Make economic sense or mortgage the new law

By Charles Kanjama
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Of course Kenya’s public sector wage bill is too high. And of course our new Constitution is partly to blame. Obviously also, the 2008 coalition government’s hiring spree which doubled public sector wages is a big culprit. And the general greed and wastage in government. And the unhealthy splurge on allowances for full-time employees. And the “I’m special” mentality of several state organs and constitutional commissions. Also to blame is the money grab by each of the three arms of government. So naturally we need to do something about it. But I’m not sure the Salaries and Remuneration Commission has the moral authority to lead the campaign, since their leadership seems as thirsty for public largesse as the rest. Neither do I think restructuring Government by rolling back devolution and organising a Sh10 billion referendum with another Sh20 billion wasted on campaigns and civic ‘mis-education’ is the way to go.  I’ll be honest and state this. In the midst of the 2010 pre-referendum campaign, several persons approached me to ask: “Can Kenya honestly afford the cost of the proposed Constitution?” I had studied the Constitution back to back, but never felt happy giving a straight answer to that particular question.

It was clear that several provisions under the new Constitution would escalate substantially the cost of governance in post-2010 Kenya. Affirmative action of thousands of nominated Members of County Assemblies plus elected MCAs, 349 MPs and 67 Senators, was costly. 47 counties, as opposed to the proposed 14 regions of the Bomas Draft, would be costly. Implementing other nice proposals would be costly. Devolving and retaining functions under split governance would be costly. Some costs that I predicted we’ll incur are still lying in wait, probably because we have cleverly colluded to slow them down. Like replacing our national currency with currency that does not display portraits (Art 231(4)). Or translating all legal documents into Kiswahili (Art 7(2)). Or ensuring 10  per cent tree cover of the land area in Kenya (Art 69(1b)). And so on. Yet depending on how we implement the Constitution, these new costs can bear potentially different character, either capital investment that triggers economic growth and reduces income inequality, or revenue consumption that increases poverty for the down-trodden.

So I was always ambivalent when asked to predict whether Kenya would afford its new Constitution. I always said, if we really value the costly things we’ve prescribed for ourselves, we’ll just have to look for the resources to pay for them. And be clever how we implement those prescriptions to avoid the expenses running out of hand. And be astute in ensuring the prescriptions add value to our lives and improve our economic wellbeing and not merely become a burden on the wider society. I still stand by those remarks. So I am not impressed by the overwrought proposals to again restructure our basic governance structure, as if we’ve only just discovered that our constitutional values like public participation, inclusiveness and equity will bear a cost. Neither am I impressed by the singular obsession with cutting costs for bottom-line performance, as if you can have prosperity without equal focus on growing revenue and top-line growth.

I’m a big enemy of massive public sector wage bill, and of public pay that outstrips private sector pay. But neither do I support cutting down public sector wages, which at least induce economic growth, only to replace them with large wasteful projects. The latter mainly cause transfer of wealth to a few hands, and transfer of capital from local to foreign owners. A proper economic balance must thus be struck to avoid inflation-inducing escalation of wages, as well as the even-worse deflation-inducing chopping of incomes.

The focus must be on fiscal prudence and efficient workforce, both in the public and the private sectors. For the public sector, we should work to halve our public wages proportion of GDP from 13 per cent to seven per cent. Yes, we must lay-off non-performing workers, improve service-delivery and freeze or reduce wages of the highly-paid public employees. But the first quick win is cutting down allowances for better paid workers, and adopting consolidated remuneration system. Also we should develop incentive pay approaches that encourage workers to be frugal, resourceful and creative in use of public resources.

There must equally be targets on fighting corruption, reducing wastage of public money, and incurring capital expenditure only in viable and efficient fprojects. If we cannot implement sound economic policies, then we’ll have to mortgage our new Constitution just to survive.