Yawning deficit in budget will lead to heavy borrowing

Henry Munene

Treasury Cabinet Secretary Henry Rotich on Wednesday presented in Parliament what experts have termed a very ambitious budget for 2016/2017.

And while I am obviously not an expert, I feel impelled to comment on the matter, for three main reasons.

One, the budget affects us all, expert or otherwise. Secondly, and contrary to popular opinion, some aspects of the budget are so basic they call for common sense to fathom.

Lastly, and most importantly, the Government has over the years taken away a lot of cash from me. It has taken away so much that, if I were to get it all back, I’d at last find the courage to tell my landlord what I think about him. Then, thus done with the landlord and his monthly how-are-you-doing calls, I’d  probably spend the rest of my days escorting the sun. I’d luxuriously lounge on a traditional stool and follow its journey from the time it thaws the snow on the peak Mt Kenya, to the time it dips behind Kiambere hills in a majestic golden orb to usher the spellbinding African twilight.

Yet here I am, in the vortex of Nairobi’s rat race, but its alright.  Now, the most conspicuous thing about the budget is the deficit, or hole, or gap, or whatever you choose to call it.

Mr Rotich plans to spend Sh2.2 trillion but can only raise Sh1.4 trillion. This is more like earning Sh20,000 a month and still planning to import a Vitz within a year.

And we can’t even be too sure about the Sh1.4 trillion revenue target. The Kenya Revenue Authority has lately been missing its targets, mostly because businesses have been laying off taxpaying staff and shifting to other friendlier parts of the world.

Just this week, I edited the story of a company that is shifting its tyre-making business to India. I also edited a caption for a picture of flower farm workers protesting after the firm they worked for went bust and there were no signs they’d be paid.

Friends, in my layman’s understanding, heavy internal borrowing by the State means private businesses cannot get money for expansion. They can’t get loans to expand because banks prefer to lend to the Government, especially now when most businesses and individuals are said to have gone underground with unpaid loans and probably changed their phone numbers. Heavy State borrowing also means I cannot afford a loan to buy a small plot in Runyenjes.

The horror of it all is compounded by how the Government spends my money. More than half of the cash goes to recurrent, unproductive expenditure. This includes potted flowers for offices where sometimes coats spend more time on chairs than their owners. Again, perhaps only a good witchdoctor can estimate the productivity of the bloated, billions-guzzling public service.

Then the tenderprenuers. On the same day Rotich was crunching figures, an audit report revealed the National Youth Service may have lost Sh1.8 billion, and not the much-bandied about Sh791million. Now, bless me, I am a patient man with but one fragile heart. If it turns out that we are borrowing billions for tenderprenuers to steal in an election year, I’m damn sure going to suffer one helluva heartbreak.

The trouble is that tenderprenuers, awash with hardly-earned cash, splurge it all around, vomiting all over our shoes and creating more impetus among admirers to steal.

They import everything and shop abroad, making nonsense of Rotich’s incentives to spur production and protect local firms.

So, much as we cannot resist the urge to fulfil election pledges, we must not stake everything into future growth. We need to rethink trying to fulfill all pledges at the same time! If you take a few key promises and fully deliver them, all you need is to fire the grossly ineffective Jubilee communication machine and get people who can convince us that the remaining projects is why you need another term!