Special report: It’s time for deep conversation on devolution

Senate banners during the 7th Devolution Conference in Makueni, November 2021. [Boniface Okendo, Standard]

Kenya is an interesting country. Consider this. There is a Political Parties (Amendment) Bill that has been passed by one House of Parliament (the National Assembly) and is now sitting at the second House (Senate) which, among other things, empowers the Office of the Registrar of Political Parties (ORPP) on political party oversight to the chagrin of the Independent Electoral and Boundaries Commission (IEBC).

This is the same IEBC that essentially faces an existential threat if we go by the Building Bridges Initiative (BBI) judgements made by the High Court, and still does not have a CEO.

The same IEBC that this week confirmed that elections will be held on August 9 and then proceeded to lay out in a gazette notice rules and regulations for political parties and politicians. Take the presidential election, parties must submit their party lists (members) and candidate lists (potential candidates) in early April. Party primaries to select the party candidate should happen towards the end of April, with nominations forwarded to IEBC towards the end of May. The official campaign period will run from May 29 to August 6. 

Please align these rules and dates with what you see on the ground. Every presidential candidate is announcing their candidature, but in reality they are basically nominating themselves without bothering with primaries; and no, dear lawyers, no legalistic jargon, please, substance is greater than form!. Unless we must also take it that when we see potential candidates rolling around the country making all manner of promises, these are not official campaigns, but field visits.

How different would the official campaign look? Selling the manifesto, you say, but that is already happening! How many of your potential voters will actually read a written manifesto that is anything longer than the sum total of the political and sports pages in your daily newspaper? And how many have not already decided, but don’t know who to choose? Forget philosophy or welfare economics, Kenya’s politics is the ultimate manifestation of the “non-ideal theory” or “theory of second best”.

And this why those other positions that this column covered a fortnight ago really matter, from MCA at the top all the way down to Senator.  But these are just people.  In the new conversation that our politicians claim, there is little mention of devolution; other than thoughts of reviving BBI to throw more money at counties.  The irony here is that one of the nine points that formed the 2018 handshake and birthed BBI was the notion that counties were not politically inclusive or economically sustainable.

It is disturbing that we are not having a larger conversation about devolution right now.  Granted, there are smaller ones across our media, on frightening audit reports, governors’ demands for more cash, fruits of devolution in areas such as healthcare, roads, water and sanitation, among other discussions. 

But it is tricky to get a single conversation on devolution (which is why the Senate in the middle confuses us about why it exists). In reality, this should be about 48 conversations, but let us keep it simple. Devolution works best when the national government gets and supports it, and county governments get and deliver it. So the first conversation we might be having is which of the prospective future national leadership do we expect to better get and support it, before we go local to our county choices.

Let us look at some big stuff. Since money is what we love most, we will use the “tyranny of financial numbers” in today’s conversation. Between 2013/14 (Jubilee’s first full fiscal year) and 2021/22 (Jubilee’s current, final fiscal year, even though they are writing the 2022/23 budget for the incoming administration), total public expenditure will add up to roughly Sh20 trillion, of which a little over Sh2.5 trillion goes to counties, leaving aside conditional allocations and medical equipment scheme gimmicks. 

We might ask a few questions here, the obvious one being what counties have done with that cash in nine years.  Or if we can see Sh600 billion of that amount that went to development across the 47 counties, which approximates to Sh1.5 billion a year per county.  One of the answers might be that these are budget numbers, and cash has not actually flowed.  This is partly true, but we must also remember that counties are not homogenous, so you will still see more development in some than in others.  Leadership, anyone?

Naturally, you will ask about the other Sh17.5 trillion remaining at national level. In broad aggregates, that is Sh3.5 trillion on payroll, Sh4 trillion on procurement deals, sorry, service delivery, Sh3 trillion on debt interest and Sh5 trillion on development.  The remaining Sh2.5 trillion is - excluding that debt interest - monies spent on stuff like salaries for the top executive honchos and all judges plus pensions, including those for our presidential candidates who are currently out of work (all of them) and debt principal repayments. You probably have more questions now.

Keeping it simple and generous, revenue collections will hit Sh13.5 trillion by June 2022, and the shortfall against Sh20 trillion in spending equals the growth in our public debt. Only two real questions are needed. The first might be how productive national government spending is. The second might be what Sh5 trillion in national development has purchased, in comparison to Sh600 billion by counties.  Remember, national and country development happens in the same geographical space called Kenya.

By now you are probably beginning to see that devolution is not a subset of Kenya, it is Kenya. It has a national part that is supposed to support it, and a county part that is expected to deliver it. Here are some more numbers to ponder. This time we will run with eight years – based on available data - from 2013/14 to 2020/21 (the year that ended last June) and examine three functions; devolved health and agriculture, and transport (infrastructure) as a concurrent or shared function. 

On transport, cumulative total spending was Sh2.2 trillion, of which 90 per cent (Sh2 trillion) was national government spending. That is less than payroll or debt interest at national level. Where are the projects? Where did the other Sh3 trillion in national development go?

It gets more interesting with the devolved functions. In health, total county spending was Sh600 billion against Sh540 billion at national level. Is it just because of those “Level Z” hospitals, or is there more? In agriculture, total national spending was Sh420 billion (is this on account of parastatals?) against Sh121 billion for all 47 counties in 80 years (that is, Sh300 million per county per year on average). Are questions still flowing? Remember, national as support frameworks, counties as delivery units. It is a picture worth interrogating, which this column will leave to readers.

There is of course the “between and within county” aspect since we have so far focused the numbers on counties as a whole. Because counties are not all the same, as said before, and there is no space here to go county by county, let us pick up a couple of extreme conditions across counties (who shall remain unnamed for now).  We will use compliance requirements under the PFM Act for these illustrations.

First, development expenditure, which must be at least 30 per cent of the total budget. In the last financial year, everybody except Nairobi complied with the budget level, but only 21 of the 47 actually met the target in practice, with extremes from 13 to 47 per cent (yes, one county spent almost half of its budget on development). Next, the wage bill, which must not exceed 35 per cent of total revenue. Well, only 13 out of 47 complied with this legal requirement, with extremes from 17 to 57 per cent (yes, one county spent almost half of its budget on payroll).  There is difference all over the place, and it is not pretty. 

We will not get into the Sh100 billion plus in pending bills across counties because national government is probably running pending bills of Sh400 billion (think unpaid infrastructure, plus parastatals).  But here is a final data set on the county collective. In the eight year period between 2013/14 and 2020/21, cumulative own source (internal) revenue budgets totaled Sh 468 billion (in other words, not enough for healthcare if counties were left to their own devices). Actual collections were roughly half of that at Sh266 billion.  Yet one tax gap study suggests counties could raise up to Sh 173 billion a year at the top end.

Now, throw all of this money into the mixer, process the numbers into more words and translate back to what a post-2022 devolution agenda might look like at national and county level.  Watch this space.

Continues tomorrow.