Kenya living beyond its means, says revenue agency

CRA Chairman Micah Cheserem (Right) and Vice Chair person Fatuma Abdulkadir

Commission on Revenue Allocation Chairman Micah Cheserem has said Kenya is living beyond its means.

Mr Cheserem, who is a former Central Bank of Kenya governor, said the country needs to embrace austerity measures immediately.

Cheserem told members of the National Assembly’s Liaison Committee that there is need to cut spending starting from State House.

“We are living a lie, and somewhere down the line we must ask ourselves if we need 2,200 MCAs,” Cheserem said during a budget-making meeting with MPs.

Among the expenditures he wants eliminated are allowances paid to senior government officials and elected leaders, including legislators, and instead grant them consolidated salaries. “We must go for austerity measures starting from the Head of State. If he has to travel, then the delegation must be reduced,” he added.

His caution is pegged on the level of debt that the country has taken up and the proportion of the annual budgets that are directed to servicing the loans.

Kenya is already spending 29 per cent of the collected revenue on domestic and foreign loans - just below the 30 per cent mark that is considered dangerous. Official data indicates Kenya’s debt is more than Sh3 trillion, split equally between domestic and foreign loans.

National Treasury Cabinet Secretary Henry Rotich yesterday sought to dispel the fears that the level of debt had gone out of hand, describing the current debt as sustainable. His only concern is the amount of exports from Kenya for the international market.

“We should be worried that we are not exporting enough to earn foreign currency, which we then use to pay the foreign loans,” Mr Rotich told the committee.

Members of the committee had a long wish list which the CS said could not all be accommodated. Rotich and Cheserem were meeting the MPs in separate sessions to discuss the upcoming national budget, specifically how much should be granted to counties. CRA, the Treasury and the governors’ lobby have differed in their proposals.

Cheserem pleaded with the Committee to push the Treasury to increase the allocation to Sh377 billion.

Rotich is, however, proposing to give counties Sh298 billion, including Sh4 billion to be shared by five counties that do not have headquarters.



By Moses Michira