The 2007-08 Kimunya budget blues

The finance minister Amos Kimunya will be reading the budget most likely on Thursday 14th June. As we all know, the budget is the most important statement any government gives in any year. It outlines in detail how the government intends to raise revenue and how it intends to spend it. Nearly all the revenue is raised by taxation. We all know that because president Kibaki always reminds us to pay tax.

Some years back the budget used to be an exciting moment for Kenyans. Many expected tax relief especially the lowly paid. Many who indulge in luxury expected to be hit hard and therefore waited almost breathless to hear which areas of their indulgence will be affected. These days however people do not expect much from the budget statement. They know it is just more of the same thing; taxes without service delivery. Soon Labour Day will be like the budget day. People go expecting a salary raise but nothing of the sort happens.

In the coming budget, Amos Kimunya will be telling Kenyans that he expects to raise Shs 520 billion through taxation and appropriation-in-aid. He will also be telling us how he intends to utilize the same. First he will be telling is that Shs 120 billion will go to education. Kenyans have no quarrel with that because we love children and we want the best for them. He will then tell us that Shs 56b will be spent on public safety law and order. This is mind boggling because Kenyans have not seen any internal peace. Tribal and land clashes is the order of the day. Mungiki rules and beheads almost at will. Kenyans feel unsafe in their homes. There are only 36,000 policemen and women guarding over 32 million Kenyans. If we go by the recommended United Nations ratio of a minimum of one policeman to 700 people then Kenya is short of 11,000 police officers. The country lacks the forensic ability to investigate and apprehend criminals. With Shs 56 billion Kenyans expect that a little more can be done to improve the security situation. Kimunya will also allocate another Shs 38 billion for national security.

This is the money we pay for them to spy on us. Yes the people who spy on us must be paid well. Not that we agree but that kind of is a bit rather steep. Well, it is also going to be used to defend us against our neighbours who are just about to join us in federation.

Kenya is an agro-based country and one would expect Kimunya to give a big chunk to agriculture and rural development. He will not do that. Out of the Shs 56 billion at his disposal he is going to allocate this sector a paltry 28 billion. This amount is only six per cent of the annual budget. So no one should expect irrigation to be undertaken in arid and semi-arid areas. Not much will be done for livestock development programme.

The minister is going to allocate shs 52 billion for public administration. This is rather high. The country needs a lean and efficient civil administration not a bureaucratic one which one document is passed on to six officers before action is taken. On the contrary, more districts are being created. In Kenya we have divisional officers –D.Os who are nearer to the people that they administer and deliver services to. These D.Os are graduates, young and energetic and above all qualified by way of training in government institutions. It would be cheaper to delegate the work done by D.Cs to D.Os. Kenyans will get services much nearer and less bureaucratic. There is no point to increase the number of districts as it is a replication of what can be undertaken at divisional level.

The minister will also announce that he has allocated Shs 38 b for health care. You have probably noticed now that taking care of the health of 32 million Kenyans is going to get a similar amount as intelligence and defence. This is a pity. In countries that health care of its citizens is paramount, the budget allocation is usually 12 per cent. Going by our case the allocation for health should be a minimum of shs 55 billion.

Physical infrastructure is going to get an allocation of shs 85 billion. First there is no road, bridge, dam or any major project that ever get completed within a year in Kenya. We have seen contractors doing one kilometer road like the procession way that connects state house to Serena hotel for three years and still not complete. The three-kilometre Mbagathi road that has now taken four years and is not complete.

Contractors in Kenya do not want to leave site once given work. They collude with government engineers to ensure work is delayed for flimsy reason and all the time the blame is apportioned to the government so that the tax payers foot the extra bill. The contractors do all they can to stay on site three to four times longer.

The way forward is to allocate money for infrastructure maintenance of about Shs 20 billion. An infrastructure development board of Shs 150 billion can be floated ad a business like board of shs 150 billion can be floated and a business like board be set to undertake these projects The ministry engineers should only undertake maintenance.

I wish Amos Kimunya well in the task ahead. Am sure he could do better.

Joe Donde.

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One Response to The 2007-08 Kimunya budget blues

Kenyanomics said...

Based on your analysis, civil service consumption will again crowd-out investment on infrastructure and human capital.

Spending more on bureaucracy means more red tape for entrepreneurs, whereas taking care of infrastructure means providing Kenyans with avenues to participate in the economic process.

That's a simple economic common sense.