Treasury CS John Mbadi states Kenya can manage its external debt if corruption is reduced by half, saving about Sh365 billion annually. He proposes reducing the number of counties to improve efficiency and highlights the high wage bill and loan repayments as significant financial burdens.
Kenya could effectively manage its external debt if the government successfully reduces corruption by half, according to Treasury Cabinet Secretary John Mbadi. He made this statement while defending the fiscal strategy of President William Ruto aimed at enhancing revenue and decreasing unnecessary government expenditure. Mbadi highlighted public procurement as a significant area afflicted by financial losses due to corruption.
The introduction of e-procurement was emphasized as a potential remedy for the approximately Sh2 billion lost daily. Mbadi mentioned in a light-hearted manner that reducing theft by 50% could save the country around Sh365 billion annually, which exceeds the Sh280 billion in external debt due in 2025.
“If we are stealing Sh2 billion per day as an economy and we make a conscious decision to steal just a billion… we would save Sh1 billion per day,” said Mbadi. Such savings could finance the nation’s debt without the need for external loans.
Beyond corruption, Mbadi criticized the current devolution structure, claiming that the financial burden of 47 counties is unsustainable due to high wage costs. He proposed restructuring Kenya into a maximum of 14 regions to reduce bureaucracy and improve financial efficiency.
Mbadi pointed out the excessive number of employees in counties, stating, “You find directors of fishermen, boda bodas, music, and culture… We have so many people.” He argues that a leaner governance system could help address financial challenges.
The monthly wage bill for the national government is Sh80 billion, totaling nearly Sh1 trillion annually. When combined with Sh1.1 trillion in loan repayments, these costs severely limit available funds for development initiatives. “We are collecting Sh2.5 trillion and spending about Sh1.1 trillion on loan repayment. So where do you get money for development?” Mbadi questioned.
In summary, Treasury’s John Mbadi asserts that if Kenya curbs corruption by 50%, the nation could repay its external debt and improve its fiscal landscape. He also advocates for restructuring the devolved government system to increase efficiency and cut costs, asserting that the current structure is overly bureaucratic and financially burdensome. The proposed changes aim at better governance and financial sustainability.
Original Source: www.capitalfm.co.ke
