On Kenya’s fiscal mess, few want to discuss waste, poor planning

Much of the public debate and professional analysis of the causes of the financial mess that the country faces has so far centred on one factor: the unsustainable over-borrowing.
However, less mentioned is the profligacy and sheer wastage of public funds through either luxury living by State officers or poorly thought-out yet costly mega projects.
This point was aptly captured by Kitutu South MP Richard Onyonka when he spoke outside Parliament on September 20 during the stormy session to pass the contentious fuel tax increase.
“Kenya is the only country in the world that spends Sh30 billion to build a dam which does not hold any water,” he told Citizen TV as he urged President Uhuru Kenyatta to review spending on some of the projects as a way of reducing the budget deficit.

“We are asking the President to shelve the tax issue and come and sit down with us and we will tell him where he can get the money (without the tax increase)”, said the MP, who is also a member of the parliamentary Budget Committee.
The Jubilee government has defended the projects it has started since it came to power in 2013. National Assembly Majority Leader Aden Duale said all programmes initiated by the government are beneficial to Kenyans.

“You cannot say that the government is such a poor planner to undertake projects that are of no economic value to Kenyans,” said Mr Duale, also the Garissa Township MP.
Though the Jubilee government has come up with a nice agenda on how to improve the livelihoods of Kenyans, experts have questioned the viability of some of its mega projects, which for the last five years have been gobbling up taxpayer money with little in return.

GULANA-KULALU IRRIGATION PROJECT
Jubilee promised that under its watch, no Kenyan would go hungry and in order to guarantee food security, it promised to put fertile land across the country under irrigation to supplement rain-fed agriculture.

To this end, President Kenyatta in January 2014 launched the Galana-Kulalu Food Security Project, an ambitious undertaking to water one million acres in Tana River and Kilifi counties.
To date more than Sh19 billion has been pumped into the ambitious project, which was hoped to yield 20 million bags of maize per year, the country’s staple food. However, the project has become a big flop.
To date, only 5,000 acres, out of the targeted one million, has been cultivated. A report prepared by the Auditor General for the 2015-2016 financial year, and released recently, shows that the project yielded only 103,000 bags of maize. In 2015, MPs had recommended that the project be put on hold following a report by the parliamentary Committee on Agriculture, which concluded that it is not viable in its current design.

“The project has been a waste of taxpayers’ funds. It should be suspended and the officials investigated for the loss of public funds,” said the committee’s chairman, Mandera East MP Mr Mohammed Nooru.
Despite these criticism, this financial year Treasury allocated a total of Sh8.5 total of sh8.5billion for irrigation purposes including the proposed expansion of the National Irrigation Programme and Smallholder Irrigation programmes that is responsible for the Galana-Kulalu irrigation project.

LAPTOP PROJECT
One of Jubilee’s main promises in its 2013 manifesto was to give laptops to Standard One pupils in public primary schools.
The one-laptop-per-child programme, called the Digital Literacy Program, was meant to put information and communication technology at the centre of teaching and learning in primary schools.
Critics said the Sh75 billion project, to be implemented in three phases, was a waste of public money given that a good number of primary schools in the country did not have electricity at the time.
The project has so far gobbled up nearly Sh30 billion. Moi University and Jomo Kenyatta University of Agriculture and Technology (JKUAT) in February 2016 won the Sh17 billion laptop tender to supply the laptops.
This financial year, the government had allocated Sh11.9 billion for the project, but MPs recently slashed the figure almost by half, Sh5.5 billion, when passing the 2018 Finance Bill. But despite its apparent shortcomings, President Kenyatta has continued to defend the project.

Fertiliser subsidy
In relation to this, the government has refused to heed the advice of professionals over its poorly managed fertiliser subsidy programme, which targets small-scale farmers but has instead become a boon for wealthy farmers.
The World Bank in the 2018 World Bank Kenya Economic Update had this to say about the subsidy programme: “In Kenya, studies show that the current untargeted and regressive fertiliser input subsidy scheme, apart from being costly, disproportionately benefits large and medium-sized farmers and crowds out private investment in the purchase and distribution of fertilisers.”
Despite the mounting criticism, CS Rotich allocated Sh4.3 billion for the programme.

THE STANDARD GAUGE RAILWAY
Kenya’s most expensive infrastructure project ever, the Sh327 billion Standard Gauge Railway (SGR) between Mombasa and Nairobi is yet to turn in a profit for the taxpayer since it began operations in June 2017.
It was revealed that it had raked in Sh1 billion, according to data from the Kenya Railway Corporation in June as it celebrated the first anniversary of operations.
However, the taxpayers are also coughing out a whooping Sh1 billion a month to run Madaraka Express trains that run on the SGR between Nairobi and Mombasa. “The good news is that by the end of this year, the SGR will have broken even,” said Deputy President William Ruto in July when he defended the cost of running the SGR during a TV interview in July this year.
But despite the lingering questions of its viability, the government is currently negotiating with the Chinese banks to finance the second phase of the line from Naivasha to Kisumu at a cost of Sh380 billion.
Currently the government is extending the line from Nairobi to Naivasha at a cost of Sh150 billion. Once complete, the cost of the projected is estimated to top Sh1 trillion.

LAST MILE CONNECTIVITY PROJECT
Jubilee’s other pet project to bring electricity to rural parts of Kenya, known as the “Last Mile Connectivity Project”, has also been criticised as costly yet its returns to the economy are minimal.
The project started in 2015 and aims to increase the country’s access to electricity from the current 40 per cent to 70 per cent in its first phase and eventually lead to universal access in subsequent phases.
The first phase cost Sh18.5 billion, of which Sh13.5 billion was a loan from the African Development Bank (AfDB) while the rest was provided by the government. Some 314,000 households within a radius of 600 metres from a transformer to the power grid were targeted.
However, the plan, touted to place Kenya on the league of the most connected countries in Africa, is now faced by low consumption and poverty in some of the beneficiary households. Despite the criticism, ADB has pledged another Sh15 billion for the second phase of the last project.

However, MPs on Thursday MPs shaved Sh2.6 billion from the project’s budget.
Energy Cabinet Secretary Charles Keter also defended the project saying it has connected nearly four million homes to electricity, up from 2.1 million when Jubilee came to power in 2013.
“We are planning ahead,” said the CS. “Not all programs will produce immediate results. We trust as government that the benefits of the Last Mile will become apparent sooner than our critics think when you see businesses coming up and flourishing in rural parts of this country because of the electricity infrastructure we are putting up now.”

DAM MILLIONS
Since coming to power in 2013, the Jubilee administration has vastly expanded the dams network across the country to provide water for domestic use and to bring more arable land under irrigation. Today there are more than 60 dams under construction, costing billions of shillings. One of these projects, the Thwake Multi-Purpose Dam in Makueni and Kitui counties, started in November last year and will cost Sh36.9 billion. When completed, the dam will be the biggest in East Africa, and is projected to hold 134 million litres of water. Chinese contractor China Gezhouba Construction Group Corporation is building the dam, with funding coming from the Kenyan government and the African Development Bank.

“Over 60 dams are under construction across the counties which are aimed at improving water services in the country to 80 per cent by the year 2020,” said Water and Irrigation Cabinet Secretary Eugene Wamalwa during the launch of the dam.