Kenyan president William Ruto says he will not sign into law a finance bill proposing new taxes a day after protesters stormed parliament and several people were shot dead.
The government wanted to raise funds to pay off debt.
Kenyans said the bill caused economic pain as millions struggle to get by.
The chaos on Tuesday led Kenya’s government to deploy the military, and Mr Ruto called protesters’ actions “treasonous”.
The president now says the bill caused “widespread dissatisfaction” and he has listened to the people and “conceded”.
It is a major setback for Mr Ruto, who came to power vowing to help Kenyans cope with rising costs but has seen much of the country unite in opposition to his latest attempt at reforms.
“It is necessary for us to have a conversation as a nation on how to do we manage the affairs of the country together,” the president said.
Kenyans faced the lingering smell of tear gas and military in the streets a day after the latest protests saw thousands storm parliament, an act of defiance that Ruto called an “existential” threat.
At least 22 people were killed, a human rights group said.
Mr Ruto acknowledged the deaths, calling it an “unfortunate situation”, and offered condolences.
The capital, Nairobi, has seen protests in the past, but activists and others warned the stakes are more dangerous.
Mr Ruto on Tuesday vowed to quash unrest “at whatever cost”, even as more protests were called at State House on Thursday.
Soldiers patrolled alongside police, who were accused of shooting several people dead on Tuesday.
Kenyans united beyond tribal and other divisions in a youth-led effort to keep the finance bill from becoming law. It would have raised taxes and fees on a range of daily items and services, from egg imports to bank transfers.
The government wanted the revenue to pay off debt in East Africa’s economic hub.
There were no reports of violence on Wednesday, but there was fear. Civil society groups have reported abductions of people involved in recent protests and expect more to come.
“We are dealing with a new phenomenon and a group of people that is not predictable. If it would have been the normal demonstrations, I’d say it will fizzle out with time, but we don’t know whether these people will fear the army,” said Herman Manyora, an analyst and professor at the University of Nairobi.
He said Kenya’s president missed an opportunity in his national address on Tuesday night to calm tensions and adopt a more conciliatory approach.
“We expected him to appreciate the gravity of the issue and empathise with the young people,” Mr Manyora said. “Instead, people saw an angry president who is reading a riot act to the nation.”
Many young people who helped vote Mr Ruto into power with cheers for his promises of economic relief now object to the pain of reforms. Part of the parliament building burned on Tuesday, and clashes occurred in several communities beyond the capital.
At least 22 people were killed, the Kenya National Human Rights Commission said. Commission chairperson Roseline Odede told journalists that 300 others were injured and 50 people were arrested.
The mother of a teenager who was killed, Edith Wanjiku, told journalists at a morgue that the police who shot her son should be arrested and charged with murder because her 19-year-old son had been unarmed.
“He had just completed school and was peacefully protesting,” she said.
Parliament, city hall and the supreme court were cordoned off on Wednesday with tape reading “Crime Scene Do Not Enter”.
Authorities said police fired over 700 blanks to disperse protesters in the Nairobi suburb of Githurai overnight. Videos of the gunfire were shared online.
Opposition leader Raila Odinga condemned the killing of protesters and “brute force” of authorities and called for dialogue, asserting that Kenya’s constitution had been suspended.
