Kenya's Gen Z protests now spark global rethink on IMF conditions

Recent protests in Kenya led by Generation Z against an International Monetary Fund-backed Finance Bill, 2024 have prompted a significant reassessment of the conditionalities imposed by one of the oldest Bretton Woods institutions.  

As discontent swelled among young Kenyans regarding the perceived inequities of the proposed reforms, IMF insiders miles away in Washington DC felt that better communication from Kenyan policymakers would have mitigated the unrest and avoided loss of life. 

This has emerged from extensive conversations with IMF insiders by The Standard in Washington where global leaders are gathering for the annual meetings of the IMF and the World Bank. 

The protests highlighted a growing resistance to policies that many young Kenyans viewed as detrimental to their economic future.  

Kenya, through its recent globally broadcast protests against an IMF-backed Finance Bill, has become a cautionary tale among IMF staff, global leaders and IMF watchers, The Standard has learnt. 

The unrest among Generation Z reveals how inadequate communication and a lack of understanding about the reforms can lead to widespread resistance and undermine policy objectives, IMF insiders said. 

The reflection by IMF insiders is also captured in a new IMF paper titled Understanding the Social Acceptability of Structural Reforms. 

The research published in Washington this week underscores the need for effective communication strategies to foster public support for such reforms.  

The Bretton Woods institution is a lender of last resort for cash-strapped countries like Kenya. The paper argues that miscommunication and misinformation often derail policy acceptance, emphasising the importance of addressing behavioural factors that influence public perception. 

This case study highlights the risks of imposing conditionalities “without fostering trust and consensus,” demonstrating that without addressing the behavioural aspects of public perception, even well-intentioned reforms can falter, ultimately complicating the economic landscape they aim to improve. 

“Effective strategies must be backed by strong institutional frameworks that foster trust and a two-way dialogue among stakeholders and the public,” it says.  

“Expanding policymaking toolkits to incorporate citizens’ views can lead to greater social acceptance and successful implementation of reforms.” 

Historically, passing structural reforms has been a challenging endeavour for governments. 

The IMF’s recent findings indicate that the pace of reform efforts has more than halved since the global financial crisis of 2008-09. 

Notably, nearly 20 per cent of policies aimed at increasing competition in sectors like electricity have failed to be implemented, often due to public resistance. The report suggests that effective communication and stakeholder engagement are critical to successful implementation. 

The IMF research highlights that beliefs and perceptions significantly shape attitudes toward reforms, with socio-economic factors accounting for only a small fraction of public support.  

In surveys conducted for the study, perceptions about policies and their implications were found to account for roughly 80 per cent of the support for reforms. Misunderstandings about how policies work can create substantial barriers to acceptance. 

Experts argue that strategies to build consensus, such as participatory budgeting and crowdsourcing, can enhance public trust and cooperation in the reform process. 

The IMF report suggests that fostering a two-way dialogue with stakeholders is essential for creating an environment conducive to reform implementation. 

While the IMF’s findings provide a roadmap for improving public acceptability of reforms, they also caution against viewing social acceptability as an end goal in itself. Policies that lack sound design or that fail to address the genuine concerns of the populace may encounter resistance regardless of public support. 

As Kenya navigates this turbulent political landscape, the IMF’s reflections on the current situation may serve as a crucial lesson for other nations grappling with similar challenges.