Musa Radoli @PeopleDailyKe
The uproar triggered by introduction of 16 per Value Added Tax (VAT) on petroleum products, later revised to eight per cent, sharply brought into focus the expenditure incurred by top government officials.
This is happening when the country is reeling under the weight of more than Sh5 trillion debt load with 2018/19 financial year budget standing at more than Sh3 trillion, the highest spending plan in the country’s financial history.
According to the National Treasury, slightly over half or Sh1.74 trillion will be raised from Kenyans by Kenya Revenue Authority (KRA) and through government fees while another Sh558 billion will be raised from domestic and external borrowing.
The budget hits ordinary consumers the hardest through increases in taxes on essential goods and services, including the eight per cent extra tax on fuel. The holder of the country’s purse has gone on record asking Kenyans to “tighten their belts” in view of difficult economic times.
However, it has emerged that Cabinet Secretaries, Principal Secretaries, senior government officials and State corporations’ CEOs are still living in the lap of luxury, chauffeured in fuel guzzling official government limousines whose engine capacities are beyond 2,000cc.
As Kenyans continue to dig deeper into their pockets to pay for taxes, People Daily has established that official cars used by most of the Cabinet Secretaries are the fuel-guzzling Toyota Land Cruiser V8s whose engines’ capacities range from 4,500 cc to 6,000cc.
For instance, Toyota Land Cruiser V8 petrol of 4,700cc consumes at least Sh375 fuel on a one-way trip from city centre to Jomo Kenyatta International Airport (JKIA) Terminal, an estimated driving distance of 20 km. Volkswagen Passat Saloon petrol car with a 1,400 cc engine capacity on the other hand consumes Sh150 for the same distance and journey. Cabinet Secretaries and governors have a convoy of up to three top-of-the range vehicles.
This financial year’s budget estimates went up by about 10.83 per cent compared to last year’s which totalled Sh2.77 trillion. The biggest chunk of the Sh3.074 trillion will go towards funding the functions of the national government (Sh1.6 trillion).
Another critical area, the Consolidated Fund Service, will receive the second biggest allocation of Sh962 billion. Yet top government officials have the notoriety of throwing well-meaning austerity measures – critical if government is to meet rising financial demands on it – to the four winds.
Treasury says the government currently has the immediate task of repaying more than Sh700 billion it borrowed from commercial financial institutions among many other crippling financial demands.
However, the biggest irony is why top government officials remain extravagant while undertaking official duties and not tightening their belts, so to speak, to set the example for the ordinary Kenyan who pays for those bills through the nose.
An insider at a leading motor dealer, which supplies and services almost all fuel guzzlers, said these vehicles have to be serviced at least after three to six months. The source who spoke anonymously because of the sensitivity of the matter said the government pays bills of more than Sh150,000 per vehicle, adding that this is just a conservative estimate.
This involves more than 100 four wheel drive luxury vehicles, the source said, adding that the higher the vehicle’s cc (cubic centimetre), the more expensive are its parts when it comes to servicing and replacement.
Austerity measures to cut down government expenditure were first introduced in the country during retired President Mwai Kibaki’s tenure, when as minister for Finance President Uhuru Kenyatta was forced to walk a tight rope as he ran an economy on leaky public coffers.
Uhuru tried to implement some measures of austerity at the Treasury with limited success. He suggested that ministers and high ranking officials downgrade to vehicles with lower engine capacities and mooted the idea that parliamentarians should pay tax.
That is when he introduced the Volkswagen (VW) Passat saloon cars with a less than 2,000 cc engine capacity to replace the then government expensive fuel guzzling official limousines for cabinet ministers and high ranking government officials. However, all these have been thrown to the dustbin over the years.
Most of the vehicles were Mercedes Benzes, Range Rovers, Volvos, Toyota V8, Lexus, stretch limousines among others. They were supposed to be grounded and auctioned. Proceeds were to go to the National Treasury to support government’s spending plans.
Like anywhere in the world, the government is the biggest spender. But with revenues shrinking and running out of room to borrow more to fund an expensive budget, it may not have much choice but to once again introduce and enforce strict austerity measures.
Speaking before Senate Finance and Budget Committee early this year, Treasury Cabinet Secretary Henry Rotich said senators needed to reduce county budgets by up to Sh18 billion.
“If you were to tell us to disburse 100 per cent, the Judiciary, Executive and Parliament also want their full share and I can’t get the revenues and you do not want me to touch borrowing, it’s impossible. I mean something must give”, he told members of the committee who wanted to know why Treasury had not released money to counties.
Principal Secretary Kamau Thugge admitted that Kenya has hit its maximum stock of debt this year and needed to start climbing down.
This brings in the question of potential impact if fuel-guzzling cars were to be sold as part of austerity measures to cut expenditure right from the national to county governments.
Or if top government officials were made to use economy and not first class options on air travel, hotel accommodation, meals and entertainment reduced to middle level instead of five-star and beyond hotels – can this have an impact?
Economic and financial experts see debt as cycles where you get a boom when the money comes in but a rough patch when you have to pay, a pain Treasury has been avoiding as it took more loans to pay older loans rather than rely on organically generated revenue.