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Society – Exposed: Where all your money goes

Publication Date: 4/20/2008

The most expensive item on my pay slip is not food, transport, school fees or beer. It not even those things over which the governor of the State of New York recently lost his job. The most expensive item on my pay slip is the government of the African Republic of Kenya.

First, the government takes an outright one third in direct taxes. If I spend my whole salary on goods and services, it means, taking into account 16 per cent VAT, 46 per cent of my salary goes to the government. Keeping in mind that there are many more taxes, it is safe to assume that I work 14-hour days and hand over two-thirds of my pay cheque to the government.

IT IS THEREFORE IMMORAL TO SEE SOME sub-literate thug strutting around spending  all that money and having no respect for me, the man who has to work to keep his mistresses in expensive underwear, his children in good schools and the gas tanks of the juggernauts I have bought him full of fuel.

If this government does not spend our money with more care and show us more tangible benefits for it, including a tax cut, I shall be among the first to join a middle class revolution against it.

So you can imagine how excited I was by a story in the Daily Telegraph published under the headline “Kenya’s cabinet soaks up 80pc of the budget”. It was based on an interview with Mwalimu Mati, former director of Transparency International and head of the Mars Group, who campaigns against corruption.

“Kenya’s expanded new government,” the story read, “will spend 80 per cent of the entire national budget on luxury vehicles, inflated salaries for ministers and general running costs, a local anti-corruption group claimed on Wednesday.

“Of Kenya’s annual budget of £5.4 billion, more than £4.3 billion will go on 93 ministers and their government’s general running costs. Only £1.3 billion will be left for roads, schools and hospitals for Kenya’s 38 million people.”

For a moment there I thought the paper was reporting that 80 per cent of the budget this year will go to buying and maintaining Hummers. Don’t sue me, but I think the report is looking at the two halves of spending that the government does, recurrent and development. Recurrent are the expenses paid over and over, including wages and fuel for Hummers. Development is, well, development.

Not satisfied, I probed a little more and  came across a document Kenyans should see. It is called Quarterly Economic and Budgetary Review; the most recent covers the last quarter of 2007 (You can find it at http://www.treasury.go.ke). It tells you what the government spent your salary on. In general, the government spends very little money on development. The bulk of the resources of this country go to debt payments and government expenses. That is why it is so nonsensical to create a government of 42 ministries, complete with 50 assistant ministers and of course 42 permanent secretaries. It’s flushing money down the chute, just to keep Moi-era politicians happy and away from the throats of poor villagers.

The books of the government for the last quarter of 2007, that is June to December, were actually not bad, I hate to admit. Sh167 billion went to recurrent expenses against only Sh64 billion for development. But this is generally good given that the previous year expenditure on development was just about half of that.

Secondly, the government has either become a little more frugal, or ministries are asking for more money than they have use for. In general, during that quarter the government spent Sh21.9 billion less than it expected, which is a good and bad thing depending on what was supposed to be done and wasn’t.

THE RECURRENT EXPENSES ACCOUNT was underspent by Sh52.5 billion, which is very good, assuming that this was a saving rather than things not getting done. The development account was overspent by Sh30.5 billion, which is a good thing, provided all that money went to development. Problem is, I don’t know that it was. The ministry of Finance alone overspent its development budget by Sh36 billion, and until I know what the money was spent on, it is impossible to render judgment. Given that only Sh64 billion was spent on development in that quarter, half of it was absorbed by the ministry’s overexpenditure, which is mighty suspicious.

Two important things: The government owes Sh836.4 billion, half of it to foreigners. Foreign debt service for the quarter in question was close to Sh9 billion.

Another thing is that the entire recurrent budget does not go to juggernauts; in that quarter, Sh10 billion was directed to uses that the government claims are intended to fight poverty which, I guess, is a good thing.

I suggest that we all watch this government like a hawk. It must spend money with care, and it must identify the priorities that have direct effect on our lives. Wherever I talk to people, the message I get is that the country will go back to the days of big deals and big looting. We need to keep an eye on this


About SG

Secretary general of Chama Cha Mwananchi. This blog www.chamachamwananchi.wordpress.com, is based in Sweden.


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