Anti-climax: BBI Report short of surprises

We waited for the Building Bridges Initiative (BBI) like a love letter. Well, it is here. What are its contents? Any surprises? Linking politics to economics in the opening statements was noticeable.

BBI continues a trend where our leaders are paying more attention to economics. That could be a sign of national maturity.

Bad politics, bad economics

We must quickly add that politics has influenced our economics for more than 30 years as indicated by BBI. Political events beyond elections have punctuated our economic growth since 1895 when the British declared Kenya a protectorate. The effects were not pronounced after independence. You can clearly see the effect of Tom Mboya and JM Kariuki’s demise on Kenya ‘s GDP growth rate.

Extending a handshake is not a rare occasion, as alluded by BBI. We have had enough occasions from Uhuru to multipartyism, dislodging Kanu from power in 2002 and the promulgation of a new Constitution in 2010. These are even better occasions - backed by law- The March 2018 “handshake” between President Uhuru Kenyatta and former Prime Minister Raila Odinga is yet to be entrenched in law. We closed those windows before seeing through them.

National problems and solutions are identified by BBI. But most are inward-looking. The external factors are left out. Kenya has external stakeholders whose influence are direct and indirect. From colonial hangovers to intersecting interests of newly emerging powers like China and the USA, we can’t deny external influence.

The problems are identified and solutions offered. But how practicable are the solutions? Why are we not comfortable with our African identity... starting with our names? The suggestion that we rewrite the history of Kenya is noble, but unless we import a resident historian, truth is likely to be sacrificed at the political alter. Objectivity has been dying a slow and painful death in Kenya. Where will that history start and end?

How do we deal with external media influence on our identity? We can replace Boxing Day, but can we stop Halloween and other influences? Why would teaching ethics make a difference? Do we not go to the church every Sunday and pray on all occasions? Why would teaching succeed where religion has failed? We used to teach that ethics in high school, but still, there was a leakage in that subject at KCSE.

Changing culture

It does not matter who takes ethics, EACC or NICC, what matters is the implementation. Where is the family in ethics which is more effective than EACC or NCIC? What of our traditional values that kept us for generations? Have we noted how honest Kenyan indigenous societies are? How comes Maasai never fight each other and they carry weapons all the time?

We want lower taxes to remain a competitive market. What will be the alternative source of revenue for government? Or will lower taxes spur economic growth and get us more tax revenue? Why is government borrowing not mentioned in the BBI report?

Resource allocation mapping

Basing service on population, not land mass seems to concur with recommendations from the Commission on Revenue Allocation (CRA) which gives population a large weight of 45 per cent. This could make some regions feel the controlling effect of large numbers. This will likely be contested by leaders from ASAL areas.

It is great for banks to lend to priority areas, but how shall we enforce that? Will government lend the money through its banks or private banks? How do we define a priority area? Financing is one of the many problems faced by businesses. What of innovation and quality which shuts us off from international markets?

How shall we increase savings rate to 25 per cent of GDP, when our debt is over 60 per cent of GDP? What incentives are there to save?

I love the idea of deepening and accelerating EAC integration. Where would we be if East African Community has not died, when going to study in Makerere or Dar es salaam was standard? How do we balance EAC against devolution that goes the other way?

We all know salaries gobble up over 80 per cent of the national revenue. They took about 46.5 per cent as per the Ndegwa commission of 1971. How shall we reduce that? Sackings? Outsourcing or which way? More jobs were “created“ by counties. How shall we reverse that? Which county is willing to reduce its work force? Which governor wants to lose his job that way?

Empowering young people is great. But tax holidays is not enough. Start with skills that will make them globally marketable like Indian computer scientists. Too few of our youngsters study STEM courses. Yet through stem, China, Korea and Japan have become world economic powerhouses and created jobs for their citizens.

Focus on sports as a route to better lives for the youth makes sense. But we need to go beyond sports to all talent areas from music to science or painting. Everyone is born with a talent, maturing is what matters. Where is the school for the gifted?

National lottery? I thought it was in Vision 2030. Betting firms moved in to fill a vacuum. The youth bet because they are idle and don’t understand how money is made.

Executive president

On politics, there was no surprise. The president retains his powers, BBI proposes a prime minister, as predicted by the media. The mixing of ministers from elected and technocrats is not surprisingly. Coming up with opposition was much anticipated. Retiring the archaic cabinet secretary and replacing it with cabinet minister makes sense.

As expected, constituencies will remain the same. The concept of proportional representation is not elaborated. What of nominated members? On attacking corruption, there is enough drama. Ndegwa commission was not about doing business with the government, it was about civil servants running own business. How shall this be enforced? What of use of proxies?

Give 5 per cent of proceeds recovered from corruption to whistleblowers? How can their security be guaranteed? What is public scrutiny in wealth declaration? A court order is needed lest our hard earned wealth be fodder for public gossip.

Making Kenya a 100 per cent e- nation is great, it will cut off lots of middle men. We have seen that from acquiring driving licences, passports and other documents. It is long overdue. Judiciary and media freedom ought to be protected. But why was Judiciary given so little airtime in the BBI report? Devolution has been retained with 47 counties- as expected. Voluntary economic blocks are to be encouraged.

The rumour on regional blocks with retiring governors taking over was just that. Increasing revenues to counties to at least 35 per cent of the last audited accounts will be celebrated but where will that money come from? Who will lose that money? The national government? Easily?

The finalization of sharing of functions between the two levels of the government is called for. Why is there so much emphasis on deputy governor? The call for a health commission will be welcome. Doctors and other medical service providers have never been at home in the payroll of the counties.

Wastage in counties

Waste in counties is noted and a need to shift more resources to development instead of recurrent. How, is left hanging. Demanding that governors finish old projects before the new ones should apply to all newly elected leaders. County assemblies like the National Assembly are called to oversee the county executives; will that reduce the perennial fight between the two bodies?

The economics of the counties are not left out. How will they grow the economic pie? Beyond better regulations and less bureaucracy, how do they get the markets for their entrepreneurs? How will they ensure immigrants, often better and more motivated entrepreneurs are welcome like in the Silicon Valley? Nairobi has led other counties economically because its welcoming, a home to all of us. Why not other counties?

BBI finally looks at reducing the size of the government. How, when counties remain the same? How do we ensure 70 per cent of the revenue goes to development? Will counties and National government retrench their workers to shift more resources to development? With e-citizen do we need all the workers, politics aside?

This section unlike others gives specific recommendations. Getting some ministers who are also MPs reduce their cost to taxpayers. It also makes ministerial appointments a carrot in campaigns. The Controller of Budget should be strenghtened in its oversight role. That is now news. The need to rationalize regulatory bodies is addressed. They should ensure a conducive business environment for all. Rationalization of government-owned enterprises has been mentioned before. What happened? Politics seem to always win over economics.

Vitz for Mercedes

Elimination of duplication of functions between two levels of government will end up in power games just as reducing “waste“ in assets such as cars. Will governments switch to Toyota Vitz and Mazda Demio? SRC has its work cut out. But we have seen it has enough enemies. BBI wants the Public Service trimmed through natural attrition and freeze of recruitment. This will likely be resisted. We still think the government is “hiding“ jobs. Finally, a controversial one, eliminating sitting allowance for public officers on salary. Does that include MCAs, MPs and senators?

The abridged report was short on surprises may be the complete report has some surprises. One wonders what the heat was all about. The report highlights the major national problems and suggests solutions. It seems to me it was a safety valve, short on specifics, more political than legal. A good starting point for a national debate, which I suspect will be low key.

Mr Iraki an economist, teaches at the University of Nairobi