Accountability, not poor implementation, main hurdle to Kenya’s growth

 

President Uhuru Kenyatta: He will meet Israeli Prime Minister, Benjamin Netanyahu, as well as other senior government officials to discuss bilateral trade. FILE PHOTO | JEFF ANGOTE  

By DENNIS KABAARA

In Summary

• Ministries, departments and agencies have wasted away Sh200bn in opaque spending and pure theft under Jubilee’s watch.

Kenya’s main development challenge is not a lack of ...
ideas, or plans.

It’s not even the well-worn mantra of poor implementation. It is all about an ingrained lack of accountability which has popularised the brazenly defeatist “uta-do?” (what will you do about it?) syndrome.

Let us take a step back and view this reality through the prism of a couple of the official accountability actors the Constitution has established.

Then let us use the tyranny of budget numbers to understand the dangerous path that Kenya is pursuing. Besides, our “sirikali” culture — despite a progressive Constitution — has so far ensured that we do not have the freedom of information legislation. 

So let’s just work with the information already in the public domain. Coincidentally, one research and advocacy group’s estimate of the personally-funded cost of our 2013 election (for major positions) comes out at roughly the full value of our controversial Eurobond.

The Transition

When Jubilee strode into government, it found — according to the Auditor-General — Sh44 billion in pending bills (not Sh140 billion as claimed by the Presidential Delivery Unit, unless there is another “hustler-jet” et al story here).  

This transitional Sh44 billion was four times higher than the Sh10 billion average observed in the prior decade following the Kanu-Narc transition. 

Simply, our transition to Jubilee was, politely put, rather expensive. The official highlight of this transition was Sh8.3 billion transferred from the Provincial Administration and Internal Security ministry to the Kenya Police and the subsequent convoluted paper trail. Of the original transfer, Sh1.4 billion lacked supporting papers. 

On the recipient Kenya Police side, despite financials showing Sh8.3 billion received, Sh2.8 billion was not actually receipted and Sh2.3 billion was “refunded” to the ministry.

The National Intelligence Service, the Directorate of Criminal Investigation and Provincial/District Commissioners received Sh400 million, Sh25 million and Sh71 million respectively. The rest of the money just disappeared.

We have no idea how Parliament’s Public Accounts Committee (PAC) resolved this illegality — somewhere between a dastardly continuum of pure theft on one hand and non-security agencies funding security on the other.

Meanwhile, we missed the unofficial highlight from our auditor-general’s special audit that the Judiciary, through its Judicial Training Institute, was effectively forced to pay for the 2013 presidential inauguration.

First year budget

The 2013/14 fiscal year was Jubilee’s first full budget year. The national government’s Ministries, Departments and Agencies began with a budget of Sh1.4 trillion, of which the Controller of Budget (CoB) informs us that Sh1.1 trillion was actually spent.

The auditor-general tells us that Sh108 billion — effectively 10 per cent — represents “spending misdemeanours” — Sh67 billion in unsupported expenditure, Sh25 billion in spending not approved by Parliament and Sh17 billion in pending bills. All of this happened in one year.

By comparison, these misdemeanours under Kanu (final year only), Narc and the Grand Coalition Government accounted for between two and three per cent of actual spend. 

Yet PAC remains unable to finalise and publicly communicate its work on the auditor-general’s report.

So we still don’t have accountability answers from the Health (Sh23 billion), Transport and Infrastructure (Sh23 billion) and Education (Sh13 billion) ministries in unsupported expenditure. 

Lame duck PAC

We have no understanding of Health’s Sh24 billion in spending not approved by Parliament. We missed the first year “pending bills” warning around Agriculture (Sh3.6 billion), the Independent Electoral and Boundaries Commission (Sh1.4 billion), Devolution and Planning (Sh1.1 billion) and —shockingly — “unclassified” pending bills (Sh4.6 billion). 

“Unclassified” means the auditor-general was unable to determine if these bills represented “recurrent” or “development” expenditure. So much for our award-winning Integrated Financial Management Information System!

Then there is the unresolved detail.

The Devolution and Planning ministry unusual transferred almost Sh5 billion to other government agencies, as well as the Sh8 billion in unsupported asset purchases that were never quite clearly explained (if we remember that story about “interesting toys”). 

Then there was the Department of Health’s own Sh15 billion transfers received from government entities and the Sh6 billion shortfall between what the Kenya Roads Board recorded as collected in road maintenance (fuel) levies and Transport and Infrastructure’s record of what it received.

That is not all. There was also a Sh1 billion short-fall between what the Transport Infrastructure ministry transferred to its various semi-autonomous agencies and what the agencies recorded as received.

Most importantly, Kenyans do not know what to make of the Sh500 million that the Lands ministry transferred to Devolution and Planning for purchase of land for IDPs when the latter’s records show it transferred Sh2.5 billion to the former, for the self-same purpose. 

But as if to save the best for last, the Ministry of Education spent Sh1.3 billion on scholarships and other educational support towards Constituency Bursary Fund Committees without a single document to support it.

Looking at this sample data, it seems fortuitous that some, but not all, Cabinet heads rolled at the end of last year.  The bottom-line is however that a large segment of this questionable spending funds electoral campaigns, and the internecine conflict flowing therefrom.

Second year budget

So, the fact that “heads rolling” was based on the conjecture of reported incidents rather than actual data means three things.

One, “rumour reporting” continues to trump “systematic data”, which opens up space to the “politricks” which we are so well practised at. “Big budget” Ethics and Anti-Corruption Commission has been incompetent. Its new leadership has a real job to deliver.

Two, there is no payback to Kenyans for monies stolen, lost or squandered. If EACC’s recovery of stolen Kenyan wealth is 10 to 20 per cent of assets identified, we have a “Houston problem”.

Three, PAC’s work at the helm of our public accountability system is now on the precipice of “thieving, lay-about and ne’er do well” irrelevance (as columnist and great wordsmith Philip Ochieng amusingly observed of all MPS.

The CoB tells us that Jubilee’s second year budget for the national government was Sh1.8 trillion of which Sh1.3 trillion was actually spent. 

The other thing we are told is that government pending bills amounted to a record Sh112 billion (as against Sh17 billion the previous year), of which public debt was (Sh35 billion despite the Eurobond), Infrastructure (Sh20 billion), Devolution and Planning, and Interior (Sh6 billion each) and agriculture (Sh5 billion) were the main culprits.

We don’t yet have the auditor-general’s report on 2014/15.

And we know this was also the year of the National Youth Service and the Eurobond (both of which the auditor-general was supposed to have completed special audits for PAC by the end of January 2016).

Given the six-fold growth in pending bills — despite the Eurobond — and continuing questions around the bond as well as the NYS, it is fair to conclude that the auditor-general’s report will be quite scary.

Placing this in perspective

Year 2015/16 began with an ambitious budget that has been retrenched by lower than expected tax collections in a faltering business climate.

Kenya Power also received unexplained Sh2.7 billion payment from the Energy ministry. Over at the Ministry of Agriculture, a whopping Sh11 billion popped up in unexplained and un-reconciled expenditure books.

Smaller numbers matter too. Like the Sh85 million double payment to six ICT suppliers by both the ICT ministry and the Office of the President.

Then there was the Sh40 million spent on a non-operational entity known as the National Space Secretariat under the Department of Defence.
Overall, this entity has received internal budget allocations of Sh2.2 billion in the four years to 2013/14. 

Interestingly, the Cabinet recently approved a “National Space Agency”, five years after the fact, and ignorant of the law, placed the Sh2.2 billion in allocations (not spending)!

But, pre-election 2016/17 promises another spending spree before we have full public accountability on both 2013/14 and 2014/15 in a way that is transparently systematic rather than perceptively selective. 

Three quick thoughts come to mind. As I have previously argued, it’s time we institutionalised public hearings on the auditor-general’s report.

Second, our key accountability actors — CoB, the auditor-general and PAC — need to step up their efforts, without fear or favour, absence of conflict of interest and with full public support. 

EACC has become a public relations “band-aid”, it exists but cannot deliver. Counter-intuitively, the police do a better job at investigating corruption (think poacher turned game keeper).

Third, even allowing for double counting, the numbers I quote add up to at least Sh200 billion (without the Eurobond).

Think about what we could have bought with Sh200 billion the next time you hear about a mega-project or populist pronouncement, or read the escapist “bluster” about cartels and “blather” about “people fighting me/us”. 

Then think about county governments’ calls for more cash to support truly ambitious development agendas.

It’s individual people who build or destroy a country, not machines or “group think”. 

“Cartels” is the latest excuse for corruption — and the lack of accountability — in our country.

The truth is that Kenya will never develop without a public and official mindset that respects and demands accountability for promises made. All the signs suggest that we need this much more today than at any other time in this country’s history.

Mr Kabaara is a management consultant. dkabaara@gmail.co