Boundary review offers new opportunity to rebuild Kenya

Judging from recent press reports, it appears that the Kenya Private Sector Alliance (Kepsa) is finally annoyed with the government.

There’s a fresh realisation that corruption, economic crime, usurious taxes and poor delivery of public goods affect private sector performance.

Which government? Well, look at our national leadership that went to the United Nations General Assembly (UNGA) the other day and told the world, if my reading is right, that Kenya suffers from “state capture” and international actors are to blame.

Don’t cry for me, Kenya!

Back home, we learnt that, in the first two months of the 2018/19 fiscal year, we spent a frightening Sh57 out of every Sh100 of our taxes on debt service.

Actually, that’s not the full story. Our government actually had Sh50 in the account at the beginning of this fiscal year.

But, to continue to exist, it needed to issue Sh65 for national government recurrent stuff and Sh6 for development matters.

Then, that Sh57 for debt service, and Sh3 on pensions and other constitutional business. In these first two months, counties were favoured with two bob.

How did we balance the books? With Sh33 in new borrowing, mainly domestic, crowding out private sector yet again because the interest rate cap favours excessive government borrowing.

Yet, by the end of August, government had Sh54 in the bank account. Why? Eurobond I and China payments, anyone?

Don’t cry for me Kenya!

At the social level, how do we allow someone to murder 55 people on the road, and make this a headline? The other day, 20 people tragically passed on in the US, and every US news network spoke to the biggest accident in 10 years.

In Kenya we’re 2,500-plus dead before Christmas.

The question is why the most serious murder crimes we read in the press are focused on the lifestyle of women and girls, and not the arrogant and hedonistic behaviour of men and boys.

Where is leadership in a country going and gone bad?

I digress, so, as we wipe our tears of anger away, let’s look again at where Kenya is today, by the numbers.

The first two months of debt distress are nothing to talk about. The full year estimate from our Treasury mandarins doing “happy clappy” in the annual World-Bank-IMF meetings in the lovely leisure spot known as Bali, have left Kenyans with Sh52 in debt service out of every Sh100 we pay in taxes.

In the meanwhile, the national government (salaries, services and corruption) will demand Sh56. Then we will be asked for another Sh24 for “development”.

If they are lucky, counties might get Sh19 of our taxes, and we’ll spend Sh6 on pensions, et al.

This requires us to borrow another Sh50 to balance the books, in Kenya, not Bali.

But here’s the kicker. If we are to believe these Treasury chaps in their boxers and swimsuits, here’s how Kenya’s 2022 future looks: Sh60 of every Sh100 of our taxes in 2022, according to their Budget Review and Outlook Paper, goes to national government (salaries, services and corruption), up from Sh56 this year.

The dream is that Sh35 goes to development, and Sh30 to debt service, down from Sh52 this year.

Accounting for grants and other non-tax revenue, this means we still need to borrow Sh28 in order to give some spare change to counties in the order of Sh14 (below the constitutional threshold).

What about the burgeoning referendum debate? Don’t be fooled, that’s a diversion from our fiscal crisis. And that leads me down the road to the building bridges initiative.

Given what is happening on the ground, this now looks like a hopeful opportunity that has become a road to nowhere in socio-economic terms.

Here are two big things that could happen in Kenya over the next 4-5 years.

One, the census and boundary review, which is hopefully aligned with the biometric voter registration project, could truly be transformative — an M-Pesa moment.

This fixes our national identity issues. Building bridges must not be a diversion from serious national stuff that this process is.

Two, the Continental Free Trade Area. Once we finally figure out how to harness the innovative, survivalist capabilities of our young people into a positive Kenyan entrepreneurial culture, we begin to rebuild Kenya.

That, to my mind, is our county issue.

I suspect we will not fix Kenya with leadership excuses.

Thankfully, the private sector is finally waking up to our terrifying moment.