Nairobi — Kenya could comfortably settle its external debt obligations if government suceeds in cutting down corruption by half.
Treasury Cabinet Secretary John Mbadi made the revelation on Wednesday night while defending President William Ruto's fiscal consolidation strategy which aims to boost revenue while curbing excessive government spending.
A major area of concern, he noted, is public procurement, which has been a significant source of financial leakages.
"We have talked about implementing e-procurement because we lose so much money in procurement alone. Many figures have been thrown around; remember the former president talked about us losing Sh2 billion per day. I once made a joke, which went viral, that if we could just reduce our theft by 50 percent," Mbadi told Citizen TV.
The Treasury CS stated that if at least half of the estimated Sh2 billion daily losses to graft is curbed, the country could save Sh365 billion annually--a figure that far exceeds the Sh280 billion in external debt maturing in 2025.
"If we are stealing Sh2 billion per day as an economy and we make a conscious decision to steal just a billion... If you had been stealing Sh1,000, you steal Sh500--although that is not desirable, I want it to be zero. But even then, we would save Sh1 billion per day, translating to Sh365 billion per year."
Mbadi stressed that with such savings, Kenya could fully finance its debt obligations without seeking external loans.
"That is the money we borrow externally. External debt this year alone is Sh280 billion, far less than what we would save. So, we will not need to go out there looking for money," he explained.
Unsustainable counties
Beyond corruption, Mbadi faulted the current devolved system of government, arguing that the 47 counties are financially unsustainable due to the ballooning wage bill.
He suggested that Kenya should revert to the previous eight provinces or, at most, fourteen regions as the basis for devolved governments.
Mbadi said that the decentralized government structure has created multiple layers of bureaucracy that drain public resources.
"You go to counties and find all kinds of staff--you find directors of fishermen, boda bodas, music, and culture, all earning big salaries, with deputies. We have so many people. And that's not even considering the fact that 47 counties are just too much for a country," he said.
"Each of the 47 counties has a full-fledged government--a governor, who is like a mini-president, with a deputy who is a running mate, often struggling to find work to do. Then you have ministers--most counties went for the maximum of 10. We have Chief Officers, more than 10, and then we have county assemblies."
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8 to 14 devolved units
Mbadi added that a leaner system would be more efficient in tackling the country's financial crisis.
"I would go for a maximum of 14, but even 8 would still serve us perfectly well, with resources devolved to the grassroots. We can devolve resources without devolving the heavy government to the grassroots. It is unsustainable."
Mbadi further noted that the wage bill at the national level alone stands at Sh80 billion per month, amounting to nearly Sh1 trillion annually. Coupled with Sh1.1 trillion in loan repayments, this leaves little room for development.
"We have a very expensive government. Today, we are paying Sh80 billion per month at the national level for salaries. Per year, that's Sh960 billion--it's approaching a trillion. We are collecting Sh2.5 trillion and spending about Sh1.1 trillion on loan repayment. So where do you get money for development?" Mbadi added.
Mbadi's remarks have sparked debate over whether Kenya's governance structure should be re-evaluated to improve efficiency and cut costs.
