The debate on the need for a referendum is at fever pitch and signs are Kenya will have a plebiscite at some stage to review sections of the Constitution, especially to reduce over-representation.
While this is a positive move, the underlying issue in the debate should be focused on one thing and one thing only: By what percentage do we intend to reduce government and how do we seamlessly achieve that without much disruption to devolution?
It is important for all the parties concerned to focus on referendum with the aim of reducing the size of government. This is necessary because it was clear during the weekend that it is very possible to carry out a referendum and not reduce the size of government – and in fact increase it – as politicians jostle for the creation of new positions.
With such kind of debate raging, it is possible to miss what led to the calls for a referendum in the first place as politicians hijack the debate to their own gain. A referendum could in fact result in a much more expensive government as new positions are created, especially at the top.
That would beat the purpose of the popular vote and a more expensive government would have achieved the opposite of the intended calls.
It is important that those guiding the referendum debate ask themselves the following questions: Which of the posts as currently constituted are least effective in terms of delivering the greater economic good? Which posts do not make economic sense to continue having? Which posts do we expressly do away with?
Which posts can still be merged and Kenyans continue to enjoy the greater good without the import of a heavier tax burden? Do we need all these counties? Do they all make economic sense? Can Kenyans agree to merge some and still be on a better economic footing?
The underlying principle guiding the calls for referendum must be firmly guided by the fact that the government as currently constituted is too expensive to maintain and that there is need to do away with some levels of representation, to trim the levels of expenses to match the levels of tax revenue.
Kenya’s call for a referendum on the constitution must be guided by our debt to tax revenue figures. Why, you may ask?
Here are a few pointers:
A few weeks ago at a forum called by one of the organisations, whose interest is on the debt burden to the common mwananchi, an interesting perspective arose. The argument bordered on three key ratios that are floated in the press lately ever since the unsustainable debt debate became a topical issue.
The one ratio that dominated the debate was the debt to (tax) revenue ratio.
This is the ratio that gives an impression of what amounts of tax revenue that the government collects goes to service debt. It is important to note that this ratio is directly affected by the high level of representation (expenses) that do not in themselves generate any revenue and have to rely on the national government for their existence.
As a result, the government has to go into debt to sustain such positions. No one would have an issue with such positions if they were self-sustaining.
Figures indicate that debt to revenue ratio stood at 35 per cent last year more than double what it was in 2012. In the financial year 2017/2018, an estimated Sh658 billion will be paid to service loans.
This translates to almost 50 per cent of the tax revenue. This is unsustainable in both the short run, medium term and in the long term and must be reversed.
The writer is an economic researcher. Email: [email protected]