(Bloomberg) -- Kenyan President William Ruto said he’s withdrawn his support for a contentious tax bill and called on lawmakers to scrap it, bowing to public pressure after protests against the plan to raise $2.3 billion in new levies led to the deaths of at least 23 people.

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“I decline to ascent to the Finance Bill, 2024,” and refer it to the National Assembly for reconsideration with the recommendation that all the clauses be deleted, he said in a letter to the speaker of parliament.

The letter followed a televised address in which Ruto said “I concede,” and would therefore not sign the bill. “I run a government but I also lead people. And the people have spoken.”

Ruto proposed the new taxes to improve state finances and access more International Monetary Fund financing. On Tuesday, lawmakers in his ruling coalition pushed through the bill — after dropping some of the more contentious levies such as a 16% tax on bread. While the fiscal reform plans have cheered markets, they triggered protests by residents struggling with rising food prices and a youth unemployment rate that the Federation of Kenya Employers puts at as high as 67%.

Protesters broke through police barricades and stormed the National Assembly just after lawmakers approved the legislation. Ruto in a defiant speech hours later termed the action treasonous and said he’d deploy the military to quell further violence. His reversal comes after his predecessor Uhuru Kenyatta and civil society leaders asked him to talk to protesters.

Secretary of State Antony Blinken spoke with Ruto and thanked him “for taking steps to reduce tensions and pledging to engage in dialogue with the protesters and civil society,” according to a State Department statement on Wednesday.

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Most of the protesters are young Kenyans in their 20s and 30s and have been mobilizing on social media platforms. While past anti-government marches were mostly organized by opposition politicians, the current rallies seem to be organic and largely peaceful — but they have been met by police firing live rounds, tear gas and powerful water cannons.

“I propose an engagement with young people of our nation to listen to their issues and agree with them on their priority areas of concern,” Ruto said. “I also propose that within the next 14 days, a multi-sectoral, multi-stakeholder engagement be held with a view to charting the way forward.”

While he also promised austerity measures, including a leaner travel budget for himself, and smaller allocations for hospitality, vehicle purchases and renovations, the commitment might fail to pacify the masses.

“My sense is that the depth of public feeling, expressed on social media and the streets of Nairobi, has forced the government to think again,” said Nic Cheeseman, professor of democracy at the University of Birmingham.

Ruto’s administration has been increasing tax rates and introducing measures to make the East African nation less reliant on borrowing, in line with fiscal reforms agreed with the IMF in 2021.

The Finance Bill was geared at raising 302 billion shillings ($2.3 billion) in additional revenue to help plug a budget deficit equivalent to 3.3% of gross domestic product.

The IMF, which helps countries with balance of payments deficits, often recommends austerity measures to fix the fundamentals of economies, which often amounts to acute short-term pain as the price for longer-term stability.

Julie Kozack, the IMF’s communications director, said in a statement that the organization was “saddened by the loss of lives and the many injuries.”

“We are committed to working together with Kenya to chart a course towards robust, sustainable, and inclusive growth,” she added.

The combination of a young population facing economic challenges has been a huge burden for African nations, as seen in the reactions to the tax law, according to Simon Quijano-Evans, chief economist at Gemcorp Capital Management. “Sub-Saharan Africa needs renewed access to a more affordable combination of public and private global capital and it needs that to happen fast,” he said.

The East African nation’s securities have handed investors a negative 1.3% since June 18, the biggest losses after Gabon and Egypt in a Bloomberg Index of developing-nation sovereign dollar bonds. The EM average was a positive return of 0.3% in that time.

Kenya’s 2031 dollar bonds reversed earlier losses after Ruto’s statement to trade slightly stronger on the day, with the yield at 10.67% by 6:56 p.m. in Nairobi.

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--With assistance from Monique Vanek.

(Updates with Blinken, IMF statements, starting in sixth paragraph.)

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