Kenya could potentially settle its external debt by reducing corruption by 50%. Treasury CS John Mbadi asserted that curbing daily graft losses could save the country Sh365 billion annually. He also criticized the financial unsustainability of the current 47 counties structure and proposed a reduction in the number of devolved regions for greater efficiency.
In Kenya, the government could feasibly settle its external debt if corruption is reduced by half, according to Treasury Cabinet Secretary John Mbadi. He defended President William Ruto’s fiscal consolidation strategy, emphasizing the necessity to enhance revenue while minimizing excessive spending, particularly in public procurement, where significant financial losses occur due to graft.
Mbadi highlighted the potential savings if Kenya were to cut its daily corruption losses of approximately Sh2 billion by 50 percent. This reduction could lead to annual savings of Sh365 billion, surpassing the Sh280 billion in external debt due in 2025. The treasury secretary stated that with such significant savings, there would be no necessity for external borrowing to meet debt obligations.
Additionally, Mbadi criticized the current devolved system of governance in Kenya, arguing that the 47 counties create an unsustainable financial burden with an expanding wage bill. He proposed a return to a model of 8 to 14 regions instead of the current 47 counties, suggesting this would streamline administrative processes and reduce bureaucratic redundancy.
He noted that the wage bill at the national level alone reaches Sh80 billion monthly, totaling nearly Sh1 trillion annually. When combined with Sh1.1 trillion in loan repayments, this limits available funds for development initiatives. Mbadi’s comments have ignited discussions about the need to reassess Kenya’s governance structure to foster efficiency and financial sustainability.
In summary, Treasury Cabinet Secretary John Mbadi suggests that Kenya could meet its external debt obligations if corruption is curtailed by half. He advocates for a reduced number of devolved governance regions to enhance financial management and efficiency. With current financial burdens hindering development, a reevaluation of the governance structure appears necessary for improved fiscal sustainability.
Original Source: www.capitalfm.co.ke
