Kenya’s Debt Settlement Feasible Through Corruption Reduction, Says Mbadi

Kenya could clear its external debt by cutting corruption by 50%, according to Treasury CS John Mbadi. He emphasizes the need for e-procurement to address financial losses in public procurement. Mbadi also suggests revising the devolved governance structure from 47 counties to a more manageable number to enhance efficiency and reduce the public wage bill, which hampers development capacity.

Recent statements by Kenya’s Treasury Cabinet Secretary John Mbadi reveal that the country could potentially settle all its external debt if it effectively curtails corruption by 50%. During a discussion on a fiscal consolidation strategy proposed by President William Ruto, Mbadi cited public procurement as a main area contributing to financial leakage in the government. He highlighted the pressing need for implementing e-procurement systems to mitigate considerable financial losses.

Mbadi emphasized the staggering figures associated with corruption, recalling that former President Uhuru Kenyatta mentioned losses of approximately Sh2 billion per day. He made a humorous remark indicating that if the nation could reduce its theft by half, it could save an impressive Sh365 billion annually. This amount surpasses the Sh280 billion due in external debt in the year 2025.

To illustrate the impact of reducing daily losses, Mbadi noted that if thieves were to decrease their daily ‘take’ from Sh2 billion to Sh1 billion, the resultant savings would amount to Sh365 billion annually. This significant saving would enable Kenya to finance its external debt obligations without the need for additional loans.

In addition to addressing corruption, Mbadi raised concerns regarding the sustainability of the current devolved system of governance, which consists of 47 counties. He proposed that the country should revert to a system of eight to fourteen regions to enhance financial efficiency and reduce bureaucratic complexities associated with the numerous county governments.

He commented on the excess administrative layers within counties, including numerous high-salaried positions that do not contribute significantly to public welfare. This excessive governance structure, he contended, drains public resources substantially.

Furthermore, Mbadi pointed out the national wage bill currently stands at Sh80 billion monthly, which totals nearly Sh1 trillion annually. With additional repayment obligations of Sh1.1 trillion in loans, there is minimal capacity for developmental expenditure. His remarks have ignited discussions about the need to reevaluate Kenya’s governance structure in pursuit of improved financial management and resource allocation.

In conclusion, Treasury Cabinet Secretary John Mbadi asserts that significant reductions in corruption could facilitate the settlement of Kenya’s external debt. Moreover, he argues for a reevaluation of the current governance structure to enhance efficiency and reduce financial burdens caused by excessive bureaucracy. His insights underscore a call for reforms aimed at improving fiscal responsibility and ensuring sustainable resource management for national development.

Original Source: www.capitalfm.co.ke