The tragic deaths in Nairobi this week, where protests over rising fuel prices turned violent, serve as a grim reminder of what happens when governments abandon fiscal discipline. At least five people have been killed as Kenyan citizens took to the streets, angry at a 16% increase in petrol prices. This is not simply a story of social unrest; it is a textbook case of economic mismanagement.
The Kenyan shilling has lost a third of its value against the dollar in two years, inflation is running at 8%, and the government is struggling to service its debt. The result: a population squeezed by the cost of living and a leadership that has run out of options. Contrast this with the UK, where our energy markets, for all their flaws, remain a beacon of efficiency and stability.
While the Kenyan government has resorted to price controls and subsidies, burying its head in the sand, the UK has allowed market forces to operate, even in the wake of the energy crisis. Yes, British households have felt the pinch, but the system has not broken. Gilt yields remain anchored, the Bank of England’s credibility, though battered, is intact, and capital continues to flow into our energy infrastructure.
The lesson is clear: when governments try to cap prices or manipulate markets, they only delay the inevitable and often make the crash more violent. Kenya’s tragedy is a cautionary tale for any chancellor who thinks they can defy the laws of economic gravity.
