Azimio la Umoja leader Raila Odinga’s troops in Parliament want the Kenya Revenue Authority probed for alleged mismanagement of revenue.
The opposition says that the taxman is to blame for the “financial and economic crisis building up in the country”, saying it was the first time MPs' salaries have been inordinately delayed since independence.
Their main question is where proceeds from taxes and the savings from the subsidies President William Ruto’s administration scrapped on assuming office go.
"Today, about six months into this regime, Kenya cannot pay salaries, leave alone finance its other operations," the opposition said in a statement by National Assembly Minority leader Opiyo Wandayi on Friday.
"This is the sad state of affairs that the administration is hiding from Kenyans," the opposition said. "For the first time since independence in 1963, the government of Kenya is unable to pay salaries to civil servants and Members of Parliament."
Azimio said the situation has been degenerating progressively since December last year.
"This month, things have come [to] a head. For the first time in our history, even MPs have not been paid as we head towards mid-month."
Azimio believes that the cash flow crisis is man-made, putting the Kenya Kwanza administration on the spot over alleged spending and pilferage of revenue at source.
“The easy conclusion is that the criminals at KRA are collecting and pocketing taxes as the incompetents at the National Treasury also skim off the revenue while failing to come up with sound policies for cash flow,” Wandayi said.
Raila’s team's standpoint is that with Kenya Kwanza having stopped subsidies, the situation should be better, further expressing fears that the country is teetering on the brink of economic collapse.
Among the issues, the opposition wants to be probed is the alleged theft, which it believes happens at critical institutions in charge of revenue generation and collection.
“We need to take a close look at the operations of individuals and systems at the National Treasury, the Central Bank of Kenya and the Kenya Revenue Authority and compel testimony and the production of documents with a view to establishing what has gone wrong,” the opposition said.
In this regard, the opposition wants surveillance scaled up at the Kenya Airports Authority, the courts, customs, National Social Security Fund, aids and grants and revenue administration.
“We believe a lot of our cash flow problems have got to do with the corruption, tribalism, nepotism, incompetence and plain theft at critical revenue collection points, starting with the KRA, in addition to wrong spending priorities,” they said.
Azimio, which is pushing the government to roundtable talks on a raft of issues, fears the country’s cash system may collapse.
Raila’s side thus wants MPs to conduct an inquiry into the financial and economic crisis.
The call followed a salaries crisis that has hit most civil servants and state officers, including MPs.
“This state of affairs calls for bold leadership,” Wandayi said, warning of “collapse like other African countries that have gone that route.”
The National Treasury admitted to a cash flow crisis of monumental proportions, saying there was not enough money to increase allocation to counties.
In the ensuing circumstances, a number of operations have been affected, and salaries for numerous civil servants delayed.
Whereas a section of lawmakers claimed they have been paid, a number were that their March salaries were yet to hit their accounts.
Most civil servants get paid by at least 24th of every month, but many went for Easter holidays empty-handed.
Kakamega Senator Boni Khalwale, however, dismissed the claims of late MPs’ salaries as propaganda.
“Cheap propaganda. We’ve been paid,” the Kenya Kwanza Senator said in a tweet responding to a media report on the crisis.
A number of lawmakers though intimated to the Star that their staffers have been affected too.
Wandayi said this was the case in many institutions and a number of county governments, save for those with arrangements with banks on monthly pay.
“Both national and county governments are struggling to pay salaries and service delivery is getting compromised with every passing month. Soon, even parastatals will not be able to operate,” the Ugunja MP said.
Sources in government indicated that the cross-cutting pay crisis was a major concern, explaining it has been occasioned by a huge debt repayment payout.
In the face of the cash flow strain, priority was given to officers in the security agencies, among others handling critical sectors.
A number of mainstream ministries and state departments were yet to settle dues by Easter weekend.
County governments have run for months without receiving their allocations for operations, salaries and development.
State functionaries said the crisis has been worsened by the global dollar shortages, meaning the exchequer is releasing more shillings.
“There is no money for real,” an official aware of the situation, which the opposition stated has seen Kenya shilling weaken against neighbouring countries’ currencies, said.
Treasury, while recently before senators, said the dollar supply disturbances disrupted business and fuelled a fall of the shilling.
Governors, through their council’s Finance and Economic Affairs committee, say the National Treasury has not disbursed Sh96 billion for the past four months.
Kakamega Governor Fernandes Barasa said with the devolved units entering the fifth month without exchequer payouts, workers’ strikes are imminent.
While at it, MCAs are piling pressure to get paid amid the headache the lot prefers getting all their pending dues settled at once.
For the ODM chief, the situation has been degenerating since December last year, with this month just lifting the lid on the grave status of affair.
In what could portend the trouble lying ahead, the debt repayments are projected would surge in 2024, leaving the country at the devices of the World Bank and the International Monetary Fund.
Economic experts, in a presentation to MPs, said that debt repayment would continue to gobble huge chunks of the ordinary revenue.
International Budget Partnership Kenya and the Institute of Certified Public Accountants of Kenya told a Senate committee that public debt stands to crowd out critical state expenditure.
In a joint submission on the Division of Revenue Bill, 2023 the experts projected that public debt repayments would account for 48.6 per cent of revenue next fiscal year.
The figure, they said, could get higher should Treasury succeed in its bid to set the debt cap at 55 per cent of the gross domestic product instead of the current Sh10 trillion limit.
Debt repayment is projected to cross the Sh1 trillion mark to hit Sh1.25 trillion from this financial year’s Sh930 billion.
“Now this going to hurt so bad… in April all loans repayments will kick in (the deferred loans included) and we will not be able to repay!” Narok Senator Ledama Olekina said.
Political analyst, Prof Gitile Naituli, said the happenings were signs that the President Ruto’s plan has failed.
“It is clear ‘The Plan’ has failed to take off. Now the new plan is to find a boogeyman to blame for the failure. Buckle up dear Kenyans. The plan has failed,” he said.
){kind=link}
