Kenya has banned all state officers from sitting on the boards of parastatals as independent directors as part of austerity measures to curb further wastage of revenues in a bleeding economy weighed down by massive corruption, excessive spending, ballooning public debt and declining revenue collections.
In a circular to the Attorney General, all Cabinet Secretaries and Principal Secretaries dated October 18, 2019 seen by The EastAfrican, Head of Public Service and Chief of Staff in the Office of the President, Joseph Kinyua, directed the officers to relinquish their positions.
“As previously stated, public officers should not be appointed to serve as independent members unless the enabling law specifically provides for the same,” he said.
According to the circular, alternate directors who represent ministries and other government agencies in the boards of state-owned corporations must be competent and individuals with integrity to secure the anticipated performance and service delivery objectives of these institutions.
“Consequently, selection of alternate directors should be on the basis of subject matter expertise, knowledge and experience and be persons of integrity,” said Mr Kinyua.
“The selected officers should be senior personnel (Job Group ‘P’ and above) and well versed with the government policy of the particular sector and functions of the agency. Designated officers in lower job groups than prescribed should receive the express approval of this office (Office of the President) prior to appointment.”
The latest move comes after acting National Treasury Cabinet Secretary Ukur Yatani announced radical measures to reduce government spending that include reduction in the amount of money spent on state advertisements, phone airtime, newspapers, government delegations for foreign trips and vehicle purchases.
Mr Yatani also suspended benchmarking tours by state officers and restricted the number of people accompanying a Cabinet Secretary on a foreign trip to four while that of the Principal Secretary to three.
These measures are meant to free more resources to meet the government’s emerging expenditure pressures and finance development programmes particularly President Uhuru Kenyatta’s Big Four agenda on food security, affordable housing, manufacturing and universal healthcare.
It is estimated that Kenya loses close to a third of its annual budget on corruption alone putting the figure at Ksh1.04 trillion ($10.4 billion) going by the increased budget of Ksh3.13 trillion ($31.3 billion) for the 2019/2020 fiscal year.
According to the Office of the Controller of Budget recurrent spending by government ministries, departments and agencies during the first quarter (July-September) of the current 2019/2020 fiscal year stood at Ksh235 billion ($2.35 billion) of which a bulk of it estimated at Ksh98.8 billion ($988 million) went towards paying the salaries and allowances of government employees.
Transfers to Semi-Autonomous Government Agencies was the second highest expenditure category at Ksh91.3 billion ($913 million) followed by domestic travel Ksh2.2 billion, ($22 million) and foreign travel (Ksh1.4 billion, $14 million). However only Ksh99.7 billion ($997 million) was spent on development programmes during the period under review.
Kenya’s public wage bill takes about 48 per cent of the country’s total revenue collections.
The country’s economic performance declined to 5.1 per cent in the third quarter (July-September) of 2019 compared with 6.4 per cent growth in the same period in 2018 largely due to the underperformance of key economic sectors such as agriculture, manufacturing, construction and transport, according to the Kenya National Bureau of Statistics (KNBS).
The government has already increased its spending plan for the current financial year exposing citizens to more taxation and borrowing.
In November last year, the National Treasury released its initial supplementary budget for the 2019/2020 fiscal year in parliament seeking an additional Ksh86.6 billion ($866 million), which effectively increased the budget for the 2019/2020 fiscal year by 2.8 per cent to Ksh3.13 trillion ($31.3 billion) from Ksh3.04 trillion ($30.4 billion).
Mr Yatani warned that implementation of the current budget faces serious challenges largely due to declining revenue collections and increased demand for additional funding to meet priority expenditures.
“The implementation of the 2019/2020 budget continues to face various challenges. These include the recent drought and floods in some parts of the country, under performance of projected revenues and the increased demand for additional funding for emerging priority expenditures,” said Mr Yatani.
Kenya’s revenue collection during the first quarter (July-September) of the current 2019/2020 fiscal year recorded a shortfall of Ksh84.6 billion ($846 million) comprising an underperformance of ordinary revenues by Ksh60.2 billion ($602 million) and the ministerial Appropriation in Aid of Ksh24.4 billion ($244 million).