Shame of leaders who ask for more after ‘eating’ our children’s future

Nurses and clinical officers stage a demonstration in Mombasa Mombasa County on Tuesday 14th September 2021, during their strike following the failure of Mombasa County Government to pay them two months Salaries. [Kelvin Karani, Standard]

There are things that should never make headlines in the same week in a functional society and a democracy for that matter. Yet, this has become the norm and standard in this country. Let us follow this:

•Health workers down their tools in Mombasa County to protest non-payment of salaries for months (it doesn’t matter that we are in the midst of a deadly pandemic);

• County bosses have resolved to shut down county services due to non-remission of funds by the National Treasury;

• The Controller of Budget reveals to a parliamentary committee that the National Treasury committed illegalities by borrowing to pay maturing loan obligations and to disburse delayed equitable revenue share to county governments;

• Treasury is seeking a loan from the International Monetary Fund to pay maturing obligations to Chinese lenders;

• CBK Governor Patrick Njoroge says they were not involved in negotiations for the Standard Gauge Railway loans, and the Chinese debt is a threat to the country’s debt sustainability;

• A Bill drafted by the County Assemblies Forum proposes to award hefty lifetime retirement packages for retiring governors, their deputies, speakers and ward representatives.

While one may have been tempted to imagine that this is another gaffe by county legislators who have made a name for themselves by legislating on absurdities, reputable county bosses publicly rationalised why they deserved this package.

In their assessment, retiring senior county officials must never be allowed to live a life of squalor upon the expiry of their terms in office. It would also stop them from being tempted to steal while in office, and help them concentrate on their jobs of serving wananchi. Besides, all other senior political officers at the national level have similar packages. So the story goes on and on!

In the midst of this maze, serious questions arise: One, what burden does such a proposition impose on taxpayers both in the medium and long term? Two, how does a leader who is unable to pay his subordinates (majority offering critical essential services) their basic salary demand such a generous package from the very same empty coffers? Three, what performance metrics have been used to justify why the electorates must forever be beholden to their retiring county bosses? Four, how can such a burdensome retirement package be a deterrent to corruption within their jurisdiction when they have presided over massive plunder of public resources in the first place?

Five, why only the elected officers and not the appointed officials like the county executive committee members and chief officers who are also on similar contracts? Six, if they truly are desirous of such a pension, why not adopt contributory schemes like the rest of us? Seven, why should anybody trust these leaders to manage and oversight billions of shillings in devolved funds if they cannot plan and manage their individual retirements? If such insensitivity and demonstrable ignorance is not witchcraft, what else could it be? Just what did we do wrong to our maker to beget us such a crop of leaders?

Path to recovery

Numbers never lie. The employment and wage bill burden in the Economic Survey 2021 does not give any iota of hope that the country can sort out the economic mess we are in by perpetuating the mediocrity we are accustomed to. Difficult, bold and selfless choices will have to be made to reset the economy into a recovery path.

According to the economic survey, debt service alone in 2021/2022 is expected to blow Sh713 billion of the projected tax revenue of Sh1.67 trillion or ordinary revenues projected at Sh1.89 trillion. This translates to a ratio of 42.7 and 37.7 per cents respectively. Debt obligation is the first charge on government expenditure programmes. This means maturing debt must be paid before anything else. At the county level, employee compensation accounts for Sh170 billion, translating to over 36.5 per cent of the total expenditure in the 47 counties.

In the period between 2016-2020, the wage bill grew by 37.8 per cent (Sh503,501 million to Sh694,055 million) against a 31.5 per cent growth in ordinary revenues. This excludes the pension burden estimated to currently average over Sh90 billion annually. Interest on loans grew by 96.3 per cent (from Sh233,710 million to Sh458,740 million) between the fiscal years 2016/17 and 2020/21.  In macroeconomics, the only option to manage unsustainable debt levels is either to pay them out or grow the economy.

This may have been one of the key motivations of rebasing the economy to Sh10.75 trillion. It must also not escape the critical eye that the bulk of the economy, estimated at over 83 per cent, is in the informal sector. It is a lot easier to tweak the numbers there as opposed to the modern side of the economy where numbers can easily be verified independently. 

In economic analysis, we also try to understand the environment in which the data we consume for analytics is collected. The reason we take this into context is to be sure the evidence we adduce is as a result of the hard numbers and not a problem of the data itself. While we are bound by the official statistics, we cannot fail to wonder why the statistics were delayed by several months. We cannot ignore the rumoured turf wars behind the scenes of crunching the numbers into palatable numbers or to reflect the legacy story.

Simply put, as the digital generation would say, ‘kwa ground’ things will be worse than the official statistics will have you believe. Never mind the big multilateral agencies mentioned to have been involved in compiling the statistics. Under geo-economic diplomacy, multilateral agencies will never contradict official national statistics.

It is with the background of these realities that one wonders on the source of wisdom that county bosses use to propose such hefty retirement perks for themselves? For some strange reason, our elected officials seem to believe that there exists a limitless hole from which government finances flow from. They seem devoid of the economic fundamentals that govern public policy choices across the world.

If we are to stretch our imagination further into the future, say to 2042, how many retired governors, deputy governors, speakers and MCAs will be on the payroll attached to public coffers? The bill covers a lifetime package for themselves and their beneficiaries. They will also be provided with a public-maintained state-of-the-art vehicle, drivers, personal assistants and household staff. Just how much would this translate into in hard numbers?

The Constitution provides for the need to assure inter-generational equity in public expenditure programmes. That would explain why borrowing is specifically restricted to development expenditures. Reflecting over the past 10 years of devolution, there is no demonstrable evidence that counties have made significant impact to stimulate local economies. Otherwise, this should be reflected in the individual county gross products, county own source revenues, national revenues and the distribution of formal employment statistics.

If we are to ever contemplate such a package, let us peg such demands on hard evidence of economic performance on the part of elected officials. In other jurisdictions like in the US and South Africa–where our devolved governance structure is heavily borrowed from–a governor’s performance is judged first and foremost based on the state or province gross product. When local officials seek national office, they prove their worth to manage the national economy based on their performance at the devolved level.

As a concluding thought, why should our children and grandchildren be forced to bear the burden of men and women who ‘ate’ their future in the first place? We have borrowed heavily, looted the funds and now we want them to pay for the comforts of ‘waheshimiwa’ and their families in their sunset days? What else is cannibalism, if this is not it?

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