We are seeing the difference between ‘Rutonomics’ and ‘Uhurunomics’. If President Uhuru Kenyatta was the spendaholic who drew up budgets to fit his whims and fantasies rather than available resources, President William Ruto at least seems to have an appreciation of the basic fact that the budget is inelastic.
He started virtually on day one of taking office by ending the expensive petroleum subsidy. That was a brave and necessary measure. It, however, carries the risk of confounding the faithful who might have been foolish enough to believe campaign promises that his first act would be to reduce fuel prices.
Then in his address to the inaugural joint sitting of Parliament last week, President Ruto directed the National Treasury to cut government expenditure for the current financial year by Sh300 billion—a sizeable slice of the Sh3.3 trillion budget, of which nearly Sh1 trillion is projected to be financed by borrowing.
That was just for starters; he wants further cuts in coming budgetary cycles so that, in three years, the recurrent budget of Sh2.5 trillion will be met through government revenues, not deficit financing.
That is a worthwhile goal, which signals some brutal belt-tightening all round. If we want to help the President to restore sanity in budget-making, we all have to accept the uncomfortable realities.
Far from having unlimited cash to throw at hustlers, youth, women, small business, farmers and all the other myriad interest groups that bought into the Kenya Kwanza campaign rhetoric, we will be looking at spending cuts.
Sh300 billion
However, it is one thing for the President to order Sh300 billion reduction in spending but quite another for Treasury boffins to figure out what and where to cut. And then the additional headache of persuading MPs to pass a reduced budget when they are more intent in safeguarding their own perks and allowances.
The President can send a powerful message if he led by example. State House has an obscene budget whose administration systems are opaque. Over the years, it has been obvious that much of that allocation is skimmed off into private pockets but the Auditor-General and the anti-corruption agencies dare not ask questions.
President Ruto can start by directing drastic reduction of his own budget and opening it up to scrutiny so that untouchables in the inner circle no longer have the licence to steal. He can then move aggressively to contain the insatiable greed of MPs, who have traditionally blackmailed the sitting president by blocking passage of key budgetary proposals if their allowances are affected.
Tighten their belts
It was disappointing that, when telling Parliamentarians of looming budget cuts, President Ruto did not mention that they, too, have to tighten their belts. In fact, he was promising them more lucre in assurances that the National Government Constituency Development Fund (NG-CDF) for Members of the National Assembly remains despite the Supreme Court having declared it unconstitutional.
He also promised senators some new fund, supposedly to provide oversight of county government expenditure.
President Ruto will not achieve his goal of fiscal discipline if, from the very beginning, he is bribing MPs with public funds instead of confronting their greed. If at this early stage he shows that he is helpless, the President will forever be hostage to venal characters more interested in securing their personal interests than serving the national good.
The President must proceed on the basis that he was elected by seven million voters, and that he is beholden first and foremost to all 50 million citizens of Kenya over and above the grubby interests of a few hundred pampered individuals.
Should the MPs threaten to shoot down his government’s budgetary estimates, the President must take his case to the people. It’s the ordinary men and women he must help to understand that it will not be possible to deliver on some campaign promises immediately, and things will get worse before they get better.
The President must also take the lead in pushing cost-cutting that is more than just cosmetic. A lot is being made of the fact that extraneous allowances, over and above salaries, make up such a large chunk of the government’s bloated wage bill.
However, cutting allowances is a band-aid solution to a very serious gangrene. If the President is, indeed, serious about reducing expenditure, he must have the cojones to force through a serious amputation of excess government staff as well as closure of entire units that no longer serve any purpose.
Only then will he free the funds to balance the budget and spare something for ‘hustlers’, which will enhance his 2027 political prospects. BY DAILY NATION