[CofekDigest] Statement on President Kenyatta’s Rejection of Finance Bill, 2018

Dear All,

We welcome President Kenyatta’s explanation of why he rejected the Finance
Bill. We, however, do not agree with him. He has missed the point. His
prescriptions are informed by a wrong diagnosis of the problem.

The issues are that the manner we craft our national budgets is wrong. The
consumer versus production budget aspects are fluid and do not come out at
all. We rely on non-existent revenue to approve huge and unnecessary
expenditures. Second, a third of our budget goes to financing corruption and
dubious pending bills.

Third, incessant over-borrowing appetite has got the country into repaying
in excess of Sh70 billion monthly. That borrowing has been extended to more
than 5 key local banks which are involved in corruption as evidenced on the
NYS scam. Fourth, the Foreign Direct Investments are dwindling. Fifth, the
tax base keeps declining.

Sixth, the fiscal policy remains in sharp clash with the monetary policy.
The two do not speak to each other over their incompatibility.

We had hoped President Kenyatta would sign the Finance Bill 2018 as is and
then call for review of the budget. The areas to cut budgets include
non-revenue capital expenditures; a freeze on building the Standard Gauge
Railway extension and a more serious and non-selective corruption fight.

We are for instance disturbed that President Kenyatta’s own relatives around
him in State House have not been prosecuted long after they confessed to
serious corruption. Countless parastatal bosses accused of corruption remain
untouched. Some buildings standing on riparian land and road reserves are
untouched. Until President Kenyatta stops double-speak on the fight against
corruption, Kenyans should never trust him on corruption onslaught.

From the foregoing, we urge all Kenyans from all walks of life to urge their
MPs to show up in Parliament and defeat proposals by the President. Removal
of tax on fuel, like retaining interest rate caps, should not be negotiable.
The idea of reducing tax to 8% makes little impact.

Finally, we maintain that for the turnaround of our economy, the President
must move with speed to make management changes at the National Treasury.


You can also find the statement on our website:

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