Why CS ‘s austerity measures sound futile

Kenyans have become so much used to double-speak by their leaders. Early this month, Treasury acting Cabinet Secretary Ukur Yatani said the State would unveil a “brutal” austerity plan in the coming days for the 2020/2021 financial year.

It is, however, doubtful if the CS would follow through on his promise of budget rationalisation on non-core expenditure including foreign travel, hospitality and general supplies and use of Government vehicles.

Going by past practice, Treasury will send out circulars to ministries, departments and agencies that will be routinely ignored because no sanctions will be meted against those who ignore the directives or over-spend on the same item heads.

This will come as no surprise considering the CS promised the unveiling of the austerity plan while also revealing that the recurrent budget would be allowed to rise by Sh73 billion.

Development expenditure

Revelations that budget cuts are projected to fall only on development projects increase the perception that the State has dropped its much-hyped promise of growing the economy by 10 per cent. Yet, the reduction of the development expenditure would not have been necessary had Treasury worked with the taxman to meet its revenue targets.

Reports that the tax body is asking its parent ministry to increase its budget allocations so that it can collect the budget arrears amounting to Sh192 billion are disquieting because these funds should have been provided without much ado.

Perhaps the time has come for a fresh audit of the Kenya Revenue Authority (KRA) to determine what it requires to be able to discharge its mandate fully.

Treasury would then be required to provide the necessary funds so that KRA can meet its revenue targets as expected.

The need for this is underlined by the realisation that the country’s public debt is set to hit the Sh6 trillion mark by the end of the current financial year, from Sh5 trillion in June last year.

The rapid rise of the public debt also means Kenya should prioritise the financing of projects that yield immediate returns. It is hoped that the State and counties would, for example, put more money into reforms that would encourage the private sector to open its wallet wider.

Reports that counties are frustrating developers by taking ages to approve building plans and issue them with permits should end.

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