Economy or politics – Kenyatta’s legacy choices

86

BY DAVID ONJILI

The World Bank and the International Monetary Fund (IMF) have recently been pushing the Kenyan government to shrink its payroll; this includes cleaning its payroll off ghost workers and trimming the workforce through a structured retrenchment – all this in a bid to enable government safeguard fiscal consolidation from recurrent expenditure to development.

President Uhuru Kenyatta has his Machiavellian moment to implement for posterity an agenda that will cement his legacy. While his big four agenda (manufacturing, universal healthcare, affordable housing, and food security) takes precedent and makes headlines, there is an area in which he can now do the walking and stop the talking.

With all development infrastructures in his administration currently being financed through debt, it’s high time that he supervises the prudent and meticulous utilization of borrowed funds. He has the luxury of ignoring, like a fox, the politics of succession and finally leave a legacy that will be the foundation of a turnaround from the current economic slump the country is in.

It doesn’t go wrong. It starts wrong

President Kenyatta’s action to create the post of the cabinet assistant secretary slots that were filled by mainly politicians who had lost in the just concluded elections to appease voting regions was in bad taste, especially for a head of state who seeks austerity at a time when the majority of citizens in the country are living on the breadline.

Yet, to cement his legacy, he can undo some of the bad moves he has made and go on to leave an indelible mark as Kenya’s 4th President.

The current unsustainable wage bill if not checked may force his administration to finance it through debt. Time for the government to mobilize resources through collection of taxes

Lately, both elections and appointments into public service are openly viewed as a means to quick, big money. World over, billionaires are never salaried civil servants but ingenuous entrepreneurs. In Kenya however, elected leaders continue to amass vast quantities of wealth through plundering of national resources.

A lifestyle audit on all civil servants has always gone ahead but it lacks the political goodwill. In 2009, as Minister for Finance, Mr Kenyatta introduced the VW Passat cars for ministers, their deputies, parliamentarians and other civil servants as part of the austerity measures. The reasoning was that the 1800cc cars would enable government save an estimated Sh1 billion. Experts in the motor vehicle industry faulted the move saying that the vehicle’s overall repair and maintenance cost over a period of around three years were just as equal as those of the fuel guzzlers government was running away from.

Whatever the side of the debate you took, the intention and goodwill was welcome, such measures and the opposition they met from civil servants point to the kind of mentality Kenyans have for public office. It is self-enrichment and not service delivery. While the Passat may have presented a bad option in terms of repairs and maintenance, why can’t government officials use public transport or lower capacity cars like the Mercedes C200 or E180 against their fuel guzzlers?

As president, Mr Kenyatta must supervise and enforce the mentality that public service is about service delivery within the stipulated terms of employment. There must be a moral balance from civil servants between individual utility function and public utility function. What is the need of owning a top of the range car when the roads in your area are impassable and the local dispensary lacks medicine?

Support the Salaries and Remuneration Commission

The mandate of this independent Commission as established by the Constitution of Kenya 2010; under article 230 is to set and regularly review the remuneration and benefits of all state officers and also advise both the National and County Governments on the remuneration and benefits of all other public officers. To attract the best talents, they must ensure attractive packages. It must also not escape us that this commission has always found itself at loggerheads with Parliament.

Time and again, recommendations by the SRC to cut on wastage especially in allowances have been met with stiff opposition including threats to pass legislation to disband the commission or eject the chairperson of the commissioner.

Dr Joy Kiiru, an economics lecturer at the University of Nairobi acknowledges the fact that Kenya has consistently failed to have strong institutions to ensure that we maximize public utility especially when individuals of weak moral strength have continued to find loopholes to manipulate the system to their favour and get away with it.

The challenge to the President then becomes how to balance political interests, which pertain to power and control of resources on one hand while ensuring that the welfare of Kenyans is safeguarded through the provision of improved public service delivery, employment and security.

Kenyans are looking forward to the dawn of an era where those who aspire to be billionaires will seek entrepreneurial opportunities as opposed to public service. President Kenyatta can secure such a legacy only by ensuring he does not have sacred cows in his government, by ensuring that all public servants are measured by the same yardstick irrespective of their proximity to the centre of power.

President Kenyatta’sJubilee Party has a superior majority in both Houses of Parliament. The SRC on the other hand works under laws made by Parliament in which the President has a majority; they need political goodwill to execute their duties. Salary increases must be rational and checked against productivity and existing economic times. Institutions should attract people who want to deliver service and not those seeking self enrichment.

Bank interest rates

Interest caps have reduced credit to the small and medium enterprises sector owing to the inability for banks to price for risk. The discussions to remove interest rate caps are timely, though the challenge to check excessive interest rate spreads still remains. However the solution lies more in creating a competitive banking sector and eliminating information asymmetries. 

According to Dr. Kiiru, small and medium enterprises in Kenya provide the majority of employment opportunities within our borders. Access to credit by this sector is therefore fundamental to poverty reduction and
wealth creation.

The large entrepreneurial ventures contribute to the economy through employment and tax remissions, they are also more capitalized and therefore less risky to lend to by banks. However, their ability to create employment opportunities is limited, and access to cheaper credit may not have as strong trickle down effect as access to credit by SMEs that employ the majority of Kenyans.   

Dr. Kiiru believes that a continuous lack of men and women with strong integrity has been our main undoing. Those who have stood firm on principle have either paid with their lives or have been subdued by intimidation especially by Parliamentary committees.

The President can throw his weight behind constitutional office holders and civil servants of integrity. His word of solidarity is enough confidence, alongside Kenyans of goodwill who have kept the government in check, by naming and shaming bad public office practices.

The judiciary’s role too cannot be underscored. They must protect within the law civil servants executing their mandate but must also not be used to issue orders that are malicious and in bad taste and seeking to undermine government efforts to punish any state officer using his office for personal and not public utility.

Economists believe that in a country like Kenya with a five-year election cycle, what is happening is not new. The last two election cycles were characterized by excessive government spending, which must be checked in what Dr. Kiiru refers to as short-term macro-economic stabilization where the government contracts public expenditure as a mop up exercise to restore macro-economic stability. 

The civil service wage bill has been consistently described as unsustainable and thus in need of rationalization. This is all normal economic management process and if well implemented and benefits re-invested back in to the economy, employment would be restored. Periodical austerity measures are therefore normal and if well implemented within a vibrant financial and goods market sector, the benefits would outweigh the short-term pains and costs.

Perspective

Kenya’s total public wage bill including ministries, departments, agents, commissions, the disciplined forces and independent constitutional offices is currently estimated at Sh627 billion, close to 12% of GDP as opposed to best global standards of 7%.

Upon retirement, both Presidents Mwai Kibaki and Daniel Moi received a lump sum payout of Sh25.2 million each, they have a monthly pension of Sh560, 000, house allowance Sh379, 500, fuel Sh247, 500, entertainment Sh247, 500 and Sh379, 500 for utilities like water and electricity. A similar scenario, albeit with slightly lower figures cuts across retired civil servants. This is the burden that taxpayers have to contend with every financial year for the many civil servants who retire. The fact that it is taxpayers’ and not individual contributions that pay for this should motivate both the President to get tough on service delivery and efficiency to secure his legacy.

Our neighbours Tanzania and Rwanda are doing it. Both countries boast of well functioning public transport, their Presidents have a hands-on approach towards the general welfare of the matters that affect their citizens. Corruption in the named countries is being fought both using technology to eliminate human sabotage and the goodwill of the leadership.

While the democratic gains Kenya has made since enactment of the progressive 2010 Constitution should not be rolled back, Mr. Kenyatta should not sacrifice his legacy for anything. After all, the same public will judge his success or failure when his term comes to an end and four years is not very far away.