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Ideas & Debate

Our Sh8.8 trillion economy will stand out at Sh 14.7 trillion in 2022. FILE PHOTO | NMG 

It is time again to reconnect the dots. Tax increases to fund a budget hole that implicitly assumes record revenue collection. A slight lull in the very public war on corruption as cases are presented in court. Heightened and increasingly aggressive political noise that appears to disrespect the “handshake”. A current, and arguably correct, media focus on murder most foul, and suspected murderers ‘most nasty’. These are just Kenyan headline pages.

Then there’s the quiet news. In Quarter 2 (April to June) of 2018, the economy grew by 6.3 per cent, as against 4.7 per cent in our 2017 election year. The big public question remains why everyday Kenyans aren’t feeling it.

The quiet answer reflects what former World Bank Kenya director Harold Wackman once advised the Moi regime: “When you’re flat on your back, the only way to look is up”.

Kenya’s growth is not secular (as in, consistent over time), but episodic (full of hills and valleys). A 6.3 per cent simply returns us to where we should have been without the joke we call elections.

It’s also an average. Like the ridiculing analogy of one having their head in the fridge and feet in the fire and feeling “averagely warm”. Where’s Einstein’s theory of relativity when we need it? If 8,500 people own – basically – the national wealth, and therefore control our income opportunities, we have a “let them eat chapati” French-like Revolution in the making.

It doesn’t help when one of our top political leaders, who apparently hopes to be President pretty soon, was reported last week, not in Nairobi, but addressing villagers in rural Kenya, stating that Kenya’s debt to GDP ratio is 5.8 per cent, and actual public debt is Sh560 billion.

In other words, all official reports about a debt to GDP ratio 10 times as much, and actual debt proportionately similar, have been grossly exaggerated.

This is Mary Poppins stuff, from our childhood, when the world’s longest word for kids was “supercalifragilsticexpialidocious”.

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Earlier, on the same day that our eyes were glued to the National Assembly’s hypocritical shenanigans over the VAT on fuel (having earlier approved a Supplementary Budget that increased, not reduced, our budget deficit), the 2019/2020-2021/22 Budget Review and Outlook Paper (BROP) was quietly published amidst more “jobs for the boys” parastatal appointments.

On the BROP, our National Treasury effectively offered a one-day notice for comments (document dated 19 September, loaded onto website 20 September, comments due 21 September).

In perspective, this BROP essentially lays out the Jubilee administration’s fiscal plan – basically President Uhuru Kenyatta’s legacy — to the end of its term, even though the actual economic plan — Medium Term Plan (MTP) 2018-2022 – remains in hiding; probably looking for tenders.

Five big numbers stand out. Our Sh8.8 trillion economy will stand out at Sh 14.7 trillion in 2022. Our Sh5 trillion public debt will have grown to Sh7.2 trillion.

Our Sh1.3 trillion in tax collections (forget this year’s Sh 1.8 trillion projection) will have grown to Sh 2.3 trillion in 2022, yes, a trillion shillings. Expenditure? Last year’s Sh2.1 trillion will be Sh3.2 trillion by then.

Counties? Please don’t cry. Last year’s Sh327 billion slowly creeps up to Sh391 billion.

Looking at the proportionate increases — one doesn’t even need to do a calculation — these are clearly “Alice in Wonderland” projections, probably intended to impress our creditors.

Others have commented far better than I can within this space, but it is important that we ask who is served by these projections?

This brings us back to connecting the dots. Think about the handshake as socio-economic choice, not political battle. Which suggests one of its core aims must be to find new ways to rethink said socio-economy, and grow the tax base we need to viably finance a “fit for purpose” government from our own resources.

Put differently, the handshake should not be a source of political aggravation and panic that affects day to day economic opportunities and expectations.

This further suggests that current referendum calls are misplaced; why mutilate the Constitution when we haven’t yet reformed government?

How do we claim an expensive Constitution that hasn’t been properly implemented?

Who must we blame for the plug-and-play approach we have adopted to its implementation – keeping business as usual, and then moaning about new institutions?

Kenyans are connecting the dots. Watch this space.



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