Kenya: More Mouths for a Shrinking Cake

Luke Mulunda

8 June 2011

Nairobi — For a man used to longer-hauls, the 500-metre walk from Harambee Avenue to Parliament was a short affair.

But the walk was special, a political statement on the ranking of Finance Minister Uhuru Kenyatta within the Cabinet.

A Finance Minister and Deputy Prime Minister is the most prominent minister. He is also a politician and a fan of the President.

But Wednesday’s Budget was different. Instead of reading the normal Budget Speech — the most watched TV show after the football World Cup — he read a ministerial statement as punishment for ignoring sections of the new Constitution.

Even the pomp and colour spiced with a red carpet were missing.

Prestigious docket

It’s understandable why the Finance Minister is such a prestigious docket.

The Budget is the oil that lubricates government engines and determines how all Kenyans live. Whoever controls it literally pulls the purse strings.

Mr Kenyatta has not resisted all temptation to earn political points from the Budget. With an eye on the Kibaki succession, you cannot fault him for that.

In the PNU wing of the coalition, Mr Kenyatta stands out against others like Vice-President Kalonzo Musyoka and Internal Security Minister George Saitoti.

The son of Kenya’s first President Jomo Kenyatta exudes the confidence of a matured Finance Minister, dropping money jargon here and there.

During his first days, he was under fire, accused of “creating” an error in the estimates of Sh10 billion in the 2009 Budget.

But he not only survived, but also quietly gained influence, which he has used to press President Kibaki to support his economic policies.

His success at driving this agenda signals his status as one of the President’s closest economic advisers.

The policies he makes — and the balance they strike between slashing deficit and supporting economic recovery — could ultimately determine President Kibaki’s economic legacy.

There is only one Budget before the General Election in August next year, and Wednesday’s was a key campaign platform for Mr Kenyatta who, as indicated in the estimates, has gone flat out to lure the youth with a Sh1 billion allocation for small and medium-size enterprises, as well as marginalised sections of the community like orphans and senior citizens.

He has doled out Sh840 million for bursaries and Sh230 million, respectively, to improve their lot.

“Our commitment to improving the lives of our people is steadfast,” Mr Kenyatta said when he released the Budget estimates last Wednesday.

But Mr Kenyatta is caught between growing demands for cash and a shrinking revenue base. The government has expanded and only tough maths and accounting can balance his books.

Kenya Revenue Authority’s collections are below target for the fiscal year ending June 30 and, with the economy reeling under high inflation and a drought that has cut food output, expect not just a more no-nonsense taxman, but also a frugal, meaner Finance Minister in days to come.

The Ministerial Statement and subsequent debate will give Mr Kenyatta a much-needed break from The Hague blues.

He is among six prime suspects facing trial at the ICC — accused of playing a prominent role in the post-election violence over the 2007 disputed presidential election results.

The case hangs precariously against his presidential ambitious, alongside his co-accused, Mr William Ruto, the suspended Higher Education Minister.

He hoped to appease communities displaced by the violence by allocating money to resettle those still in IDP camps and squatting on government land.

Even then, Uhuru stands tall with a number of firsts. He has consistently delivered record-high budgets — the current one at Sh997 and the 2011/12 at Sh1.155 trillion.

He is also the first of two to hold the position of Deputy PM, a feat he shares with Mr Musalia Mudavadi.

He is also the first and only Cabinet Secretary under the new law, as his PS Joseph Kinyua was sworn in a member of the Revenue Allocation Commission, thus committing Treasury to the new order.

And that’s where the Budget problem comes in. While already operating under the new Constitution, he skipped a key process: submitting estimates to Parliament two months before the end of the financial year.

And, of course, the dubious distinction of being the first Finance Minister in recent history to fail to read the traditional Budget Speech on Budget Day.

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