Parliament must look at State's plans first, then budgets follow

Senate in session. [Elvis Ogina, Standard]

After a recess of noisy fieldwork, our high-maintenance parliamentarians resume duty this week. Before we got the Constituency Development Fund (CDF), parliamentary work was an exciting mix of representation, oversight, legislation and evaluation (ROLE). Debate in the House was important civic education for young Kenyans. We learnt how not to “substantiate the obvious”.

It’s different today looking at recent bipartisan efforts by MPs to lay down their colourful beachwear at a cushy Coastal retreat until CDF funds were provided by Treasury.

Yes, CDF has apparently had an impact in areas such as school bursaries, but it is striking that nobody wants to consider the irony that every CDF activity is a response to wider institutional failure (in the case of bursaries, the Ministry of Education). The result of this is that taxpayers end up covering the cost of the failure and its apparent remedy.  And that’s before we get into the larger question of CDF’s constitutionality when we already have a brand new cost centre called counties. When I argue that we lack a coherent theory of government, this is exactly what I mean.

Kenya Kwanza are the guys in charge, and it seems that they prefer our existing “un-theory of government”. Their first test was the 2022/23 budget they inherited.  The inauguration promise was simple – cut recurrent spending by Sh300 billion in the supplementary budget estimates. The first data we got was a Sh31 billion rise in total spending in which mainly foreign-financed development fell by Sh80 billion, counties got Sh30 billion in conditional allocations and recurrent spending was actually up by Sh81 billion. That was the draft Budget Policy Statement (BPS).

Then the actual supplementary estimates were published. The total cut is roughly Sh13 billion, split between a development slash of Sh106 billion (including Sh66 billion in net foreign financing) and a recurrent rise of Sh93 billion. And even at macro-level, the detail is more devilish. 

On development, there are increases for early learning and basic education of Sh8 billion (CBC/JSS anyone?), crop development at Sh21 billion (fertiliser?) and cooperatives at Sh19 billion (including Hustler Fund?). Energy, infrastructure, National Treasury and water, sanitation and irrigation will all experience cuts greater than Sh10 billion each.  

On recurrent, excluding seven billion in appropriations-in-aid, 34 budget votes get a total of Sh142 billion more than original, while 42 budget votes will get a total of Sh56 billion less.  

One of Parliament’s first work priorities will be an examination of this first supplementary budget for 2022/23 (supplementary 1). They should be as interested as we all are in the mirage otherwise referred to as a Sh300 billion recurrent spending cut.  They will be intrigued by the Sh44 billion net cost reduction that has happened between the BPS and publication of these supplementaries.

There might also be thoughts about the publicly-issued Cabinet dispatch in that intervening period which confirmed a Sh300 billion spending cut that is as close as it gets to an official fairy tale.

This might take the august House to an unusually emotional February 3 Treasury presser which accused the media of not understanding that “the economy is facing emergencies”, there are “expenditure carryovers” and it would have been worse if (follow the math), the deficit would have hit “more than 8 per cent of GDP” but now drops from “6.2 per cent of GDP to 5.7 per cent”. 

In simpler English, we announced a cost cut even though we knew that difficult stuff was happening. Or maybe, we actually knew things were happening, but we still promised a cost cut.

So “the government’s intent to cut spending by Sh300 billion…is attained…will be sustained”!

This article’s first purpose is to kindly request – as Treasury offers - a more specific breakdown of this Sh300 billion spending cut, by programme (economic classification) and line item (purposive classification). Meanwhile, only strangers in Jerusalem were not aware of the “emergencies” – from persistent drought (where does our mitigation, adaptation and resilience money go?) to the education transition (why, when, how is this a national emergency?).

The reality is that supplementary 1 – admittedly done in Kenya Kwanza’s early days - does not offer an approach to creating orderly public spending, because it is unable to without a theory of government. The emerging truth is not that there is no Sh300 billion spending cut (a side issue if molehills are not mountains), but there might be an “unreality” to the promises we hear every day. 

This could be the Parliamentary debate we used to have before rubber stamps were invented.

On that point, I am still looking for the 5,000 government services of which the latest news is that 1,200 have been digitized, from around 300 claimed a month ago. E-citizen still has less than 50. 

There is another task that we might get Parliament to look at. Not the one you are thinking about, although Parliament might also want to take a keen interest into the ways in which Sh50 billion in additional revenue will be raised in 2022/23 according to the draft BPS, especially when only Sh11 billion is taxes.  What’s the secret sauce behind the Sh39 billion in “other income” to be made?

The task I have in mind is one that relates to our economic plan. I have never understood how Parliament approves budgets without considering their underlying plans. What they do amounts to counting without context. Asking our “CDF-driven” MPs to consider plans and performance indicators might be the equivalent of asking fish to walk on land, but we need to start somewhere.

What I have in mind is some sort of Cabinet-approved policy/strategy paper that Parliament considers every five years as the ruling party’s agenda for its term. With some participatory scope for amendment, this paper would provide a useful accountability baseline to test annual budgets.

What might this look like? Luckily the untidy Treasury presser we read has introduced us to Kenya Kwanza’s five-year economic jingle: Bottom-Up Economic Transformation Agenda (BETA). It’s probably pronounced as both “Bee-ta” (next step after Alpha) and “Be-ta” (as in “better”). 

It sounds like the successor to “Big Four” so everything henceforth is all about being BETA. As Treasury acknowledges in the BPS, this five-year agenda represents the next leg of Kenya’s Vision 2030 developmental journey. It is very likely that, as we speak, BETA is being panel-beaten into the fourth medium-term plan (MTP IV) of Vision 2030 that began to be crafted before the election after an initial planning phase across our 25 planning sectors (although we have 10 budget sectors).

We still haven’t seen what the detail in BETA in MTP IV looks like, but here’s what Parliament does in our US-style system where each arm of government is truly independent. They search for clues in supplementary 1 to see whether there is planning behind the budgetary adjustments.  Then, as they proceed to also review the BPS (which they must also approve), they consider whether its outline of the economic policy agenda reflects what BETA in MTP IV might actually represent.

There is, of course, a sequencing point here: policy-plan-budget-spend.  But we don’t respect it.

It doesn’t mean we don’t get to the point one day where Parliament signs off on the plan, then the budget. To repeat, this is the first of our four basic PFM rules: there is no budget without a plan.

If we got planning discussions into Parliament then this could get very interesting.  Imagine the Senate considering County Integrated Development Plans (CIDPs) in a holistic sense before summoning governors who have already subjected these CIDPs to their county assemblies. 

Did you notice that? Counties must get their plans approved first, then their budgets but this is a task beyond our national executive and legislature? To repeat, it is almost as if there is a working practice to ring fence national government from the greater demands that counties must address.

We could get ambitious here. A single joint parliamentary session at the beginning of every term. The National Assembly has considered the national agenda (BETA in MTP IV). The Senate has considered the collective county agenda (CIDPs) working with county assemblies. The joint session puts it all together into a Kenyan plan to be subjected to oversight, supported by legislation and compressed into local priorities, including CDF and other affirmative action enterprises.

OK, it’s good to dream. “Out of the box” in Kenya means “outside the (rules) box” in practice.

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