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State priorities in sharp focus as Executive splurges on luxuries

President William Ruto's official car during the official opening of Bunge Towers, Nairobi, April 25, 2024. [Elvis Ogina, Standard]

In Prof Kithaka wa Mberia’s book, Kifo Kisimani, Mtemi Bokono is quoted saying ‘Leadership comes from God. My authority comes from above. It is God who has placed me on the throne of Butangi. He did that out of his will. He plans to see Butangi be led with wisdom and that is why I am its leader’.

There is even a song recited by Tanya, mother of the main character of the book that goes: Hekima yako Mtemi Bokono kamwe haina kifani (The wisdom of our ruler Bokono has no comparison).

For some reason, Prof Mberia’s book, that was first published in 2001, is now being seen as a premonition by some netizens who have referenced it to the current administration.

This is because of some of the decisions the Executive has made that appear to be against the interests of a majority of Kenyans but are argued, by officials, as necessary for the government to function.

A proposed allocation of almost Sh3 billion to renovate State House and the Office of the Deputy President and his residences has irked Kenyans who believe the country has more pressing issues than new vehicles or amenities for the presidency.

According to proposals now before Parliament, while the Office of Deputy President Rigathi Gachagua is seeking allocations of Sh1.12 billion for the refurbishment of his offices in Karen and Harambee House Annex, President William Ruto seeks to spend Sh1.558 billion to renovate State Houses and State Lodges.

A statement issued by the head of Deputy Presidential Communication Service Njeri Rugene doesn’t seem to offer the explanations Kenyans were seeking regarding the allocations to Gachagua’s office, but said the figures were misinterpreted.

“Which is a priority? You in a government house renovated at Sh300 million or a school feeding programme for children from poor backgrounds and mostly of parents adversely affected by the floods?” posed a netizen                                                                                                           

Another one chimed: “If the office has not collapsed, Sh300 million is way much more for renovations. For the vehicles, put the old ones on auction and only request for top-up amounts to buy new ones. otherwise, think about flooding and school children.”

But Rugene said the request for Sh300 million for office renovation of Harambee House Annex Office, Official Residence in Karen and Official Residence in Mombasa are vital because the facilities had been neglected for over 15 years affecting critical areas of habitability, safety and security.

The request for allocation of Sh100 million by the DP’s office for motor vehicles was attributed to an ageing fleet that has not been replaced for the last 10 years. The statement said it is costly to maintain the vehicles and compromises service delivery.  

“The misrepresentation of facts and figures negates objectivity. The facts are captured in the Hansard, which is a public document,” said Rugene.

Increased allocation

The justification for the increased allocation to the Office of the Deputy President has been pegged on his role which involves holding high-level meetings and travelling across the country monitoring government projects and programmes.  

“This results in increased expenditure on purchase, repair and maintenance of motor vehicles, fuel and hospitality,” reads the documents containing the requested amounts before Parliament.  

Rugene, while responding to questions about the purchase of motor vehicles and renovations, did not justify why money is also needed for medals and awards, which are part of the justifications included in the documents.  

“To facilitate the Office’s mandate as stipulated on the Executive Order No 2 of 2023 especially the role of the National and County Governments Advisory Committee which is required to identify persons for conferment of medals and awards by the President and operationalisation of the IBEC sub-committees as per the Act,” the documents read in part.  

These allocations neither paint a picture of a country fighting to break from the shackles of debt nor bring struggling Kenyans into the economic bracket as the Bottom Up Economic Transformation Agenda (BETA) suggests.  

This is even as data shows how a majority of Kenyans are struggling to make ends meet. 

ILAM Consumer Spending Index, a survey that tracks consumer spending which is a key reflection of how the economy is performing, found that towards the end of 2023, 55 per cent of retail businesses experienced a decline in sales. This while 44 per cent did note an increase partly because of increased prices.

This figure went up in the first quarter of 2024 when 62 per cent of retail businesses experienced a decline in sales.

 “A huge chunk of retail businesses passes on the high cost to consumers but an equally significant number hold their prices constant and take the hit to their profit margins,” explained Judd Murigi, Head of Research ICEA LION Asset Management, the firm behind the quarterly research.

The splurge exhibited by the Executive also comes as a new category of taxes, among them motor vehicle tax that will squeeze the consumer even further, is set to be introduced.

This is notwithstanding the fact that a majority of Kenyans have not settled or seen the benefits of a previous set of taxes, among them the enhanced National Social Security Fund, Social Health Insurance Fund (SHIF), a new band of Pay As You Earn (PAYE) targeting high-income earners, and Affordable Housing Levy.

This increase in taxes and levies and the expenditure on areas that are not producing any value in the economy tend to go against the Executives’ fiscal consolidation.

Additionally, the country is still recovering from the devastating effects of floods which exposed the underbelly of the government’s unpreparedness.

Constitutional lawyer Willis Otieno states that if the Kenya Kwanza administration was a government that responds to the needs of Kenyans and does what needs to be done to alleviate the suffering of the people, there would be prudent use of resources.

He references the floods that have now claimed over 230 lives saying the government was reluctant to react yet it had money from the last financial year.

“If they were responding and said we have gone far but we could have gone further with more money, then you can make a case of increased taxation. But as it were, all we are seeing is Gucci and Balenciaga in the middle of a national tragedy. They could not even declare (floods) a national disaster because it would mean mobilising money, resources and personnel to respond,” he said during an interview with Standard Group’s Spice FM.

All these expenditures by the government and the Executive are contrary to their wisdom of frugality in the face of tough economic times and particularly the country’s debt burden. Besides, more pressing issues like the deployment of intern doctors and junior secondary school teachers are yet to be addressed.

Just recently, the State refused to offer intern doctors their dues capped at Sh206,000 and instead slashed the amount to Sh70,000 through the recommendation of the Health Cabinet Secretary Susan Nakhumicha and the Salaries and Remuneration Commission, arguing that the amounts were unsustainable in the current economic situation. 

This raises questions about where the government’s priorities lie, even as one of the arguments fronted by President Ruto is that Kenya is not collecting revenue commensurate to its Gross Domestic Product (GDP). The plan, therefore, is to increase the current revenue collection against the GDP from 14 per cent to 22 per cent. 

“We do not have a revenue problem but an expenditure problem,” added Otieno.

An analysis of the budget estimates for 2024/25 by investment firm Cytonn has also pointed out the fiscal consolidation challenge.  

“Additionally, despite a small proportion of the expenditure going to development expenditure, the government has continually underperformed in development projects, only achieving 48.9 per cent of the estimates as per FY’2023/24 Supplementary Budget II as of the end of the ninth month of the year. Hence, the quality of fiscal consolidation remains a concern as a majority of the cuts to government expenditure fall on development spending, which could potentially compromise the growth potential of the economy,” reads the analysis published on May 3.

Cytonn recommends strict adherence to the expenditure rationalisation framework which is meant to cut down on spending on non-priority recurrent expenditure by 50 per cent and freeze foreign travel.

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