Kenya could eliminate external debt through a 50% reduction in corruption, according to Treasury CS John Mbadi. He emphasizes reform in public procurement and critiques the unsustainable financial structure of the 47 counties. His proposal suggests consolidating these into a smaller number of devolved units, enhancing efficiency and reducing expenditures.
According to Treasury Cabinet Secretary John Mbadi, Kenya could effectively address its external debt if the government managed to reduce corruption by half. He voiced these insights while presenting President William Ruto’s strategy focused on fiscal consolidation that aims to enhance revenue and limit excessive government expenditures. A critical issue highlighted is public procurement, identified as a significant culprit behind financial losses due to corruption.
Mbadi emphasized the potential benefits of implementing e-procurement systems as a means to curb financial leakages. He referred to an alarming statistic regarding daily losses to corruption, which are estimated at Sh2 billion. Mbadi humorously remarked that a mere 50 percent reduction in theft could lead to savings of Sh365 billion annually, dwarfing the Sh280 billion external debt due in 2025.
The potential savings from curtailing theft would furnish Kenya with the means to fulfill its financial obligations without needing to seek additional loans. He explained that this annual saving surpasses the external debt, suggesting that enhanced financial governance could alleviate reliance on borrowing.
In addition to concerns about corruption, Mbadi addressed the unsustainable financial situation of the 47 counties in Kenya, attributing their inefficiency to bloated wage bills. He advocated for a restructuring of government into a reduced number of devolved units, suggesting a shift back to eight or a maximum of fourteen regions.
He critiqued the existing decentralized government structure, which he believes breeds unnecessary bureaucracy that siphons off public resources. Mbadi illustrated this inefficiency by highlighting the extensive staff employed at the county level, including numerous excessive and specialized roles.
Furthermore, he pointed out that the national government’s monthly wage bill is Sh80 billion, translating to nearly Sh1 trillion yearly. This expense, coupled with Sh1.1 trillion in loan repayments, limits the available budget for developmental initiatives, leaving governance and operational costs in a precarious state.
Mbadi’s comments have ignited discussions regarding the need for a comprehensive examination of Kenya’s governance framework, with the goal of increasing operational efficiency and reducing costs. His stance advocates for a leaner and more sustainable governing model that could effectively manage the country’s financial burdens.
In summary, Treasury Cabinet Secretary John Mbadi highlighted that reducing corruption by half could enable Kenya to meet its external debt obligations without further borrowing. He called for significant reforms in public procurement and the structure of devolved governments to improve efficiency and reduce costs. His insights underline the pressing need for comprehensive governance reform to stabilize the national economy and secure financial sustainability for the future.
Original Source: www.capitalfm.co.ke
