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April 19, 2018

Debt burden, more borrowing a result of political ambitions

Finance cabinet secretary Henry Rotich and deputy speaker Joyce Laboso after he appeared before the Liaison Committee meeting Treasury CS at County Mini Chamber yesterday. Photo/HEZRON NjOROGE
Finance cabinet secretary Henry Rotich and deputy speaker Joyce Laboso after he appeared before the Liaison Committee meeting Treasury CS at County Mini Chamber yesterday. Photo/HEZRON NjOROGE
The debt question for Kenya’s economy is a debate that has lingered in the public sphere for a while, as a result of the now routine Eurobond external borrowing.

This infamous financial scheme is hitherto a household vocabulary that has otherwise become an annual stabilizer of our fiscal regime, thanks to the big brothers.

But how has the country reached that level of routinely depending on borrowing to sustain its expenditure after just a few years from a promising economic regional powerhouse, courtesy of the Kibaki administration? During the first years of the Narc government, we witnessed an economic revolution of a kind. The GDP shot from a dismal 0.1 per cent to about 7per cent. Money was unlocked from wherever it had been hidden. Banks were forced by new fiscal policies to open their doors for simple and huge credit, remunerations were reviewed, people borrowed and established businesses and the economy thrived as we witnessed steady growth.

That definition of an economy can barely fit our context today. Some would argue corruption is the cause. I beg to differ, being reminiscent of the fact that the vice was still rampant even during the Kibaki era. However, borrowing, particularly external borrowing was, minimal yet the economy thrived.

 

THE CONSTITUTION

I submit that our problems have been exacerbated by an overbearing political ambition in the form of the new Constitution and equally, a breakdown of our moral fabric. Through the 2010 Constitution, we created an overzealous democratic system that was essentially agitated by a section of political elites as they pursued for power in the guise of championing the rights of the people.

The adoption of an over-zealous constitution had the effect of expanded structures of governance, with a concomitant increased cost of running government operations at the expense of tangible economic empowerment for the lowly majority.

We now have counties in place, the Senate at the national level and a bloated National Assembly, which are now costing the taxpayer a whooping Sh32 billion per year to run. Yet, there has been no commensurate economic explosion from where to draw requisite revenues to finance operations of these institutions.

In fact, development and the implementation of the Constitution, which effectively installed devolution, were largely funded by foreign donors. How did our leaders envisage that a guest could build and furnish your house and continue paying your bills? Consequent upon funding of the expanded government and duplication of functions, the country is now spending more than it can generate ie beyond the GDP. It has fallen into an incessant cycle of huge external borrowing, further compromising future fiscal stability.

An overly independent Judiciary has demonstrated how the country can be put into jeopardy through thoughtless court rulings that emanate from undue influence on judges and magistrates, who are accountable to nobody other than their own interpretation of the law. Again, referent upon our moral quagmire, which occasionally compromises the integrity of judicial officers, the courts seem to be vulnerable to narrow and diverse interests of groups and individuals, and at times render irrational judgments tailored to suit those interests against the greater national and public good. This trend predisposes the country to anarchy and social disharmony on account of unbalanced court rulings.

 

POLLUTED POLITICS

Our polluted political competition during elections, usually precipitates an environment of perceived injustices, ridden with ethnic hatred, animosity and unwarranted apprehension that is antecedent for false promises and deployment of deceptive tactics to acquire power. Once the people are falsely convinced the person in the other camp is their enemy, they no longer posses the ability to assess the quality of leadership they elect. Worse still, they can hardly discern the real intentions of those seeking leadership.

And sadly, Kenyans have become highly gullible, particularly the huge rural demography. Their fate is obliviously placed in the hands of shrewd political merchants, who trade with their wellbeing. The conduct of these latter day traders, who are in the business of enriching themselves, is a far cry from the much-hyped patriotism we are so often lectured about.

 

POLITICAL MERCHANTS

The bigger tragedy is when our national and regional assemblies become sources of impunity and epitomes of theft of public resources. We have a class of political leaders whose egos are highly inflated, punctuated with an insatiable greed for wealth, probably referent upon our social-cultural disposition and a broken moral fiber.

It is regrettable that even institutions we established in the Constitution to help in regulating our spending and prevent public theft through harmonization of salaries, ie the Salary and Remunerations Commission, have been overpowered by collective efforts to sustain looting by successive Parliaments. It is not lost that the 10th Parliament blackmailed the President Mwai Kibaki into accenting to increased salaries and emoluments by threatening to shoot down a motion on budget estimates, thus depriving the government of much-needed funds to run operations.

When the SRC released a new salary structure for the 12th Parliament, just before 2017 election effectively reducing benefits for the MPs in consonance with prevailing economic realities, our “good patriots” headed to the courts to preempt the perceived injustice meted on them. Incidentally, one Gathoni Wa Muchomba, the Kiambu woman rep, got the wrath of her constituents for voicing her intentions to scuttle the SRC proposal. If that was the case for the public in Kiambu, feelings that are arguably representative of the entire country, who then do these people represent?

 

ABYSS OF DECEPTION

Our social-cultural disposition coupled with a moral decay and lack of a solid value system, has put us into an abyss of deception, which has effectively enslaved our people to foreign masters. These foreign economic powerhouses rule us indirectly by determining what our leaders do with respect to freedoms, rights and development. They micro-manage or remote control our entire economic and political systems, why? Because we have no money.

In fact, the clamour for a new constitution was first conceived as an effort to dismantle a regime that was perceived as oppressive and inept, blamed on a single individual —  President Daniel Moi. The aspirations for greater freedoms were albeit legitimate, considering the prevailing circumstances and the emergent global political order and particularly how those events impacted on the African continent. However, that campaign was contaminated with covert intrigues for power and domination from diverse interests both locally and internationally.

Did Kenyans really give unto themselves a robust Constitution as has been widely acclaimed, and with it a vibrant democratic system as envisaged? Yes and No: Yes because they voted for it having been persuaded by their leaders. No because the social and political framework then, and even now, does not allow large sections of the masses to interrogate and internalise the impact of such complex structural changes on their personal lives for them to make informed decisions. Similarly, we did not give unto our selves the said Constitution because, the process of crafting it was hugely funded and influenced by foreign powers through donor agencies.

What we are witnessing today, is a country wreathing under a heavy debt burden, trying to put a brave fiscal face every year; but with poverty and cost of living spiraling: A Constitution that provides excessive freedoms devoid of responsibility, a struggling economy and an increasingly greedy and myopic political class that seems to have no remedy for our national problems. An unfettered scramble for our natural resources and business space by foreign powers can best be described as a tight yoke and shackle, on the neck of a weak donkey.

The fiscal management agencies such as the Treasury, Central Bank, the SRC and the Commission for Revenue allocation, which by law are mandated to streamline our spending and resource distribution, have been overshadowed and weakened by an insensitive and greedy political class.

The elites have adopted perpetual political bickering from January to December, largely contaminating a desired conducive environment for growth and development.

This trend is perpetuated in an unashamed manner, as leaders jostle for space to execute corruption master plans through business and political deals for personal and group aggrandizement.  This kind of political wheeler dealing, as exemplified by our leaders, and the breakdown of our moral fabric, constitutes a threat to nationhood and predisposes us, as a nation, to perpetual domination and undue exploitation through debts by foreign masters without apology.

 


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