Uhuru’s major policy plans brilliant, but the math doesn’t add up

President Kenyatta delivers his speech during the opening of Parliament recently. He used the occasion to outline his administration’s policy agenda. FILE 

By Peter Odoyo

In Summary

• Huge public wage bill leaves new administration little money for projects.

President Uhuru Kenyatta and his coalition were elected on the back of some promises, which the government will be expected to deliver on. But the economic realities present the President with a baptism of fire, his tenure as the Minister of Finance not withstanding.

The first reality shock for the new administration are the permanent and immovable walls of the national budget. There is a limit as to how many new initiatives they can undertake no matter the promises for the simple reason that there is just not enough money.

Of the total national budget 15 per cent will by law go to the devolved governments. On paper, the balance, 85 per cent, that goes to the national government looks a lot. However, when it is put to use it becomes very small. Let me illustrate this using basic arithmetic.

Of the national budget left for the national government I can confidently say that about 70 per cent is taken up by the statutory payments. These include expenditure on the military, including the war in Somalia, the police service, the national intelligence, the civil service, the teachers, public debt interest and loan repayments, Parliament and its CDF, the Judiciary and the various statutory commissions.

What all this means is that the discretionary or surplus part of the budget may just be 15 per cent or roughly Sh200 billion per year based on our current budget of about Sh1.2 trillion plus.

And where does Sh200 billion leave the President and the Deputy President vis a vis the political promises which they may genuinely want to deliver:

1) 2,600 kilometres of tarmac roads per year, (13,000 divided by 5)

2) one million laptops for primary school pupils and teachers,

3) free maternal care,

4) new and modern equipment for the police and the military,

5) expanding the electricity and water coverage,

6) job incentive programmes for the youth.

Let me limit the wish list to just the above few and let us see how we do on the surplus of the Sh200 billion. First the roads. To do the 2,600 kilometres will require at least Sh125 billion per year. Thika Road (10 lanes), though not a typical road, cost nearly Sh1 billion per kilometre. At the end we shall pay Sh40 billion for the 40km road.

So assuming the roads will not be that elaborate a conservative figure of Sh125 billion has been used.

The one million laptops require Sh25 billion to cater to teachers and related infrastructure, the maternal and child healthcare subsidy like school milk will require Sh20 billion, and the new police and military equipment at least Sh50 billion

In taking just six new items the expenditure levels have exceeded the surplus budget to reach Sh300 billion. In short the arithmetic does not work. The difference between fulfilling the promises and the reality of the Consolidated Fund is too wide.

Well the Treasury mandarins will quibble that it will not cost that much or that I have over simplified the process. Well I remind them that the inflation rate in October this year does not lie. So much for rants and raves, let me focus on what the government should do.

First is the laptop promise. This is a pillar that should not be given up. A few decades ago they laughed when Rajiv Gandhi, as a new young President of India taking over from his murdered mother, proclaimed that India will embrace computers.

Many establishment politicians laughed it away as a waste of money. Today India leads the globe in software and call centre work with direct and indirect employment in excess of two million.

The digital drive is key to economic progress and the same has been reaffirmed by the inaugural speeches. How it is done is where I differ. I propose the following modifications on the laptop promise.

First the target group should shift to the Standard Seven and Eight as they can speak and read English, the main digital language of the computer. The Standard One level is much too low as many pupils cannot even speak, read or write English or work out simple arithmetic.

(Not many of us have the luxury of nursery school education; it costs an arm and a leg anyway).

By focusing at this higher levels of primary school the digital off take levels will be higher. On the roads, an average of 2,600 km of new tarmacked roads per year is too much as we do not have the engineering and technical expertise.

Yes, we have very good engineers and good surveyors, etc. However, the throughput time for the design, procurement, contracting and financing roads is much too long and far too slow. On average to get a contractor on site for a 100 km road takes almost four years.

In other words the pipeline is too small and only so much water(roads) can pass through. So no matter the promises only so many kilometres of road can be done.

The new administration is aware of this but even with the majority in Parliament it will require time to change the procurement rules and train staff on new accountability and audit rules. We could, with imported expertise, be lucky to do 1,000 km per year.

My proposal is that the government focus be on the high impact roads from Mombasa to Malaba and Busia. Make the whole link a dual a four-lane carriageway.

And secondly do the trunk roads that link the county headquarters to each other. These roads will double the income to Kenya from neighbouring countries and boost internal trade which is the premier platform for economic development.

The government priorities should be high impact programmes and projects. For example, give free school uniform to Standard Ones and eliminate the many levies imposed by school heads.

I predict there will be almost 30 by-elections at various levels over the next 12 months caused by petition nullifications or death. So early good performance is important.

The future means more borrowing by the government and the resultant crowding out of the private sector. So for business people, higher interest rates are a possible reality.

There will be more investors, especially with the new oil finds in East Africa. However, payback into the Treasury coffers may be on the re-election year. New revenue streams will be slow for the government so the easiest may be taxation.

Mr Odoyo is a former assistant minister for foreign Affairs and former Nyakach MP.