Jun 15, 2021

Mawazo Writing Africa

Writing about the main

The real debt burden in Kenya is corruption

Kenyans on social media have angrily petitioned the International Monetary Fund (IMF) to withdraw its most recent loan of $257 billion to the Kenyan government.

The loan, which is to be disbursed in tranches, comes with certain conditions. One key condition requires government to reform state-owned enterprises in order to bring under control runaway public expenditure.

Good governance activists have for long complained that a huge part of our public expenditure goes into paying extortionist salaries and allowances of state officials. Kenyan MPs, for instance, are some of the highest-paid legislators in the world. They also enjoy generous benefits and allowances. A recent media expose revealed how parliamentarians and senators jump from one committee to the next in order to rake in thousands of shillings in sitting allowances. Yes, they get allowances for performing duties for which they were hired and paid generously.

A few years ago, Kenya sent over 100 parliamentarians to a legislative conference in the US while countries which give us aid like Japan sent less than 10. Again, during the 2018 World Cup in Russia, Kenya, which did not have a team playing in the finals, flew MPs first class to watch the matches. By contrast, the president of Croatia flew economy to watch her team play in the final against France.

Every administration, especially those of Jomo Kenyatta and Daniel arap Moi, has used parastatals to divert public money into private hands. Even state enterprises that are monopolies in key sectors of the economy are forever in debt. Not surprisingly, those who manage them are some of the richest people in Kenya. An incredible tale of multimillionaire managers running broke enterprises. Thus the haemorrhaging of funds through extortionist salaries and allowances, and corruption leave a budgetary hole which we fill through loans.

In 2018, the Auditor-General’s report indicated that over a period of five years, close to Ksh5 trillion ($46 billion) was mismanaged, uncounted for or lost. Other reports have estimated the money lost to corruption every financial year to be equal to a third of the budget. Other estimates put that figure much higher. In other words, an amount equalling the loan of Ksh257 billion ($2 billion) borrowed from the IMF, which has sparked social media outrage, is lost to corruption every financial year.

No country in the world can survive without borrowing. The question is whether loans are used strictly for projects for which they are meant and that these projects add value to the economy. Some infrastructure projects like the roads being built are essential to the economy. Others, like the fake dams, were conduits for corruption. One key official had the temerity to scold Kenyans for complaining about money lost in the dams’ scandal. Only a mere Ksh7 billion was lost, he said angrily. Therefore, Kenyan’s anger at the IMF is misplaced. The object of their anger should be lords of corruption within government.

Tee Ngugi is a Nairobi-based political commentator