The President's speech Is done, but there are still no fat cats in jail

Saturday March 18 2017

By LUIS FRANCESCHI
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This week has been action-packed! In three days, we had four huge headlines.

Doctors went back to work after almost three months of deadlock and failed negotiations.

Tanzania’s President threw tantrums that scared the hell out of investors doing serious work for our neighbour.

Somali piracy has reawakened with the capturing of a Sri Lankan oil tanker off the coast of Somalia.

The radical anti-immigrant and anti-Muslim Dutch far-right PVV party, headed by Geert Wilders, was defeated by the VVD centre-right party, led by incumbent Prime Minister Mark Rutte. Rutte’s party will form Netherland’s new government.

We do not live in a bubble. All these issues will affect our future directly or indirectly, but the most relevant episode happened right here, in Nairobi, at Parliament, where the President gave a very interesting State of the Nation address.

The President’s speech was seamless. He summarised our challenges and aspirations and spoke of accountability, development, security, integrity and the need to rationalise public expenditure.

RULE OF LAW

The President was right to reaffirm his commitment to the rule of law and the need for a conducive environment for business and investment.

The rule of law and sustainable security walk hand in hand. Without the rule of law, security is reduced to fear and repression, which is not sustainable.

Security is one of the greatest threats to stability in our region. The inflow of illegal small arms and light weapons in Kenya is a big threat.

The President highlighted measures taken by the government in the last four years to improve internal security.  The ratio of police officer per person, he said improved from 1: 800 to 1:380.

These improvements have been tarnished by the alarming number of extra-judicial killings in the past two years. It gives the impression of a police force on the rampage, where extreme corruption has developed into uncontrollable anarchy.

TRIGGER FACTORS

Kenya is deeply engaged in the fight against terrorism, and the peace processes in South Sudan and Somalia. The government also enhanced counter-terrorism efforts to prevent radicalisation and dismantle terrorism operations, with more or less success.

The government’s efforts include increase of security personnel, adequate training, enhanced surveillance along the border and co-operation with foreign law enforcement agencies.

The President appreciated the lawlessness and violence in several parts of the country such as Laikipia and the orth Rift and assured us that measures would be put in place to curtail the violence.

He warned politicians who may be inciting the violence. He noted that inter-communal conflicts and criminal activities such as banditry, poaching, drugs and human trafficking was flagged as a menace to grapple with.

On this issue, the President limited his speech to the use of disciplined forces to maintain peace and security, but force alone is not sustainable. Any lasting solution will need to consider the root causes of violence and the trigger factors.

Certainly, as the President said, efforts to lower crime levels have been in place for the last four years through a multi-agency approach to security matters and public safety measures.

UNFORGETTABLE HERO

“The revival of industries like Pan Paper Mills in Webuye, Rift Valley Textiles Company in Eldoret, the re- establishment of new motor vehicle assembly lines by Volkswagen, Peugeot and Toyota demonstrate that we are on our way,” the President said.

The geographical conditions of Kenya are ideal for us to become a leading investment destination in the world, and a large-scale manufacturing nation. For this dream to come to life, we need to deal with corruption.

President Kenyatta would become an unforgettable hero if he managed to replicate the success in national exams in our public hospitals, police service and roads. We need to replicate the Matiang’i’s feat.

We need drastic changes. If we look after the integrity of our education system, health, security and infrastructure, we will be on the road to fast and sustainable growth.

The President said, “There are 90 Special Prosecutors for economic crimes, in the Judiciary and the Chief Justice has established a Special Anti-Corruption and Economic Crimes Division of the High Court, and has appointed 13 Special Magistrates to deal with anti-corruption and economic crimes cases.”

But there are no fat cats in jail and honesty is still more expensive than corruption.

In 2013 we pledged to make the necessary policy and legal changes to ensure that corrupt persons and companies would be barred from doing business with the Government. We have kept our promise by enacting a modern and far reaching Bribery Act which I assented to late last year.

The laws are in place. The structures exist. Now we need to walk the talk. This gets complicated, because we are in an election year. 

The President highlighted that, “One of the proudest achievements of my administration is in delivering honest exams in 2016. This was a first in many years, and it was a blow against corruption.”

STAGGERING AMOUNT

In March 2014, I had written that:

The wage bill is so huge that it is freezing development expenditure. The total cost for adjustment of salaries, pensions and gratuity is expected to be Sh16.6 billion in 2014/15. As a result, the cost of salaries and administration of the new county structures is expected to increase from Sh13.6 billion in 2013/14 to Sh30.2 billion in 2014/15.

The President reaffirmed yesterday that our wage bill threatens to destroy our development agenda as a nation.

Today, the public wage bill stands at sh627 billion per year, amounting to 50 per cent of the total revenues collected by the Government. This staggering amount is used to pay the salaries and allowances of 700,000 public officers including those of us here today. 

The real problem is not devolution, but the lack of it. New county governments were born, functions were devolved, but the size of the national government never shrunk.

So, functions and positions have been duplicated many times over, and this is holding the country back. “In simple terms”, the President said, “50 per cent of all the money collected as revenues in Kenya goes in to the pockets of less than two per cent of the country’s total population.”

The President then made his most dramatic appeal when he said:

...we must always remember that the calling of leadership is to serve, not to become rich through serving… These recommendations will allow us to pay more attention to our medical professionals, our teachers, our policemen, prisons officers and many others who also need to receive adequate compensation for the services that they render.

 This debacle was already in sight in 2013. The wage bill had increased from sh241 billion in the financial year 2008/2009 to sh458 billion in 2012/2013.

The Salaries and Remuneration Commission had reported that this amount was more than 50 per cent of the total domestic revenues, which was way above the international best practice of not more than 35 per cent recommended for countries in Sub-Saharan Africa.

The interesting part is that devolution was not the real culprit. The biggest spenders, accounting for 56 per cent of the wage bill were The Teachers Service Commission (sh138 billion), state corporations (sh83 billion) and County governments came in a comfortable third place at Sh71.2billion).

SOBER AND DEMANDING

The real drama came from a bloated national government that did not reduce its size, and by unrestricted development borrowing. By 2014, the country’s international debt had already reached almost Sh1.2 trillion ($12.7 billion), a rise from 2012’s KSh800 billion.

Expenditure rose to 29 per cent of GDP in the 2014/2015 financial year thanks to a very large increase (67 per cent) in the national government‘s development budget. It is as if we had used the Constitution, especially devolution, to justify excess borrowing and the depletion of public coffers.

The speech was excellent and it dealt with the key issues affecting Kenya. The President’s approach was clear, well-informed, sober and demanding. Now we need to walk the talk!

Dr Franceschi is the dean of Strathmore Law [email protected]; Twitter:[email protected]