President Uhuru Kenyatta signing Finance Bill 2018 into law.

By Thomas Kariuki

President Uhuru Kenyatta’s obsession with big developments is nerve-wrecking. The multi-billion projects or literally loans have plunged Kenya into a debt crisis.

Debt is good because you can do several things, like planning to build a highway where you already have an operational standard gauge railway plying similar route (one major project competing against another major one), paying recurrent expenditure, creating 1 million new jobs, settling IDPs, PEV IDPs and squatters and fighting corruption among others.

The loan situation in Kenya reminds me of the saying “kukopa harusi, kulipa matanga” loosely translated as “borrowing is rejoicing, paying back is hurting.”

Pardon my insensitivity but I have to say it as it is. The impact of the projects in-terms of returns cannot be felt or were they just for building the presidential brand.

The standard gauge railway is way too behind in repaying its Chinese loan, the laptop project- no one can ascertain its impact, the NYS benefited its looters and to cap it all, implementation of devolution is frisking the country dry- do we really need certain positions like Senators, 47 counties and very many MCAs?

I remember advising on a similar vein that an audit of what has been done for the last five or six years since the president came into power should be commenced to ascertain the cost-benefit of the projects.

Then I was looking at the scandals in the National Youth Service and Youth Enterprise Development Fund. It is here that I suggested that the president should make Kenyan youth his priority and legacy.

Going back to the debt situation Kenya has found herself in, I want to address two issues.

Paying back the loan(s):

I agree wholly with the president that the debt must be paid, but how?

Kenya’s revenue generation model must now change. The body mandated with collecting taxes should sit down, devise new ways and models of gathering taxes and ensuring that these models are workable.

President Kenyatta’s proposal for increased taxation on other sector of the economy can only be read as a panic mode the president Kenyatta is in. At least the president wants to pay back the debt from his conversation of short term pain and gain. How? through taxes but taxing what, who, how and when?

Pressure could have led the president to take drastic measures christened austerity measures, but I will say without fear, that the new model the president is proposing should be well thought out. If the government insists on collecting the taxes using the austerity measures, then the president should also review pay for the employed to ensure that no one goes under.

The second way is to reduce spending; on who, what, when and how? I agree that the government has done considerably well in this, but more ways can be used to reduce wasteful spending, take pay cuts for government officer, work within our budgets and if push comes to shove do away or merge one or two agendas.

Improving economic growth will have to increase. Economic growth am sorry to say is only felt by the high in authority. The common man has lived in the same condition if not lower as when former president Mwai Kibaki was in power.

Economic growth is the anchor the Kenyatta government is missing. A question would go, has the projects the President has been implementing fostering economic growth or is economic growth a preserve of the few?

Naturally, if you want to pay off a debt, you cut on your spending or try increase your revenues. Iceland faced a debt crisis in 2008, its banks were unable to get financing from the international market and the unexpected happened, they were declared bankrupt.

The government decided to restructure the revenue generation model and set up currency swap agreements with neighbouring countries and was able to pull itself out of debt.

It is a good lesson that President Kenyatta can borrow a leaf from.

Monitoring and evaluation of projects

President Kenyatta must launch a project management, monitoring and evaluation team to drive his economic transformation agenda.

This is the team that will conduct time-to-time surveys on the progress of the projects, recommend better ways of implementing the project and evaluating the benefits of this projects looking at sourcing for funds.