Ouko calls for review of budget process

Auditor General Edward Ouko has called for a review of the entire process in light of a rejuvenated clamour for constitutional change. (Standard)
The corruption being witnessed in the country is as a result of a poor budget-making process that has seen looted billions being disguised as genuine allocations, the Auditor General has said.

Speaking yesterday during the launch of a report dubbed State Capture, Inside Kenya’s Inability to Fight Corruption by Africa Centre for Open Governance (Africog), Auditor General Edward Ouko said the budget-making process has been completely abused. 

Mr Ouko said the process is now equivalent to the phenomena of State capture, where corrupt individuals have identified loopholes within its fabric and use them to loot.

He called for a review of the entire process in light of a rejuvenated clamour for constitutional change. 

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“From where I sit, I would bring in the theory of budgeted corruption,” said Ouko.

“Is our budget actually loaded with corruption? It fits the theory of a highway which has many exit lanes, and corrupt individuals know how to manipulate these exit lanes,” he said.

He recommended that a lifestyle audit and asset recovery system that would expand Government tax revenue be put in place. Ouko said such changes might even see Kenya repay its debts in three years.

The Auditor General said that the 2010 Constitution intended to remove the entire budget making process from the National Treasury.

It aimed to achieve this through the creation of independent institutions such as The Commission for Revenue Allocation (CRA) and Controller of Budget (CoB), in order to ensure checks and balances in the system.

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While faulting the CoB, Ouko said the body was a weak link in the budget-making process. This is because it has failed to control the process and as a result public money has been lost. 

CoB ineffective 

“Kenyans were clear that proper control of the ‘national cake’ is imperative. That has not been achieved yet,” he said.

“Right now I wouldn’t say CoB is doing a good job in giving us more statistical accountability. That’s a major thing we have to revisit even for those who are clamoring for a constitutional review.”

He also said that the Integrated Financial Management System (Ifmis) was doing a poor job. He recommended that there should be two systems; one for counties, and another for the National Government.

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At the same time, Economist David Ndii cited the hyped Government Huduma Namba registration as a form of State capture, where data collected could be commercialised.

He said that a recently launched credit scheme by a collection of powerful banks targeting Small and Medium Enterprises (SMEs) was pegged around the Huduma Namba.

Dr Ndii alleged that the Government, under instructions from powerful politicians with massive business interests, had blocked the initial implementation of a bio-metric Identity Card since it could not be commercialised.

He averred that we were now in an era where big data is the new “gold” having moved from land and capital.

“If you look at some of the data that is being collected at the Huduma Numba registration, you will realize that it is exactly what is needed to start something in finance called credit scoring,” warned Ndii.

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State capture

Africog Executive Director Gladwell Otieno said that State capture had weakened most institutions.

“This is all part of the deprivations of state capture. You destroy institutions that hold the State into account, and build a shadow government which protects the interests of a few,” said Ms Otieno.

Also among the speakers was Anglo Leasing graft scandal whistle-blower John Githongo, who said that the era of making anti-corruption reforms in the country is over, arguing that the country has seen many such reforms. 

“The idea that we can reform our laws to fight corruption has been surpassed by events. We should accept that corruption is now a political problem and its time leaders were held into account,” Mr Githongo said.

According to the report authored by constitutional lawyer Wachira Maina, fighting corruption has become difficult because of an evil pact between graft and politics.

It argues that big Government projects are avenues for State capture. It further notes that the mechanics of state capture include compromising the electoral body and undermining law enforcement such as police, anti-corruption commissions and the Judiciary.

Corruption scandals 

The report adds that the State capture phenomena helps to understand why major corruption scandals never get resolved.

“Why do the emblematic corruption cases – Goldenberg, Anglo-Leasing or the Euro Bond scandal, never get solved even though they never really die? This is because they are not meant to be solved: to resolve them would undo the “implicit transition bargain’ of Kenyan politics that successors will not harm the interests of their predecessors,” reads the report.

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Auditor GeneralAfricogEdward OukoCommission for Revenue AllocationController of Budget