NYS saga is all about the State’s poor management of public finances

The corruption allegations surrounding the National Youth Service and the raging debate over whether or not planning and devolution minister Anne Waiguru should step aside continues to generate heated exchanges.

I hope that when the dust settles, we will have learnt our lesson and came up with ways of insulating this ambitious national programme from the sticky fingers of the eating chiefs.

The National Youth service is indeed, a massive programme.

Consider the following facts. First, at Sh25 billion the budgetary allocation, this single department is larger than that of the ministry of tourism and commerce.

This year’s budgetary allocation to the NYS by far dwarfs budgetary allocations for the ministries of  foreign affairs and international co-operation, industrialization and enterprise development, environment and natural resources and  information and communications.

NYS’s budget is also bigger than the money we have allocated for curative health services, preventive and promotive health, irrigation and drainage agriculture and maternal health care.

Large budgets come with opportunity for lucrative contracts. You can imagine just how big the contract for uniforms and boots and helmets has become.

Mark you, in three recruitment cycles, and within two years — the NYS contingent has grown from 6,000 to 31,000. Another 10,935 are to be recruited in September this year, bringing the total to 42,000.

The size and sheer numbers of recruits alone is why the political opposition is suspicious — viewing it as  a re-incarnation of  Nazi Germany’s World War 1 storm troopers — who were trained in infiltration tactics and selected on the basis of blind obedience and fanatical loyalty to the ruling elite.

A large population comes with massive procurement deals for foodstuff  running  into billions of shillings —  maize, sugar, rice beans salt.

TWO MAJOR PROBLEMS

In my view, the controversy surrounding NYS is not about Ms Waiguru. Even if you get her out of  office,  deep-seated issues will remain.

The big issue here the parlous state of public financial management in this country.

If you throw billions of shillings at a public institution within a short time frame without putting into place working accountability systems, you must expect two major problems: Inadequate capacity to absorb the money and corruption.

It does not matter even if you commit the management of that institution to a committee of arch angels.  Last year, we saw this  phenomenon playing out at the judiciary which — like the NYS — has been on a spending spree building courts all over the place and buying expensive property worth hundreds of millions, some of which are yet to be put to use.

It all culminated in the exit of former chief registrar, Gladys Shollei. Mark you, the budget of the judiciary is one of the fastest growing.

We threw the billions without considering neither capacity to absorb the money nor the state and efficacy of internal controls.

We also threw billions — all at one go — to the nascent institutions known as county governments without caring about the quality of accountability systems.

I have a suggestion. We need  a total overhaul of public procurement and go back to the old idea of procuring goods for  the public sector  by a specialized agency.

A properly implemented e-procurement system where procurement of common user services is automated and where the government can buy common user items such as pens, stationary, jembes, pangas, car tyres and pest control products  may be a good idea.

In the past, this  role was played by a powerful entity known as the Supplies Branch which has since become moribund.

And the beauty of  central  procurement agency in the image of the USA’s General Services Administration (GSA), is that you can use public procurement to promote local manufacturing.

The massive budget the NYS has for military boots should be used to stimulate the local leather industries.

The budget for uniforms must be made to stimulate the growth of  a local textile industry.

Why are the government departments buying furniture from Turkey and Dubai?

And, with a GSA-style agency, you can leverage on scale to procure services on behalf of all government bodies at a discount off the market price.

It was the former Treasury PS who estimated that as much as 27 per cent of  public procurement is lost in wastage.

Let’s debate how we can fashion public procurement to support industrial policy.

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