What you need to know:
- With mean characters in power pushing austere economic theories, no one abroad would be willing to lend Kenya money.
- Overall, the 47 county governments are a drain on the public purse while generating negligible revenue.
Every cloud has a silver lining if you peer at it keenly through a positive lens.
The deluge of news about budget deficits, energy price rises and errors in 33 million school textbooks could easily tempt Kenyans to suffer from unnecessary buyer’s remorse about their government.
However, emerging from a full year of unnecessary elections that gobbled up Sh50 billion and returned the same government to power, it is an economic miracle that the Budget deficit is a mere Sh84 billion.
After two elections loudly punctuated by violent protests and jealous disruption of business, the shilling is still holding its own against the major currencies, and the International Monetary Fund, saviour of wonky economies, is providing advice on how to raise revenue.
Election exigencies last year dictated that the people consume electricity at half price to abjure the risk of regime change, but with that hurdle safely surmounted, there is no reason for holding off on tax collection.
The blip Kenya Revenue Authority suffered by collecting Sh68 billion short of target can be quickly fixed.
Anyone who wishes to complain about a rise in the cost of living would do well to remember that had there been a change in government by the people who wanted to take power through riots and boycotts, the deficit would likely be tenfold and the country teetering on the brink of bankruptcy.
With mean characters in power pushing austere economic theories, no one abroad would be willing to lend Kenya money.
As it were, the country has been saved from disaster and investors abroad were falling over themselves to buy Kenya’s Sh200 billion Eurobond, which will be used to pay off earlier loans that fall due this year.
The voracious appetite for the most recent Eurobond, oversubscribed seven times, suggests there is more money where the first came from in 2014, only because Kenya pays its debts.
Fears about debt are highly exaggerated because even at the personal level, there is hardly a person who has no debts.
Kenya cannot develop without taking loans. The clever part of the loans Kenya has been taking is that the money goes into building roads, railways, infrastructure and irrigation schemes the creditors cannot seize and take to their countries in the fashion of local auctioneers.
The little extra saved from the Eurobond proceeds should be enough to fill the hole in the budget only if the wastrel county governments are reined in with spending cuts.
County governments are the home and hearth of corruption. Where the national government is a paragon of prudence and integrity undertaking developing, the counties are the sinkholes of conspicuous consumption and corruption.
It would not come as a surprise if much of the money borrowed abroad was getting lost in the counties.
The most recent report by the Auditor-General found only Sh10 billion lost in development projects at the national level, but the numbers for the counties are yet to come in.
If there is pain to be shared by the whole country, the counties must bear the greater weight of whatever austerity measures necessary.
County governments have not built a railway, or launched a web portal for any visibly large development project.
Overall, the 47 county governments are a drain on the public purse while generating negligible revenue.
They should be revisited in the next budget with a Sh18 billion cutback on their annual allocation.
Kenya’s Budget difficulties present an opportunity to interrogate whether or not the country needs so many governments.
The writer is a Programme Adviser, Journalists for Justice. The views expressed here are his own and do not reflect those of JFJ. [email protected]