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January 20, 2019

How you are paying for Jubilee big loans

Notes of Kenyan Money
Notes of Kenyan Money

Every Kenyan forked out at least Sh1,228 monthly between July and September this year to service loans taken out by President Uhuru Kenyatta’s Jubilee administration.

A report by Controller of Budget Agnes Odhiambo reveals that the government paid out Sh147.4 billion for public debts in the first quarter of the 2018-19 financial year.

This means that each of the estimated 40 million Kenyans paid a cumulative Sh3,685 for the three months under review to settle Jubilee's ballooning loans.

According to the national government’s budget implementation review report, the National Treasury has allocated Sh870.6 billion towards public debt in the current fiscal year alone.

Of the Sh870.6 billion public debt allocation, Sh400 billion will go towards interest payment, while Sh470.6 billion was budgeted for redemption.

Kenya's public debt hit Sh5.05 trillion by September this year.

This means that if the loans were equally divided among 12.5 million households, each would have to pay Sh400,000.

In what signals Jubilee’s appetite for loans, the report reveals the government borrowed Sh92 billion locally and Sh3.1 billion from the international market within the three months.

The latest Controller of Budget report also shows that in the first three months of this financial year, the government collected Sh540 billion in revenue, representing 20.5 per cent of this year's Sh2.6 trillion target.

This means that more than a quarter of the total revenue collected was spent to repay government loans.

Through enhanced tax collection measures instituted by the Kenya Revenue Authority, the Sh540 billion was an increase of 32.3 per cent compared to Sh408.1 billion realised in he same period in the last fiscal year.

According to the statistics, KRA collected Sh329.1 billion from income tax, while non-tax income tax stood at Sh3.2 billion.

While the government collected Sh540 billion in the first quarter, details show that actual expenditure stood at only Sh429.3 billion, representing 16 per cent of the gross annual estimates.

This means that Sh110 billion was lying idle at the Treasury by September.

The 47 county governments received Sh23.5 billion in the three months under review to finance operations, though Odhiambo said some delays are caused by the Treasury.

The expenditure included Sh7 billion on recurrent programmes by Ministries Departments and Agencies and a further Sh160.5 billion on the consolidated Fund.

Read: Kenyans owe Sh100,000 each in public debt

However, in what appears to portend a gloomy future for most Kenyans who want more roads, water, schools and other infrastructural programmes, only Sh51.1 billion was spent on development, representing an absorption rate of 7.6 per cent.

Analysis of the recurrent expenditure shows that most government cash was spent on personnel emoluments at Sh88.6 billion, representing 40.7 per cent of total recurrent expenditure.

Domestic travel gobbled up Sh1.7 billion, while Sh1.1 billion was spent in rentals and rates on non-residential buildings.

Total exchequer issues for salaries and allowances for civil servants amounted to Sh781.7 million, while total expenditure amounted to Sh628.3 million.

Revealing massive expenditures on non-priority items, the government ministries and departments spent Sh1.2 billion on hospitality and training in three months alone, despite President Kenyatta's austerity order.

The President has several times endorsed austerity measures to curb waste and save funds for development, but it appears people working under him continue to splash millions on non-essentials.

In an ironic twist to the austerity mantra of the Jubilee administration, the national government spent 2.8 billion on domestic and foreign travels in the three months under review.

Of this, Sh1.7 billion was spent on domestic trips, while Sh1.1 was spent on overseas journeys by senior government officials.

The presidency — the executive office of the President and Deputy President William Ruto — was on a traveling spree, spending a Sh95.1 million and Sh16.8 million on local and foreign travel, respectively.

The Ministry of Interior and coordination headed by Fred Matiang’i was the biggest traveller, spending Sh288.8 million on domestic trips and Sh9.5 million on foreign journeys.

Members of Parliament — facing a barrage of public condemnation for seemingly unbridled demands for higher perks — consumed Sh669.9 million on domestic travel. including mileage when travelling to their constituencies.

The MPs are facilitated through mileage reimbursement when visiting their constituencies to serve their electorate at a rate set by the Salaries and Remunerations Commission.

Read: We are concerned about Kenya's debt burden, IMF tells MPs

The report also reveals the MPs spentSh324 million on trips abroad, bringing their total travel costs to Sh993.9 million in three months alone.

Separately the country’s 416 lawmakers spent Sh25 million and Sh11.2 million on training and hospitality, respectively.

With these resources having been spent, Parliament became the single largest government entity spending the most on training and hospitality.

The Parliamentary Service Commission, the statutory organ that employs MPs, spent Sh213.9 million on domestic travel and Sh184.6 million on overseas trips.

The huge amounts consumed by the prestigious 10-member commission could draw public uproar.

The PSC also spent Sh55.4 million and Sh32.1 million on training and hospitality, respectively.

Notably, the Salaries and Remuneration Commission, the body superintending public institutions on pay and allowances, did not record any foreign travel expenditure and spent just Sh4 million on local travel.

The Witness Protection agency and the Controller of Budget had zero expenditures on foreign travels as well but spent Sh1.8 million and Sh1.7 million, respectively, on domestic travel.

See: New Sh250bn Eurobond sparks debt fears

The Ministry of Tourism and Wildlife was the highest spender on legal fees, at Sh65 million. The Teachers Service Commission spent ShSh3.1 million.

The State Department of Crop Development consumed Sh500,000.

The David Maraga-led Judiciary spent Sh22.1 million on local travel and Sh5.6 on foreign travel.

The Judiciary spent a further Sh9.8 million on training and hospitality.

The Ethics and Anti-Corruption Commission was the only institution without local or foreign travel expenditure for the period under review.

Out of the Sh45.6 spent on development by government in the 90 days, Sh751.3 million was spent in refurbishing buildings, Sh368.7 million in constructing new buildings and Sh652.8 in civil works.

Also Read: US senate speaks out on China’s ‘debt trap’

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