The Standard Blog

Yippee! The Govt is broke, let’s all celebrate

Published on 19/03/2009

By Stephen Ndegwa

The Government is broke! From Finance Minister Uhuru Kenyatta’s look and demeanour as he briefed the press on the current cash crunch at Treasury, it was apparent that after countless denials and promises that all was well in matters economics, the situation had worsened to a point bureaucrats could no longer hide. The admission came days after it emerged the Government had failed to disburse free primary education funds almost three weeks to the end of the first term and days after the same minister asked International Monetary Fund to give Kenya “a stimulus package” to lift the faltering economy.

Governments over the years have formed a tendency of waking up to a sudden realisation that there is a budget deficit that can only be plugged with more loans from the domestic market (where banks make millions) and from IMF and World Bank.

These loans have accumulated to hit more than Sh900 billon and we are piling up more but do little to account their utilisation. Every year, the country spends more than 30 percent of income to service these debts, the rest goes to recurrent expenditure to run ministries, and very little for development.

In Uhuru’s admission, development spending has so far been halted meaning we are currently mark-timing as far as development is concerned. The net effect is that we have become slaves to the extent that western envoys can vomit on our feet and are no longer just prefects but colonialists.

While other countries in the third world like Uganda and Tanzania qualify for debt cancellation, Kenya, loyal in servicing debt was left out due to its ability to repay. (Don’t banks love such borrowers for a healthy bottom line?).

Last month, treasury boasted that an infrastructure bond had been enormously successful when it raised Sh18 billions which will most likely escape Kenyans collective memory.

But do we ever ask who shoulders the loan burdens? Who feels the effect of such backward policies and lousy implementation of government programmes?

The usual answer is the poor people already afflicted by hunger and disease. But I beg to differ. The working class Kenyan is the country’s donkey-stubborn and utterly foolish burden bearer. The teacher, doctor, engineer, policeman, secretary, journalist and business person carries the nation’s financial and other responsibilities.

Consider this. All the working class income is heavily taxed before getting into their bank account. The rest is chopped off ruthlessly in VAT on any item bought. The very poor don’t have salaries to be taxed. The very rich are too heavily cushioned to feel the impact.

When Uhuru Kenyatta increases taxes next budget, whether in beer, plastics or other items, the working class in the mainstream economy will be hit hardest. The poor only pay VAT and with no buying power, little is taken away. They can’t afford much else.

The working class drives investment and growth through savings and loans and at the same time struggles to pull up the poor by creating informal businesses, assisting them in paying for education, medical and other development needs. (Remember harambee cards are a common item in their pockets). It is this group that the poor look up to for support financially and otherwise.

This is the group Uhuru Kenyatta will be bleeding dry for the next 12 months to finance his budget deficit. Then he will splash the cash on white elephants.

But the tragedy is that the same group has remained aloof, cowardly, and confused whenever opportunity to change governance presents itself. This group will watch a protest march from afar, will never collectively raise cash or other means to fund a respectable political candidate.

In all elections, they remain politically attentive but never active. They leave the rich to produce a candidate, finance and whip and bribe the poor to queue to vote them in. The working class guy strolls and votes “gentlemanly” and never gets angry enough about his condition to seek means to change it.

Worst of all, they have refused to remove the veil of tribalism that stops them from seeing the real truth and circumstances that stand in their way to ultimate progress. The average working class Kenyan, even the diaspora elite, is tribalised beyond repair.

Post-election violence showed the poor in the city hack each other to death, the rich built a security wall around their nice suburbs as the working class ‘preached’ peace for continuity. Mathare, Kibera, Kondele and other slums erupted, while inWestlands, Lavington and Muthaiga it was business as usual. The working class areas of Buruburu, Umoja, South B and others remained tense, but calm.

In Thailand, an angry middle class camped in the airport to force their government address the economic crisis. The middle class were at the heart of the protests, their investments having been washed down by the recession.

The aloofness of our middle class must end or it will be the same cycle over and over. More burden same brokenness. Just like Benjamin in Animal Farm.

 
COMMENTS

1. On Wednesday April 22, 2009, 2:08 AM , enter full names Kituku Wa Nguku, United States wrote:

Every year, I travel to Kenya because of the love I have for my country of birth. Two weeks ago, I was in Kenya to visit my my 87 year old sister. Kenyans you are valued all over the world for some reasons I cannot figure out. Please my fellow Kenyans, stop all the lies and trick acts that portray signs of primitivity. We are in the21st century. Is there a government in Kenya? Liars, liars.

2. On Sunday April 19, 2009, 1:23 AM , Titus Sirengo, Kenya wrote:

It is not out of the moon that we can here the minister confess that there is no enough cash for the country. It should not be seen as a surprise with the number of ministers we have, the vehicle they use, the greediness they have, and the fact that they are not ready to pay tax. Shame on him and them. Just compare the number of ministers in Kenya and America, why should we have such a number?

3. On Wednesday April 1, 2009, 17:19 PM , S.K. Wasilwa, Kenya wrote:

The middle class r the main driving force of any country in all aspects and they have grossly let us down me included

4. On Wednesday April 1, 2009, 10:13 AM , vikta, Kenya wrote:

shamongly the life of an MP is superb but the poor suffer, now theres no money.this is a joke from a govt that is spending over30billion on its officials only.surely is realistic to tell kenyans the govt has no dime.we need to reduce the stupidious expenditures n act on wisdom n knowlege on the responsibilty we are supposed to own up to n ths is 90% on the govt because they serve us n represent us

5. On Wednesday March 25, 2009, 13:25 PM , James Maina, United States wrote:

Those who earn must pay taxes at reasonable rates to keep the economy fluid. If marginal propensity to consume is higher than the rate of saving, and the availability of goods and services is marginal, the currency value diminishes, hence low return on monetary and physical assets. For the government to meet its obligations, the tax burden is shifted to the middle class in form of taxes.


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