Private Sector or the Government; Who is Running the Show?

Posted by on 13th May 2017

Categories:   Uncategorized

With less than three months to the August polls everything looks as though we had no idea elections will be taking place this year. It’s not just IEBC that’s struggling to meet the tight election laws deadlines; National Assembly’s is stuck with the Election Laws (Amendment) Bill 2017 in the second reading. This Bill among other things proposes to deal with political party nomination challenges which is already a done deal. IEBC should be receiving party list of nominated candidates on Sunday 14th May. Meaning though on the order paper this Bill if signed into law will be useful five years from now.

Meanwhile as the National Assembly resumes business after the Party Primaries, the country faces a serious food crisis and MPs have to figure out a way. The President’s Labor Day speech was dotted with shouts of Unga! Unga! from an agitated crowd unable to bear the weight of the increasingly high cost of living. Among the raft of measures expected is lowering of the subsidies to allow for easy importation of food stuff like maize; possibly sugar too.

Unfortunately this school of thinking takes a short-term approach and rewards those in the private sector with deep connections to high ranking government officials. Actually the Kenya Trade and Remedies Bill, 2017 also in the second reading is keen on protecting domestic industries from unfair competition from foreign companies. This Bill that hopes to set up an investigative body-The Kenya Trades Agency “to determine the existence of dumping and subsidization of imported products” is likely to be in jeopardy. The real crisis is that even in the face of real problems there are people in government who are still thinking of cashing on the crisis.

To begin with the government released the strategic food reserve without monitoring the exercise properly. One of the guests on KTN’s round table hosted by Asha Mwilu revealed that  a lot of that maize found its way to Arusha. The reserve having been depleted the government resorted to waive duty to allow the private sector import maize free. Again, this approach only serves those individuals in the private sector with the means.

Never mind that this is happening at a time when the Ministry of Health has been embroiled in a scandal that has seen the Global Fund Auditors pitch camp at Afya House to probe the alleged corruption after USAID freezed their funding. The Ministry had flouted procurement by irregularly awarding tenders to private sector individuals close to the government in what later was known as the AfyaGate scandal. Nobody  has been jailed yet and now a few people are about to make a lot of money from this food crisis.

And still on the high cost of living, the 11th Parliament’s life ends in June 15th to pave way for the General Elections and slightly over 15 Bills haven’t even gone past the second reading. The Finance Bill, 2017 has already got tongues wagging. The Bill proposes to raise the Withholding Tax on Management and professional services and on royalties If the Bill becomes law, the changes take effect on 1st of January 2018.

The government’s decision to increase the Tax bands by 10% thereby cushioning the low income employee may temporarily offer reprieve but this is simply a knee-jerk reaction and in a sense shifts the burden to the middle income earners whose challenges are not as far off as those of the low income earners. If anything, majority Kenyans in the middle income bracket are a salary a way from poverty, should an unexpected disease hit them they’ll be rendered poor.

For every Kenyan earning in excess of KES 42,781 30% of this figure will be deducted as PAYE. Not to mention the burden associated with the sky-rocketing cost of living hasn’t been dealt with. The long term solution is to bring together the Cereal Growers Association (CGA) and  millers to identify the weaknesses in the chain. Meanwhile the lack of political will to streamline the National Cereals and Produce Board (NCPB) only adds to the woes.

The confusion in government and indeed Parliament in resolving the challenges Kenyans are facing can be seen in the Bills that are currently being rushed to the floor of the House. On the one hand is the Kenya Trade and Remedies Bill, 2017 discussed earlier. On the other hand, is the Nairobi International Finance Center Bill which is feared might kill local firms as foreign companies that are in good standing with the cabinet secretary could be exempted from paying taxes unduly. Besides the  Bill undermines other laws around transparency and accountability as it shall over-ride all related laws. .

Admittedly some of the challenges we are experiencing with cost of living are as a result of natural calamities but the culture of greed that takes advantage of the plight of the majority to whooping sums must be stopped at all cost. Indeed we’re a free market economy but the government should work in public interest and not the private sector.