and has been pushing for some of the most contentious proposals. Centralized Finance at the international level has impoverished developing nations with corrupt leaders who take bad loans that their citizens will have to service.
The vicious cycle of debt repayments with delinquency lurking has destroyed societies like Greece and Argentina. Kenya is also approaching the edge due to decades of bad policy that continually indebt the nation to international lenders. Unfortunately, citizens will try different governments through delinquency but it can be tough to crawl out of a hole. Argentina is a perfect example as it has elected leaders from the far left and far right in the past decade but has little to show for it.
These events show that centralized finance has run its course. Poor citizens of the world pay the price for the irresponsible actions of a few. There is a power imbalance both at the policy and resource allocation level that affects the powerless disproportionately.
With the unprecedented action by citizens, the government has been forced to listen and change course. This movement could be the trigger point for Kenya to finally have effective leadership and not ones who pass legislation with complete disregard for citizens.
Decentralized Organization of People-Led Movements
Kenya’s government has historically been aggressive with protestors. The country’s presidential elections have always elicited protests that meet force from the police. A common strategy is to isolate the protest leaders and either intimidate or bribe them into submission.
This round of protests was a largely organic affair. Young people would communicate on social media like TikTok or X and organize effectively without centralized planning. Twitter spaces became a defining trend of these protests as ordinary people would join these forums and share their frustrations with how the country was moving. Creatives also played their part by creating unique posters that designed catchy slogans.
The reason these protests were so successful is because of their decentralized nature. It was a largely organic movement with no identifiable leader. Therefore, the government could not quickly disperse the movement like they had done for several others before.
For crypto enthusiasts, this message sounds familiar. Bitcoin emerged as a decentralized movement fresh off the disillusionment of the 2008 financial crisis. When a political or financial movement is decentralized and relies on consensus to function, it is difficult to defeat.
The decentralized governance structure of most crypto platforms ensures that all users participate in decision-making. This new generation does not want the top-down approach where a leader dictates everything to the subjects. Decentralized decision-making is the right approach for more equitable governance structures for all citizens.
Global Lessons
Crypto is more than just a form of internet money. There is a very political element in decentralizing finance. Politicians and banks normally make the spending decisions but leave taxpayers to bear the burden of debts or bailouts.
In most countries, citizens bear the brunt of corruption, inflation, and other financial burdens. Such trends are evident in the fact that millennials are set to become the most indebted generation with little to hand over to their juniors. The Gen Z-led protests in Kenya could indicate that future generations will not sit by and accept the status quo.
The Kenyan situation will continue to unfold but the lessons, so far, are useful. Citizens in other countries with oppressive financial regimes can switch to crypto and escape the harshness of centralized systems where they have no power. The legacy of crypto can go further than anything its early promoters could ever hope for.
Crypto News In South Africa and Nigeria:
Amid the controversy of the now withdrawn Finance Bill 2024 in Kenya, the following are other news making headlines in Africa:
- On July 2, the Financial Sector Conduct Authority (FSCA) of South Africa issued 63 licenses to crypto businesses, including exchanges, pushing the total number of approved companies to 138. Five of the over 380 applications were rejected, while 80 withdrew. Even so, those who choose to withdraw can reapply at any time, but only if they meet the strict selection criteria set by the regulator.
- In Nigeria, Mara, which recently rebranded to Jara, is struggling to stay afloat due to financial challenges. According to reports, the company, which raised $23 million in 2022, is in trouble primarily due to fund mismanagement, theft, questionable financial reporting, and high operational costs. It is alleged that the company executives created fake user accounts while having to deal with lawsuits.
- Dr. Emomotimi Agama, the Director General of the Securities and Exchange Commission (SEC) of Nigeria, is convinced the high crypto adoption among the country’s youth is primarily because of the private nature of top coins like Bitcoin and USDT and the fact that they don’t need to operate a bank account. Even so, the Nigerian SEC has been cracking down on crypto exchanges, banning Binance from operating, alleging tax evasion, and contributing to the rapid devaluation of the Naira. Though there are plans to regulate digital assets in the country, the executive wants users to exercise caution.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
