Projects at risk as General Election costs hit Sh50bn

Tuesday July 18 2017

Independent Electoral and Boundaries Commission chairman Wafula Chebukati addresses a press conference in Nairobi on Friday. With him are the agency’s CEO Ezra Chiloba and commissioner Roselyne Akombe. PHOTO | FILE | NATION MEDIA GROUP

Independent Electoral and Boundaries Commission chairman Wafula Chebukati addresses a press conference in Nairobi on Friday. With him are the agency’s CEO Ezra Chiloba and commissioner Roselyne Akombe. PHOTO | FILE | NATION MEDIA GROUP 

By NATION TEAM
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Kenya is feeling the strain of funding possibly the second most expensive election in the world in the face of falling revenues, public sector wage pressures and emergency spending following prolonged drought.

So demanding are the competing needs that the Treasury says it will have to cut spending in critical sectors and divert resources from others, with infrastructure projects the government is touting in its re-election bid the most likely to be sacrificed, according to a report in the current issue of The EastAfrican.

Treasury Principal Secretary Kamau Thugge said higher salary demands by nurses and lecturers who are on strike, security interventions in Somalia and preparations for the General Election posed a risk to public sector operations in the current financial year.

“The General Election could create uncertainty that would weaken both foreign and local investor confidence and slow down projected growth of the economy. Increased fear of insecurity in various parts of the country calls for additional expenditure,” said Dr Thugge in a Pre-election Economic and Fiscal Report released last week.

SH49.9 BILLION

The report shows that up to Sh49.9 billion has been allocated for the election, with Sh5.3 billion going to election-related security operations such as policing 23 counties the intelligence service has identified as potential hotspots for election violence.

The bulk of the money — Sh42.9 billion — will go to the Independent Electoral and Boundaries Commission (IEBC), with the rest being distributed to the Judiciary, the National Intelligence Service and the Registrar of Political Parties.

“The budgetary allocation for the 2017 General Election is Sh49.9 billion  and is composed of direct and indirect election-related expenses. Direct election expenses have an allocation of Sh33.3 billion while indirect expenses are allocated Sh16.6 billion,” says the report.

The allocations, at Sh2,540 for each of the registered 19.6 million voters, place the Kenya election at the apex of spending on elections in the world, behind only Papua New Guinea ($63 — Sh6,300), according to data collated from multiple sources.

COST-EFFECTIVE

In East Africa, Rwanda is expected to have the most cost-effective election, with the electoral agency expected to spend $6.9 million (Sh690 million) for the 6.8 million voters or $1.05 (Sh105) per voter on average.

That will be an improvement over the $1.71 (Sh171) per voter spent in 2010.

In contrast, Kenya’s average cost for the August 8 polls reflects an increase of more than half on the 2013 elections and is a quarter more expensive than in 2007.

The cost of the election in Uganda last year was $4 (Sh400) per voter compared to $5.16 (Sh516) per voter in Tanzania in 2015.

Ghana’s election last year, at $0.07 (Sh7) per voter, appears the least expensive in Africa, according to the data we sampled, against a global benchmark of $5 (Sh500) per voter.

ELECTION LOGISTICS

The high cost of polls in Kenya reflects the infrastructure challenges that complicate election logistics as well as procurement of election materials at dubious costs.

The latter is the subject of a court case on how the tender for ballot papers was awarded. 

Some of the direct expenses include recruitment and training of election officials, registration of voters, inspection of registers, procurement of election materials and their distribution.

The IEBC takes Sh9.6 billion of the indirect expenses, which will be used to pay allowances for security personnel, communication and vehicle maintenance.

POLICE DEPARTMENT

The State Department of Interior will receive Sh3.8 billion against its request of Sh8.2 billion.

The bulk of the request from the police department was for allowances, which had been allocated Sh4 billion, followed by food at Sh1.6 billion.

The security docket had requested Sh1.5 billion for miscellaneous costs and Sh22.8 million for airtime.

Kenya Defence Forces has been given Sh1.5 billion to ensure surveillance of the country’s borders, especially Lamu, Wajir and Mandera.

According to The EastAfrican report, the Judiciary received Sh227 million for cases that may arise from the elections while the Office of the President was allocated Sh384 million for the assumption of power by the president-elect.

SECURITY OPERATIONS

Intelligence agents have been allocated Sh550 million to support security operations.

In 2013, the total cost of the election was Sh26 billion, indicating a near doubling of cost this year. 

Nigeria, with nearly 70 million voters, spent $603 million (Sh60.3 billion) in its 2015 elections, translating into $8.61 (Sh861) per voter.

Two years ago, an opposition party claimed that president Goodluck Jonathan had spent $5 billion (Sh500 billion) in his unsuccessful bid to retain the seat won by General Muhammadu Buhari.

CAMPAIGN

A strategist of one political party in Kenya said it would take Sh5 billion for a presidential candidate to run a successful campaign, mostly on logistics, media and mobilisation of voters.

Research indicates that the cost of elections tends to drop with experience, but in Kenya, it has been rising.

This year, elections have attracted the highest number of candidates — 16,259 — vying for 1,882 posts, which has seen lengthy ballot papers.

Voters are expected to take longer in the election booths as they go through the long lists.

The IEBC now has 40,883 polling stations, up from 33,000 in 2013, which pushes up staffing costs. The commission had advertised 359,958 positions.

POLLING CLERKS

The officials are on a minimum nine-day contract and a maximum of 30 days, depending on the role they play.

They comprise 262,665 polling clerks, 91,032 presiding and deputy presiding officers, and 5,054 electoral trainers.

The polling clerks are paid Sh1,000 a day, making the least amount payable to them Sh2.3 billion.

The electoral agency was also looking for 580 ICT clerks, 337 logistics officers, and 290 deputy returning officers.

Because of the competing expenditure needs, the government has cast a shadow of doubt on its growth forecast of 5.5 per cent for the economy this year.

ECONOMY GREW

The economy grew by 5.8 per cent in 2016, compared with 5.7 per cent in 2015.

Dr Thugge said increased demand for higher wages by public servants, underperforming revenues, resultant effects of drought and flood that hit various parts of the country and the slowdown in the global economy due to the planned exit of the UK from the Euro and uncertainty of the policy position of the new US administration paints a grim picture of the economy.

He said government revenue collections have lagged behind target since the beginning of the 2016/2017 financial year.

For the  July 2016 to May 2017 period, the total revenue collections totalled Sh1.25 trillion, against a target of Sh1.33 trillion.

INFLATION

Several factors have combined to dampen Kenya’s economic growth prospect, including rising inflation, declining private sector credit, rising public debt, falling revenue collection, increased government spending, falling corporate earnings and layoffs.

In March, the gross public debt hit Sh4.04 trillion, compared with Sh3.26 trillion in the same period last year.

Ms Razia Khan, chief economist at Standard Chartered Bank, said: “Kenya’s elections are typically associated with slowing growth as investors turn more cautious on perceived political risk, and activity winds down.

“The effect is likely to be exacerbated this year by a regional drought that has driven headline inflation sharply higher.”