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
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