By Peter Wanyonyi
It is political manifesto time, and our politicians are in overdrive with their promises of economic paradise over the next five years – but only if they are elected to office. The grand promises contained in the rival manifestos of the two leading political camps are an exercise in economic dreaming – but you cannot accomplish anything if you do not dream. The question, then, is – even if we assume the dreams are plausible, what is the true cost of it all? The devil will be in the details of implementation.
Each manifesto always has a signature promise, a catchy pledge that personifies the mood of the manifesto and the ambitions of the political party. In the case of Raila Odinga and his hangers-on, it is the promise to implement a social protection programme that will see “needy families” receive a monthly welfare payment of Sh6,000 each.
Presenting the plan on 28 June, Mr Odinga reckoned that 2 million families live under the poverty line, and that the bill for the programme would thus be about Sh12 billion per month. Asked where the money would come from, he said, “the loopholes of corruption” that President Uhuru Kenyatta has claimed are costing Kenya over Sh 2 billion daily. Will he seal the loopholes?
The true cost of the programme becomes clear when one looks at the promise in detail. The corrupt do not walk into the Central Bank of Kenya and withdraw Sh2 billion a day! That public money is lost in “small deals” and procurement quid pro quo arrangements all around the government and the civil service.
The optimism in Odinga’s assessment that Kenya is “under-collecting revenue and over-spending” is almost laughable to behold, and he must have a very short memory if he thinks we haven’t watched this movie before.
In 2002, the late President Mwai Kibaki made the same observation and the same promise, to collect more revenue, seal corruption loopholes, and thus deliver a budget surplus to invest in social safety nets. He failed – and Odinga was part of that government, and so should know better.
Mr Odinga and his team will therefore not be able to seal the corruption loopholes they are flippantly promise to close. However, he will want a second term in office (all Kenyan leaders do) so he will need to fulfil this promise, and that will mean more debt. To make the social welfare plan work, Kenya will have to borrow the required Sh 144 billion a year from somewhere – throw in administration costs and the figure easily hits Sh 150 billion a year, and that’s before one accounts for the inevitable losses due to corruption. And hope desperately that economic activity somehow generates the money needed to repay the loan. Would it? Evidence suggests otherwise.
Kenya currently pays a total of Sh74 billion a year to Chinese lenders for Uhuru’s infrastructure loans. There’s evidence that the country is struggling to repay this debt, which now makes up over 80% of the Sh90 billion that Kenya spends on servicing bilateral debt.
Indeed, Kenya recently applied to Chinese lenders to have the debt-servicing suspended, as the strain on the economy is such that we are unable to meet this repayment schedule in the long term. Imagine, then, how much worse the situation would be if an additional Sh 150 billion was added to the national debt every year. The country would quickly head down the road recently experienced by Sri Lanka, with economic collapse and complete social upheaval following on. And this is just one of many manifesto promises in Raila’s election pledges – add the likely costs of the others and the mountain of debt Kenya would have to incur is astronomical.
William Ruto’s manifesto has the significant advantage of going to some detail on each promise, perhaps a result of the Deputy President having the advantage of civil servants working on his election. Ruto promises to make Sh 50 billion available as credit to the informal sector. Curiously, despite going to extensive detail on its other promises, the manifesto is silent on this critical pledge. How often will the credit facility be provided? Is it a one-time deal? And, is it on an annual basis, or monthly?
The manifesto is suspiciously silent on this, and that is a worry. It cannot be that the crafters of Ruto’s manifesto went to such significant detail for the other promises on their campaign platform, but somehow overlooked the detail required for one of their signature promises. The absence of detail indicates that the pledge was either included in a hurry, at the last minute – perhaps to counter Odinga’s social welfare programme proposal. Or, the lack of detail is deliberate because more information would raise significant concern.
As with the Odinga manifesto, Kenya would need to borrow significantly if Ruto was to deliver on his manifesto promises. The extent of the borrowing would be unclear, because the manifesto rather conveniently omits duration-related details in its promises. This is careless if accidental, but is a warning sign if deliberate. About the only thing one takes away from it is this: it would increase our debt, and therefore our repayments.
Bilateral loans in Kenya always have the effect of increasing corruption, such is the careless abandon with which we spend borrowed money. The pain of repayment is forgotten as our connected fat cats allocate government tenders and preferential contracts to themselves and their friends and relatives, with the long-suffering mwananchi left to bear the burden of the consequent inflation and repayment pinch.
There is little doubt that the ambitious promises contained in the two leading manifestos will, if either is implemented, unleash a torrent of sleaze that would make previous corruption scandals look like small-time heists in comparison. It is Kenya’s curse to be blessed with leaders who got rich by stealing openly, and it is a further curse that our citizens do not let this little detail get in the way of their political choices. This political season, as with all others, our leaders’ promises are nothing but lies. And it is in these lies that the true cost of the election lies..
— The author is an information systems professional.
