Accountability at last!

After the tabling and debate of the report by the Joint Parliamentary Committee investigating discrepancies in the Supplementary Budget, Parliament moved that the Supplementary Budget should be withdrawn and a forensic audit to be conducted.

Below is a message from the Partnership for Change who assisted in exposing the said inconsistencies, which at last count totalled Kshs. 10.7 billion.

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The Partnership for Change Report on Phase 1 of the Budget 2009 Campaign to save Public Resources for Agenda 4 of the National Accord.

The Partnership for Change is asking you to help us to campaign and encourage Kenyans to demand austerity measures and savings to be made in the June 2009 National Budget, by Government and Parliament. Money saved will be directed to the Development Budget. The Outcome will be to save approximately 200 Billion shillings, which if allocated to the Development Budget, will contribute enormously to Agenda 4 issues of the National Accord, such as unemployment, underdevelopment, starvation, food insecurity and impunity.

The Campaign entered its first phase with scrutiny of the Supplementary Budget. It is envisaged that we will save at the very minimum 10.7 Billion that is concealed in the Supplementary Budget. Further we anticipate that a forensic audit into the Supplementary Budget will also identify waste. Yesterday 13th May 2009 the Report Of The Joint Committees On Finance Planning And Trade and The Budget Committee On The Inconsistencies Contained In The Supplementary Estimates Of The Financial Year 2008/2009 was tabled in Parliament and was adopted by the House.

The Joint Committee Recommended that:
1. Since there are inconsistencies in the Supplementary Estimates, they should be withdrawn and correct estimates resubmitted.
2. An independent forensic Audit be done
3. The fiscal Management Bill be approved and enacted as a matter of urgency

The Partnership for Change is grateful to Hon. Gitobu Imanyara, and Hon. Paul Muite SC who availed invaluable time, advise and support at no cost whatsoever to the Citizens of Kenya, and with no partisan interest, helped us focus Parliament on their duty to those they represent. Our gratitude also to the Speaker of the National Assembly Hon. Kenneth Marende, who has been fair and just.

Finally to those Members of Parliament who sat in the Joint Committee and promised Citizens that they would exercise their oversight role and do the just and right thing. We achieved all our recommendations to the Committee in our submission to Parliament including odious debt such as Ken Ren, which you will see in the report of the Committee. We did not manage to obtain an apology from the Minister Of Finance to patriotic Kenyans that were are only doing their duty, but the Partnership for Change has been commended by both Chairs of the Joint Committee. Either way we are grateful to Parliament for doing their duty and in particular to our request that this matter should not adopt a political nature as public resources are serious matters.

The campaign will now move into its second phase as we advocate for 60% development budget allocations in the National Budget to be brought to Parliament in June 2009.

Read Full Report at http://blog.marsgroupkenya.org/?p=814

If the Kenya government was a business, it would have collapsed ages ago

"Why would a company hire someone that sleeps on the job, doesn’t complete assigned tasks and demands a hefty untaxed salary?" - Ken M. a Kenyan Entrepreneur, 16th March 2009

The global financial crisis has led to the closing down of many enterprises. Even the Business Daily today in its headline article “Global crisis wipes out call centre jobs” tells of the local BPO industry as being in jeopardy.

Recession-proofing

Indeed “recession-proofing” business has become a buzz word, even amongst local entrepreneurs. Key in the phrase on Google and you get a result of 4,790,000 website listings.

Ensuring that one’s business can swim the tide of global financial currents, means tightening belts, something that many companies are doing as seen in the number of industries laying off non-essential staff.

In line with this economic outlook, wouldn’t it also be prudent for the government that lives off earnings in the form of tax revenue from Kenyans also tighten its belt?

News stories such as lavish spending on tea and flowers are definitely not in tune with the times.

Mars Group Kenya, a local governance and accountability watchdog in a blog posted today “The Government of Kenya is Broke” has raised critical financial management inefficiencies being perpetrated with outright disregard to the Kenyan people. This coming at a time when the same government (which previously prided itself on being self-sufficient) has whipped out the begging bowl for donors to fill.

Scandals ranging from maize to oil continue unabated, whilst we business people are warned of imminent tax hikes. The grand coalition government seems to have a more voracious appetite in ensuring its parliamentarians are kept in the lap of luxury, whilst continuing to exert pressure on small businesses to pay taxes.

The Mars Group blog outlines several spending issues that if the Kenya government was a business, it would surely collapse.

For instance, the bloated cabinet of 93 Ministers and Assistant Ministers costs Kenyans billions of shillings annually. Out of the government’s budget, 24% goes to servicing external debt leaving 76% for services rendered to Kenya. Out of this balance, 85% is spent on recurrent expenditure (i.e. paying hefty salaries and buying the latest SUV’s) whilst only 15% is left for development.

It is this 15% of expenditure that is supposed to ensure that all Kenyans reach a point of financial stability, in order to pay (“as responsible citizens”) taxes.

One does not have to be an economist, accountant or even a high school student for that matter, to see that the flow of funds here is top heavy; whilst unfortunately it is small business entrepreneurs and lower income Kenyans consumers who bear the brunt of this parasitic government. Taxes such as VAT know no class barrier, thus we “watu wadogo” pay the same taxes as MPs who earn tax free allowances topping up high salaries.

No-brainer questions

The Mars Group blog proposes several reforms, which if given in advice to small business owners would seem a no-brainer: For instance,

• Why would a company have a bloated Board of Directors (i.e. cabinet) whilst revenues remain small?
• Why would a company hire someone that sleeps on the job, doesn’t complete assigned tasks and demands a hefty salary (untaxed!)? (our MPs).
• Why would a business owner retain the services of a financial officer when it turns out that money allocated for specific tasks (such as paying for free education) is diverted for other costs (such as buying maize)?
• How on learning that money has been siphoned out of the enterprise (Anglo-leasing style) by the same finance officer, would the business owner just let the matter drop; notwithstanding the fact that annually 24% of the business budget is religiously paid to external lenders?
• After finding out about the siphoning of funds, wouldn’t a prudent business owner ensure that such corrupt loans cease to be paid immediately?
• Wouldn’t an entrepreneur use legal redress so that the business doesn’t have to pay the corrupt loans?

Either way, remaining in the status quo would without a doubt crush the business before too long. The government is only lucky in that it gets free money from taxes without even having to pretend to offer adequate services.

That is until we finally demand that the government also tightens its belt.

Read THE GOVERNMENT OF KENYA IS BROKE: What Mwai Kibaki, Raila Odinga, and Parliament must do to deal with our current financial crisis