Kenya's president William Ruto says he won't sign the finance bill that led protesters to storm the nation’s parliament in anger over rising costs.
At least five people were shot dead as protesters stormed the building in chaotic scenes in the capital Nairobi on Tuesday.
A fire erupted in the parliament building while thousands protested on the streets outside, including Barack Obama’s half-sister Auma Obama, who was teargassed on live television.
The government wanted to raise funds to pay off debt. Kenyans said the bill caused economic pain as millions struggle to get by.
"Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this finance bill 2024, I concede,” Mr Ruto said in a televised address on Wednesday.
“And therefore, I will not sign the 2024 finance bill, and it shall subsequently be withdrawn.”
The president said he would now start a dialogue with Kenyan youth, without going into details, and work on austerity measures - starting with cuts to the budget of the presidency - to make up the difference in the country's finances.
The move will be seen as a major victory for a week-old protest movement that grew from online condemnations of tax increases into mass rallies demanding a political overhaul, in the most serious crisis of Mr Ruto's two-year-old presidency.
On Tuesday, police opened fire on crowds who massed around parliament and later broke into the assembly's compound, minutes after lawmakers had voted through the tax measures and sent them on to the president.
The chaos on Tuesday led Kenya's government to deploy the military and Mr Ruto called protesters' actions “treasonous”.
It was the biggest assault on Kenya's government in decades.
At least 23 people were killed across the East African country and another 30 were being treated for bullet wounds, the Kenya Medical Association said on Wednesday. Medical officials in Nairobi said scores had been injured.
Heavily armed police patrolled the streets of the capital Nairobi, which were quieter than usual on Wednesday.
