Pending bills: How counties destroy our rural economies

Rangwe MP Lilian Gogo and the Lake Basin Development Authority (LBDA) chairman Odoyo Owidi (Gogo’s left) speak during a fundraiser at Orero Boys Secondary school in Rangwe constituency. Dr Gogo wants the age of criminal culpability increased from the current age of eight years to 14 years. [James Omoro]

When Kenyans chose devolution to ensure the national cake is distributed closer to them and by their own sons and daughters, they did not foresee the monster of corruption.

Today, the monster is mopping up the little money Kenyans have in guise of getting lucrative county government tenders.

Immediately after 2013, some Kenyans rushed to register companies, resurrected moribund ones, borrowed money, sold property, to raise money to do the seemingly lucrative businesses with the county governments. Theoretically, we believed the new SMEs so registered or resuscitated would create jobs, wealth and spur economic growth. We were wrong because we did not take into consideration the true nature of the people we elected and their key staff nor their real intentions.

After inauguration, the county governments began by mopping up the little money circulating in the counties by awarding tenders in which citizens invested millions of shillings but never got paid. Ironically, the governors would point to projects they have implemented while the contractors were yet to be paid and may never be paid.

Now, the real taxpayer is too poor to help the national government collect the very taxes the county governments are waiting for, and even demanding more. The real employers – the SMEs - are now incapacitated as people who contribute nothing to the economy live large.

People who deal in nothing, produce nothing and provide no service other than influence and favours, are now controlling the economy of counties. These people who do not pay much of taxes are now controllers of wealth and power in counties. They even decide who gets business licence and who does not.

Interestingly, in many counties; the true value of the work done, services provided and goods supplied since devolution began is equal to or less than the amount owed to contractors, suppliers and service providers.

There are many businessmen who completed their contracts, delivered their supplies or provided their services but are yet to be recognised as debtors or included in pending bills and have no idea if they will ever be paid. In some counties, phony companies with similar names of the real contractors are paid yet the real contractors wait in vain.

By devolving governance, did we inadvertently devolve corruption, ineptitude, wastage and uncontrolled power? Many governors are on a wastage spree yet they generate no meaningful revenue.

On the other hand, the other elected leaders whose roles are very clear in the constitution and includes representation and oversight have remained mum as the very people they represent suffer in the hands of these governments. They are instead busy strategising how to take over the gravy train or remain in the good books of governors.

To rescue Kenya from its own rogue citizens, the national government must take deliberate steps to reign in the county governments and get them to account for - in good time - the funds they receive on behalf of citizens.

The government is the first loser when a business collapses or goes bankrupt. More taxes are collectable when businesses thrive, tax is collected during almost every transaction. When people are in debt they reduce their spending and begin to hold back stagnating cash flow which explains the current decrease in revenue. The solution is not to increase taxes or harass citizens and businessmen more, but rather release money into the hands of citizens. Clearing pending bills will improve the speed of circulation of money resulting in more revenue.

Meanwhile, Kenya needs a clear and enforceable law that prohibits county governments from paying new debts before old ones are cleared or entering into new contracts before the old ones are paid for. The greatest source of corruption money to county officials is during payment of bills, when a supplier’s money is withheld he becomes desperate and is ready to part with anything especially when loan interests are rising.

To save our economy, no county government should receive money for new projects before the pending bills are cleared. Otherwise even the Treasury may not collect enough taxes to fund them in future.

-The writer is the Lake Basin Development Authority Chairman.