Last week, two events on irregularities relating to money in the country dominated the media. The first was the Sh2 billion fake cash found at a client’s safe deposit box in a Barclays Bank branch. A few days later, one of the dailies reported about an probe by the Directorate of Criminal Investigations on the loss of Sh5.6 billion on the eCitizen platform.
Amid these and other ongoing financial probes, some Kenyans on social media sarcastically posted that Kenya had been shut down for renovations. The social media posts seemed to suggest that the country had reached the stage for such a decision.
Reports about alleged corruption and misuse of public funds may sound just like numbers games among the political class, but the economic implications are already weighing down on the economy and Kenyans.
First was the announcement that no new projects would be started until the ongoing ones are completed. The concerns were mostly rebuffed by bureaucrats. However, the emerging reality is increasingly pointing to financial constraints facing the country.
The introduction of devolution was celebrated as a game changer in Kenya’s governance. It continues to be so.
Consequently, evidence of how well the economy is doing should be measured by progress in devolution. On these there are two stories, one positive and the other not so rosy. On a positive note, devolution has transformed many parts of the country.
On the other hand, devolution is already choking under the yoke of insufficient resources. When counties were established, many started new projects in their areas of competence. Therefore, suppliers and contractors trooped to these new administrative and governance units looking for business. There was excitement in the private sector on these opportunities.
These have since turned into tears for several of those who successfully obtained tenders due to delayed payments and in some cases non-payment.
On the other hand, county governments have been complaining about delayed disbursements of their allocations from the National Treasury.
The official response has always been that the delays are either non-existent or due to failures on the part of the counties to follow procedure. The reality, however, is that resource constraints contribute to these delays.
Secondly are public agencies. It started with reports of delayed salaries, then non-remittance of statutory deductions to challenges in running these institutions. Being a chief executive officer in a public institution for the honest public servant is increasingly an exercise in juggling financial cards as opposed innovative ideas to transform the institutions.
The Kenya Revenue Authority (KRA), which is charged with collecting revenues on behalf of government, has been struggling and increasingly misses its revenue targets. It is easy to blame the authority but on deeper analysis, the results are a reflection of the health of the country’s finances.
Debt repayment
It is time to take drastic and radical measures to deal with what is slowly emerging to be a crisis. When we spend the bulk of our revenue on repaying debts, one does not need to be an economist to know that we are on the wrong path.
Secondly, we have invested in too many things at the same time. Being ambitious is a good thing and should be encouraged.
However, being over-ambitious leads to recklessness. It is time to acknowledge that we may have crossed the line on certain development projects.
In addition, the wanton plunder of public resources only serves to compound the country’s financial burden. Consequently, it is time for a radical departure from our business as usual approach to solving the current crisis.
The upcoming budget provides an opportunity for austerity measures which focuses not on raising the taxation level but on reducing government expenditure.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
