Coalition budget a failure in reforms

Those who expected the grand coalition government to herald a new era of economic governance will be disappointed with themselves. The National Accord which ended the deadly post-election crisis, with leaders committing themselves "to set the country on a new path,” may be the loser as Kenya treads the known path.

Last week's Budget, the first in post-crisis Kenya that followed on the heels of a re-launched Vision 2030, was consistently good intentioned but weak on poverty-alleviation goals of the vision. There were a few alterations from previous texts, including a new tax for MPs and judges, but wholly it broke no ground in the pursuance of equity, reform and essential transformation that ODM and PNU committed themselves to only a few months ago.

While failing to cater for badly-needed constitutional reforms promised before the next year, the Budget customarily ignored marginalised areas, allocating Sh2 billion for the development of Northern Kenya. It did not launch any pro-poor plan nor moderate the Kibaki era's supposed neo-liberal policies which disguise an economic growth that inherently marginalises the majority.

Constitutional and political reforms may reverse the unfair economic order that exists in Kenya, but the budget provides the avenue of channelling resources in the pursuance of welfare goals. Not once, Kenya has experimented with corrective programmes under the existing unfair order. Recent cases are constituency Aids funds and rural electrification.

Last week, Finance Minister Amos Kimunya supposedly aimed at restoring economy to boost long term growth; creating jobs for the youth; reducing poverty; and improving human development. He may have achieved the first, maintaining tax breaks to business and funding the police to protect them. For the poor, however, he retained a high income tax of recent years at a time of mad prices. A combined Sh1.1 million for youth fund and ICT projects cannot possibly create the millions of jobs that youths need.

Kenya will spend Sh760 in the next year, three quarters of it on recurrent costs made worse by a bloated cabinet. The recurrent expenditure will service endless debts, run government operations and pay civil servants (one percent of the population). Even the modest development share will do little for those most in need of better life. It will most likely be spent on a few, politically expedient projects at grossly inflated cost.

From experience of the recent past, part of it will be tied up in some accounts by time of the next budget, there being no projects thanks to corrupt procurement. None of the Narc government's grand projects has gone to completion even though they got allocations each year, most notable being Kisumu Airport upgrading, the Isiolo-Modogashe road, Mombasa-Nairobi dual carriageway and Kenya Meat Commission. From an initial cost of Sh800 million, JKIA's upgrading now cost Sh10 billion.

On Friday, amid fresh questions over a suspect currency-printing deal he sanctioned at the height of last year's electioneering, Kimunya gleefully confessed that the Treasury lost Sh32 billion over the last two years in inflated bills. This theft represents nearly a quarter of the development budget between 2006/7-2007/8 financial years.

At a critical moment, what this budget achieves is entrench the extreme economic system which nearly cost us a country in January. Kimunya acts as if a few alterations here and there will make the hideous straitjacket of economic apartheid fit better. There was never any true prospect that he or President Kibaki, being pillars of the ruling elite, would shift resources towards the poor. They never did over five years, but surely this could change with the Accord and grand coalition.

More than anything else, Kimunya's third budget calls upon Parliament to urgently set up mechanism to guide the budgeting process. Recent, IMF-aided budget reforms have achieved significant predictability, economic growth, and revenue forecasting, but the gains are being neutered by graft which causes disparity between spending and budgeted cost. Few will be surprised if, next year, Kimunya seeks supplementary Sh100 billion and MPs easily pass it.

In America, House and Senate committees enjoy total oversight over all public affairs. Any department secretary they summon does not fudge like Kimunya did to MPs over Grand Regency sale. What is at stake is Kenya's democratisation. The election crisis was such a grimy reminder of the alternative.

The writer is an international journalist based in Nairobi