We’re in Sh5trn hole, just so as to quench vampires’ thirst

Wananchi outside Parliament June 14, 2018 when National Treasury Cabinet Secretary Henry Rotich presented the 2018/2019 budget. It appears that we are working 16-hour days to finance expensive, but fake lifestyles for tender barons. PHOTO | DENNIS ONSONGO | NATION MEDIA GROUP

What you need to know:

  • Kenya is in a Sh5 trillion hole — a massive, massive debt, the bulk of which has been built up over the past five years.
  • I think the government does not treat public money like money.
  • There is so much pork in this budget it is a miracle that the economy hasn’t had a heart attack.

God knows I am no economist, having ditched the subject at university, but I have been around for a while. I have also slept through many classes at business schools and something may have stuck by accident.

When you are in a hole, it makes sense to stop digging. When you are beat, you stop fighting lest you get killed.

Kenya is in a Sh5 trillion hole — a massive, massive debt, the bulk of which has been built up over the past five years.

Debt is like having a catheter attached to your jugular, draining your blood to feed vampires.

National debt is no different from family debt: You borrow, you invest, you use the proceeds to service the debt and generate a little surplus for the family.

MAKING SENSE

Debt only makes sense if mum and dad oversee it with rungus and pangas, dad is not allowed to spend it in the bar and mum is not permitted to buy shoes with it.

If you take a loan to finance a trip to Rome with your girlfriend, or you take a loan to buy clothes, you are slashing your own throat.

This being the case, would you borrow to go and buy a plot for twice its going price? Or take a loan to acquire an asset that you knew would absolutely earn you no additional income? So, why are we doing it as a country?

PUBLIC MONEY

I think the government does not treat public money like money.

If it did, every coin would be carefully invested, ensuring maximum return for the taxpayer, reducing debt exposure and giving aid only to the most deserving.

No money would go to show-off projects, kick-back-driven activities and outright theft by tenderpreneurs and their leeches.

There is no medal to be won for having a big budget. Saying you have a Sh3 trillion budget, what does that mean? What is a trillion?

The disaster of this budget is that Sh870 billion of the Sh3 trillion will go straight down the throats of vampires — to serve the debt monster. That's a debt crisis right there.

Secondly, going by the rather conservative estimate, a third of the budget is stolen through leaky procurement and fraud. That’s another trillion off your fancy budget.

The money we have, or hope to have, in terms of tax collection is Sh1.95 trillion. That’s not money in the bank, though. That’s what we hope KRA, which rarely meets its revenue targets these days, will squeeze out of Kenyans.

ECONOMIC TREADMILL

In real terms, if you offset the cost of corruption and debt servicing from tax revenue, you arrive at a position which, in the checkers game we played in childhood, is called “ndung'u”, the two parts “kanjana”; in other words, you are on an economic treadmill.

In this whole game, Sh559 billion of that budget is unfunded, meaning we plan to spend money that we don't have.

But at least the Jubilee government is an expert at borrowing. So, we have lined up to borrow Sh236 billion in project loans (maybe Chinese), Sh299 billion commercial debt (say Eurobond), Sh272 billion from local banks and maybe another Sh2.5 billion from the IMF and such like lenders. I'll not go into foreign payments and debt rescheduling and other voodoo.

This is not the balance sheet of an entity that can afford to build a railway at Sh1 billion a kilometre, spend Sh12 billion on laptops and Sh35 billion on CDF, which is nothing but campaign money for MPs.

PORK IN BUDGET

There is so much pork in this budget it is a miracle that the economy hasn’t had a heart attack.

Lawless lawmakers, ignoring the fact that the Legislature does not execute, have set aside Sh8 billion for their use to repair roads.

So, there will be county governments doing roads, the national government doing roads and MPs doing theirs. How will they decide who will do which road?

And the fellow to pay the price of this madness is you and I. Already, the government, when all taxes, both direct and indirect, are added up, takes more than half of our salaries. And it is coming for more. If you take a beer, you are hammered with more taxes. If you drive your car, you are hammered.

If you import a second hand car, if you send money to your mum back home, the government is waiting to squeeze more out of you. If you save, borrow, struggle and build a rental house, the government is there, asking for a share of the rent.

TENDER BARONS

If only this money was used properly for the development of the country, if there were no ‘tenderpreneurs’ and their government friends handing out LPOs to their ‘slay queen’ girlfriends, we would not mind so much.

But it appears that we are working 16-hour days to finance expensive, but fake lifestyles for tender barons.

Kick-back-motivated white elephants, vanity projects and bad ideas, which we are too proud to cut loose, risk dragging us down the Greek-type slope.

It is not the good times that we need to worry about, it’s those economic shocks that originate elsewhere in the world when we least expect them.

I say, let’s be prudent and live within our means. At the very least, slow down the spending until the country recovers from the vagaries of last year’s multiple presidential elections, then build up the spending steam when households and businesses have recovered their ability to generate taxes.