By Gitahi Ngunyi
A leading newspaper refused to publish an article that would have warned Kenyans during the presidential campaigns in 2017 that handshake partners Uhuru Kenyatta and Raila Odinga separately planned to plunge the country into the economic hardship facing the country today.
At the height of general election campaigns in June 2017, I spent a week poring through the manifestos of the two leading campaigns, Jubilee and National Super Alliance (NASA).
What I saw in those two documents send a chill down my spine. As an economic and finance reporter, I was already acutely aware of the alarming economic hole that Jubilee had dug the country into during Uhuru Kenyatta first term as president.
Yet what I had seen in the two manifestos was even more hair raising. There and then, I realized that Kenya’s goose economically was already cooked whether Jubilee or NASA carried the day on election day.
On the one hand, Jubilee manifesto promises required Sh5.4 trillion above the then national budget levels while NASA promises required Sh11 trillion above the budget levels of the time.
In other words, the country was set on a path to a mounting debt burden which would result to higher cost of living and a heavier tax burden for the citizens.
As a journalist, then working for the Jubilee Party affiliated People Daily Newspaper, I felt a special duty to warn the country of the looming danger through a digest of how much it would cost the country to finance the two manifestos.
But for some reason the article was not published.
Here is the original story that I had submitted.
‘By Gitahi Ngunyi
A Raila Odinga government plans to spend at least Sh11 trillion above the current government budget level over the next five years to execute its agenda for the country if he wins the presidency in the upcoming election, our analysis of Jubilee Party and National Super Alliance (NASA) manifestos shows.
Uhuru Kenyatta on the other hand would require an extra Sh5.4 trillion to deliver on the promises his Jubilee Party’s manifesto has made to Kenyans.
The top five drivers of spending plans in the NASA manifestos are projects the coalition has outlined to improve public welfare, drive industrialisation and connect the country through infrastructure.
However, it is the plan to build 1500 industrial parks that will be the most expensive project for the coalition.
Government owned Industrial and Commercial Development Corporation (ICDC) is currently constructing an industrial park in Eldoret at a cost of Sh3.8 billion.
This implies that if NASA were to build its planned 1500 industrial park, it would spend Sh5.7 trillion on just that one project.
The second biggest high spend project the coalition has proposed is the provision of water in Northern Kenya, Eastern, Rift Valley and Coast regions.
Essentially, this means that NASA would have to adopt all the multibillion projects proposed by the ministry of Water and Irrigations.
The projects include 57 water dams spread across the country. Estimated cost of one dam is Sh30 billion which means the projects would be completed at a cost of Sh1.71 trillion.
Universal Health Insurance Fund that the coalition has proposed in the third biggest spending plan.
At the current level, Kenya’s curative health is jointly financed by the public through out of pocket payments, government expenditure, donors and health insurance to a total of Sh301.8 billion.
In the manifesto, NASA says its government will finance the entire curative health needs of the country through the fund and a small contribution from the National Health Insurance Fund (NHIF).
As of June last year, NHIF medical claims amounted to Sh20.5 billion. This means that NASA intends to be spending Sh281.3 billion on curative health care annually or Sh1.4 trillion in five years.
The Free Secondary Education programme will also be a high cost affair. Currently, the average cost per secondary school student is Sh50,000 per year for a student population of 1.9 million.
To take the entire school bill, the NASA government will need to spend Sh95 billion annually or Sh465 billion in five years.
If it wins, the coalition has promised to take over and complete the second and third phases of Standard Gauge Railway which will be financed on loan from the Chinese government at Sh651 billion.
Another high spending NASA proposed project is building commercial aviation standard airports to ensure that all 47 counties can be accessed by commercial flights.
This implies the coalition will build 42 airports since five counties (Nairobi, Kilifi, Uasin Gishu, Kisumu and Isiolo are already served.
If the coalition uses Sh3.8 billion per airport as was used in Isiolo, the 42 projects will gobble up Sh126 billion to completion.
Like NASA, Jubilee top five big spend proposals are also on welfare and infrastructure.
The biggest gobbler of funds in Uhuru’s second term presidency will be the 57 dams at the cost as they would cost under a NASA government.
Secondly, Jubilee government says it plans to build two modern waste management systems per county.
A waste management system planned for Nairobi County Government has been projected to cost Sh20 billion. Jubilee would therefore need Sh1.88 trillion to complete the 94 waste management projects.
Like NASA, Uhuru’s government would spend the same amount of funds to complete the second and third phase of the standard gauge railway.
Under the Lamu Port-South Sudan-Ethiopia-Transport Corridor, Uhuru’s government plans three major infrastructure projects for the next five years. They include a railway linking Lamu and Mombasa, completion of Lamu Port and and Lamu-Isiolo Road.
But it is the completion of the 29 berths at the port that will have a heavy cost at Sh464 billion.
On welfare, the big spend under a Jubilee government will be on free day secondary school. In the current budget, the government has planned to spend Sh33 billion starting January next year. This means that in five years, it will spend Sh165 billion.
Public finance and policy experts have questioned the wisdom of the two political formations plans given that the financing strategies in manifestos are fuzzy.
Finance analysts at ABC Capital Johnson Nderi sees the big spending plans as an indication of the let down that Kenyans will have after five years irrespective of whether its Jubilee or NASA that win the elections.
Nderi says the two political formations are overpromising and will definitely under-deliver.
“All analysis should start from current financials and take into account sustainable economic growth which I don’t think they have taken into account,” Says Nderi.
Nderi says the proposals could have more strain on the economy if they were to be implemented.
“Already one can sense the economy is under some strain and these spending plans can only mean more debt (…assuming they will be public sector financed.) And there is every reason to believe that they will be because I can’t fathom a plan where private sector guys will put up industrial parks in some counties. There is simply no economic rationale for that),” he says
Governance and democracy expert Cyprian Nyamwamu says the proposals by the two formations as a flight of fancy and the manifestos “ambitious and unrealistic.”
“As a country now we must demand that we begin from essential projects and secondly the economically strategic that will spur private sector spending to create jobs and jump-start an economy that is in recession,” says Nyamwamu.
Nyamwamu worries that the big spending plans will more increase the national debt which has emerged as a major area of concern in the economy.
“The debt crisis is acute and borrowing-spending must be avoided. Even 2 trillion more is a killer. Both fiscal and monetary projections show that the economy is shrinking in contrast with a rising population where we have too many dependants,” says Nyamwamu.
Vincent Kimosop, a public policy expert at advisory firm, Sovereign Insight, is concerned that the manifestos were thin in explaining the financing strategies.
“Borrowing in Kenya is nearing unsustainable levels and revenue limits is nearing a stagnation levels. In my view, any of the two political formations will have to borrow to realise what is contained in the manifestos,” says Kimosop.
However, Kimosop is hopeful that Kenya can comfortably fund the big spend budgets.
He argues that what is required is good macroeconomic management and also curbing of wastages/leakages and corruption it is possible to fund such projects.
“This is because sustainable debt is fine and complemented by improved economy that leads to more tax collection can get us there,” he says.’