Appropriation Bill goes under the radar amid street protests

Protestors during protests against the Finance Bill 2024 Kisumu, June 20, 2024. [Michael Mute, Standard]

The 2010 Constitution changed the national budgeting process.

Previously, it was purely an Executive business with revenues and expenditures decided at the State House.

It was secretive, and the contents of the National Budget were only revealed on Budget Day with lots of fanfare. Add the price control regime and we all waited with bated breath. Some hoarded essential goods in anticipation of a price hike.  

If we had betting then, many would have burnt their fingers guessing which prices would go up or down.

Many Kenyans may take the market economy for granted because they never lived under price controls, when the State controlled the prices of almost everything, including sugar, beer, and cigarettes.

Price controls make political but not economic sense. They lead to shortages and stifle growth. Who wants to expand their business if profits are curtailed?

We do not get into business because of our love for the customer, it’s love for their money - profits. With the 2010 Constitution, the people’s reps - MPs - got involved in budgeting. In addition, the voters are drawn through public participation.

That is why budgeting has become contentious. There are more parties involved and entrenched in the law or constitution.  

Public participation is enshrined in the Constitution, but voters seem to take it for granted. They feel no one takes their views seriously.

The introduction of public participation was ingenious - to tap the collective intelligence, ingenuity and creativity. It also moderates the MPs and senators.

Have recent changes in the Finance Bill made Kenyans realise their views matter? Will public participation now increase?  

To share in budgeting, we spawned the Appropriation Bill, Finance Bill and Public Finance Management Act. This was to institutionalise the shared responsibility in budgeting. 

Curiously, we seem to focus too much on the Finance Bill. We forget that you need the Appropriation Bill, which runs concurrently with the Finance Bill. All the bills become Acts when assented to by the President. Who says the president has no power? 

What does each bill do? The Appropriation Bill focuses on the expenditure.

The Constitution says in chapter 12: “When the estimates of national government expenditure, and the estimates of expenditure for the Judiciary and Parliament have been approved by the National Assembly, they shall be included in an Appropriation Bill, which shall be introduced into the National Assembly to authorise the withdrawal from the Consolidated Fund of the money needed for the expenditure, and for the appropriation of that money for the purposes mentioned in the Bill.” 

One wonders why the response to such an important Bill is so muted.  Does it mean we do not care how our money is used? 

The Finance Bill focuses on how government revenues are raised mostly through taxation. Everyone feels it. That’s why it’s so hot and contentious.  

The Public Finance Management Act (2012) is the guideline on how to prudently manage public finance at both national and county levels. What are the penalties for failing to comply with the provisions of this Act? 

It’s instructive to note that the same chapter says “the burdens and benefits of the use of resources and public borrowing shall be shared equitably between present and future generations.” Is this followed? 

Let’s go beyond the bills. The two bills should be looked at simultaneously. We are celebrating the dropping of some contentious clauses, which means less tax revenues. But we still want government services and more government jobs! 

With fewer taxes, the government’s alternative is borrowing. The same taxpayers will pay the debt. Whichever direction you look, we have to finance the government. Didn’t we vote for it? 

The other alternative is to reduce expenditure and live within our means. That would mean merging departments and government-owned firms, using more technology and having a lean government.

That would mean losing jobs. No political leader wants to hear that unless they are retiring. Government jobs are also protected, permanent and pensionable. 

The low-lying fruit is fighting corruption. That needs political will more than anything else. How can we do that when the mantra ‘’ It’s our time to eat’’ still exists? What about raising money through privatisation of State-owned enterprises? The late President Kibaki did that. What next? 

The Finance Bill will pass with amendments that excited us. But be sure more financing proposals will keep coming. Most likely through levies which are less contentious.

Borrowing will not stop.  We shall keep running the government with deficits till 2027 and beyond. Let’s accept the fact that the Finance Bill will remain contentious, more so after voters have tasted economic blood. The silver lining is making our economy conducive to growth, we hit the magical 10 per cent growth envisaged in Vision 2030.

We must let the invisible hand of the market do its work guided by the visible hand of the government, only when necessary.