Financial discipline has emerged as the single-greatest weakness of the Jubilee administration. For the past six years, the government has perfected the art of consumption but, unfortunately, of borrowed cash. The result is a heavy debt burden estimated at Sh6 trillion, which puts the country on a dangerous slide towards economic meltdown. In the circumstance, the only way out is drastic cost-cutting measures.
This is precisely the path Treasury Cabinet Secretary Ukur Yatani has chosen.
He has made the bold decision to cut the budget estimates for the 2020/21 financial year by more than Sh100 billion — from the current Sh2.8 trillion to Sh2.7 trillion. The minister is also keen to reduce budget imbalance to Sh571 billion, down from Sh721 billion.
Clearly, his consideration is that the government has to live within its means.
Consecutively, for several years, the Kenya Revenue Authority (KRA) has failed to meet its tax collection targets.
During the 2018/19 financial year, for example, KRA collected Sh1.58 trillion against a target of Sh1.72 trillion, which target was even reviewed downwards to Sh1.64 trillion.
With such kind of revenues, the government has had to operate huge deficits, a trend that has had a negative impact on the economy.
This time round, Mr Yatani has embarked on some encouraging decisions. First is shrinking expenditure and forcing the government to spend only on necessities.
Non-essential costs like entertainment, travel and workshops are being shot down. Second is cost-cutting and pushing departments to avoid wastefulness. Third is prudence and, fourth, reducing borrowing.
The challenge, however, is execution. Most of these lofty ideals risk remaining on paper. Some of the quick wins in this campaign include taming government expenditures on travel.
It does not make sense why top government officials have to travel in large convoys and surround themselves with hordes of aides or continually hop from one hotel to another for workshops and meetings. Also, it has to cut its workforce to contain wage bill.
Moving forward, Mr Yatani has to work with government agencies such the Directorate of Criminal Investigations and the Ethics and Anti-Corruption Commission to rein in the corrupt.
Billions of shillings are lost in corrupt deals, mainly infrastructure and capital development. He also has to institute strict measures to check on development projects to ensure value for money.
Looked at broadly, the Treasury is working on a realistic financial plan and the imperative is for all government departments and counties to cut expenditures. These are depressed economic times, which demand drastic and painful decisions.
