Parliament must increase funding for the Kenya National Bureau of Statistics

What you need to know:

  • It is not surprising, therefore, that the Cabinet Secretary for Agriculture confirmed that while there is sufficient food in stores, the most vulnerable in Kenya suffer hunger due to inability to purchase food.
  • Given that income tax on wages is the largest single source of tax revenue in Kenya, it is clear that the tendency of the legislature to approve bills that increase the overall tax burden on working people will soon run into a firm wall unless there is sufficient job growth to close that gap.
  • Parliament’s posture should not be to ask what debt arrangements have been made for these projects, but rather to question how the Executive proposes to substantially reduce the tax burden on the small army of income tax payers.

In Kenya, policy debate tends to be impressively animated to a large extent, but it is often fact-free and obfuscated by incomplete disclosures from offices in the Executive.

Despite that, the Kenya National Bureau of Statistics, a public body that receives far less funding than it merits, does an impressive job in collecting and presenting some data on various economic, social and public services in appreciable detail.

Looking only at publications such as the Economic Survey, published annually in mid-year, and the Statistical Abstract, which summarizes the national data for preceding years, will lead to an education about our challenges in growth and the progress that this country should make.

SPENDING ON FOOD

The latest edition of the Statistical Abstract (2013) gives an accurate view of the quality of lives, the economic circumstances and the broad aggregates of economic exchanges that took place in Kenya up to 2012.

One impressive piece of descriptive data shows the share of private spending by Kenyans throughout that year, confirming that a disproportionate amount goes to food and beverages.

It may not mean much that up to 47 per cent of all private spending in Kenya goes to food, but considering that the country is approaching income status of $1000 per capita, it shows that a majority of Kenyans still live in very basic circumstances.

HUNGER AMIDST PLENTY

The second-largest expenditure item is clothing and footwear, which comes at 2.6 per cent of total private spending. In a sense, the trend over five years up to 2012 shows that private expenditure on food is 18 times higher than on clothing.

Putting these two pieces of information together leads one to wonder whether Kenyans eat too much or buy far less clothing than they should.

Food and clothing are different because one is more durable while the other is consumed more regularly.

Even with that difference, this picture shows that the private spending profile in Kenya is remarkably similar to that of a poor country. It is not surprising, therefore, that the Cabinet Secretary for Agriculture confirmed that while there is sufficient food in stores, the most vulnerable in Kenya suffer hunger due to inability to purchase food.

LESS PERMISSIVE

A separate section of the same publication reveals the distribution of working Kenyans who earn income from wages. This part of the data may be the most surprising, even for those familiar with the nation’s economic affairs.

For instance, the number of Kenyans in wage employment has risen by 12.7 per cent in the five years ending in 2012 but is still lower than the rate of overall population growth for the same period. Put simply, the population of wage earners is not keeping up with overall population growth.

Given that income tax on wages is the largest single source of tax revenue in Kenya, it is clear that the tendency of the legislature to approve bills that increase the overall tax burden on working people will soon run into a firm wall unless there is sufficient job growth to close that gap.

Understanding the implications of this fact should lead the Legislature to be less permissive of the quest for big infrastructure projects based on dubious, questionable feasibility studies.

BURDEN OF TAXATION

Plainly put, the burden of taxation on income taxpayers will increase with the tacit approval of every shiny project that is presented by public servants with a bias towards grand construction projects.

It behoves Parliament to examine more closely the available data and question the assumption that every expensive project is guaranteed to increase the rate of economic growth.

Taking this into account, Parliament’s posture should not be to ask what debt arrangements have been made for these projects, but rather to question how the Executive proposes to substantially reduce the tax burden on the small army of income taxpayers.

THE LEGISLATURE'S BEST FRIEND

While performing its oversight functions, Parliament should recall that any additional shilling given to the Kenya National Bureau of Statistics would yield more insights to inform the oversight and public watchdog functions of Parliament instead of assisting Executive offices to fund more white elephants.

In carrying out the functions assigned by the Constitution, the legislature’s best friend is the public data agency.

Parliament’s oversight function is often undermined by the Executive having far better data than the Legislature.

This asymmetry can only be addressed by allocating more resources for the KNBS, to enable it produce neutral information for public consumption.   

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi. Twitter: @IEAKwame