This man Henry Rotich: The profile of the Cabinet Secretary Treasury!

The man has more lives than the proverbial cat!

Henry Rotich is perhaps the craftiest of President Uhuru Kenyatta’s Cabinet secretaries, having weathered several

storms unscathed.

His name has featured in several financial controversies that have rocked the boat for the Jubilee administration.

From his inability to point key projects funded by the Eurobond billions, to the 2015 cash flow crisis and the National Youth Service (NYS) scam, the head of government purse has always picked his battles carefully.

The soft-spoken career economist, described in court papers as a high-flyer of the deputy president, also knows when to remain economical with the truth or to come out and face his accusers head-on

At the height of the Eurobond controversy, Mr Rotich took the unprecedented decision to invite Opposition leader Raila Odinga to his office to explain to him in person how the net proceeds of the Sh250 billion Eurobond loan was spent after repaying a syndicated loan.

Despite being the custodian of all Government assets and the man who without his signature no funds can be wired out of government accounts, he is yet to present to the public a list of the actual projects that the billions were sunk into more than half-a-year later.

Adan Harakhe, a former senior deputy director general at the NYS, sensationally entangled him in the scandal at the youth organisation after he claimed that an agent named as Ben, who was at the centre of the scam, was alleged to be Rotich’s point man.

But Rotich had denied knowing any of the companies involved and dismissed claims that Ben was his agent.

When things become too tough, the Harvard University scholar chooses to keep off.

For instance, at the height of the controversial payments of the Anglo Leasing billions, Rotich kept journalists waiting at the Treasury Buildings for more than three hours only to call off the meeting.

He may have escaped scrutiny on this front, but he may not distance himself from the gaps in managing the economy and the gaps in the budget.

Rotich stands accused of presenting impossible targets to the taxman on revenue collections to fund the ballooning budget.

His projections on the economy have also always fallen off the mark due to what Parliament terms as “a systematic overestimation of revenue”.

Parliament’s budget experts have also accused Rotich of presenting spending plans that lack evidence of sufficient public participation. They also say that his revenue projections are racing too far ahead for the economy to support.

Over the last four years, real revenue collections grew at a modest 14 per cent while technocrats at the Treasury Buildings believed that revenues would grow at 23 per cent, invariably contributing to rising fiscal deficits and borrowing.

Latest revenue statement from the Treasury shows the taxman had raised a total of Sh888 billion in tax revenue by end of April against a target of Sh1.2 trillion.

To meet the target, the taxman will be required to collect more than Sh327 billion by end of June. This is a long call under the current tax collection record.

His ministry is also expected to ensure that the youth have access a third of Government tenders, but several departments are yet to implement this directive in full.

He is also unable to come up with a bankable debt reduction strategy for the country in what has seen legislators accuse him of treating debt as a moving target.

The latest report by the Parliamentary Budget Office (PBO) has termed the Government’s strategy to reduce public debt under Rotich “worrisome”.

The Government plans to borrow Sh689 billion in the new financial year to plug the deficit in the Sh2.27 trillion budget. This is more than half the amount of money KRA has been able to collect this year.

Uhuru’s government has already borrowed more in three years than what Kibaki did in his last five years in office.

This could become worse by the fact that Rotich was unable to keep the Government within the approved expenditure ceilings.

In the new budget, the national government overshot the budget ceiling by Sh139 billion, exposing the country to more debt.

Contractors under the Jubilee administration have also accused the Government of significant delays in payments after going for over six months at one point last year without pay.

The Central Bank of Kenya has come to Rotich’s aid in dealing with inflation after the new governor was left to employ only monetary policy tools to rein in inflation.

Companies at the Nairobi Securities Exchange are yet to recover from the 2015 bleeding that saw them lose over Sh250 billion in their value last year, taking a direct hit from the turbulence in the economy.

But it is the servicing of the growing public debt that is the biggest headache for the soft-spoken cabinet secretary given that he has to balance between prompt repayments of the huge debt and meeting other pressing needs at home.

Budget 2016/17: Hard times ahead!

Kuna kujwa! 

Kenyans should expect fresh taxation pain as the Government plans to borrow heavily and raise taxes in the new financial year to finance the Sh2.27 trillion budget.
Details of the actual taxation plan will be revealed today when National Treasury Cabinet Secretary Henry Rotich will read his fourth budget statement that will guide the Kenya Revenue Authority (KRA) in collecting Sh1.5 trillion in the new financial year.

In the proposed budget, the Government plans to borrow Sh775 billion from both the domestic and international markets. A poll by Ipsos released yesterday, however, showed that majority of Kenyans are agains new taxation and instead want the Government to raise cash from elswhere— borrow from foreign or domestic markets.

Beer, cigarettes, motor vehicles and luxury items, alongside emerging sectors such as gambling, are the easy targets for the Government to raid taxpayers to raise its revenue. Property sales, banking and money transfer services are also possible targets.

To finance this year’s budget, the Government increased prices of basic commodities after it introduced Value Added Tax (TAX), a consumption tax that is levied on products at every point of sale.

Other possible targets include landlords and traders in the informal sector who have resisted previous attempts to bring them to the tax bracket.

About 1,000 landlords had taken up the amnesty by KRA and volunteered to pay taxes in the first nine months of this year, a far cry from the 20,000 landlords the taxman was targetting in the nationwide campaign.

This means that the Treasury will have to devise new measures to go after landlords in today’s budget.

The Balancing act:

Mr Rotich will be walking a tightrope as he finds creative ways of raising the additional revenue needed to pay for the goodies the Government will dish out in the new financial year without falling out with the voting taxpayer.

The Jubilee administration has just about 14 months left in its last term of office, making the new budget its last kick in fulfilling its election promises.

The Treasury has already signalled an increase in taxation after it increased the taxman’s target by Sh300 billion in the new year that starts next month. KRA will now be expected to collect Sh1.5trillion, a 25 per cent increase from the Sh1.2 trillion this year.

Already the taxman is struggling to meet the current targets. KRA needed to collect Sh327 billion between April and end of June, a near impossible fete given its previous record.

The profit warnings and freezes in employment have made it harder for the taxman to raise new taxes.

The funding of the budget which will see the bulk of the billions spent on security, education and infrastructure for the third year running.

Kenyans should also expect their debt burden to rise one more time after the State indicated that it would continue with its borrowing spree to fund the growing budget deficit.

The Sh770 billion budget deficit will be financed by borrowing and grants.

Although the borrowing has been supported by the fact that most of the debts are being sunk into infrastructure, budget experts advising Parliament have accused the Government of lacking a proper policy on reducing debt.

The Parliamentary Budget Office, in its report that analysed today’s budget proposals, cautioned that even though borrowing is being used for development expenditure, the investment must be able to yield returns that far outweigh the cost of the loans.

“Is Kenya’s public investment producing assets? Over the period 2002/03-2014/15, the allocation towards development grew by 29 times in nominal terms. However, the rate of completion of projects has been very low,” the report notes.

It is estimated that as of June 2015, there were more than 1,000 projects which were classified as ongoing.

The estimated cost to complete these projects is estimated at Sh3 trillion.

It notes that in a country where cost overruns in project implementation is inevitable, it means the overall completion costs for these projects will be eventually be more than Sh3 trillion.

“The level of deficit shows direction of the country’s fiscal policy. If the set targets are continuously flouted, then predictability of the budget is compromised and effectiveness of the country’s deficit policies is diluted,” the Parliamentary Budget Office said in its analysis of today’s budget.

Kenyatta protecting his cronies!

Uhuru Kenyatta anakuanga ametubeba ufala sana?

Being our president, H.E Uhuru Kenyatta must rise to the occasion and provide leadership on this matter IEBC! The President knows just too well that this crisis has the potential to polarize the country further and set it down the treacherous path of self-destruction come 2017 if it is not resolved sooner rather than later.

The current pressure sparked by the Opposition-CORD to have IEBC commissioners leave office is not oblivious to the constitutionality of tenure of the commissioners.

It is all very obvious that the IEBC is a constitutional office whose commissioners enjoy security of tenure. But President Uhuru Kenyatta, his Deputy William Ruto and indeed the entire Jubilee brigade know just too well that the solution to the current standoff with the Opposition over the continued stay in office of the current commissioners cries out for a political - not a constitutional - solution.

But what everyone, including religious leaders, civil society and ordinary Kenyans agree is that a solution to the current impasse should be found as a matter of urgency.

With the weekly protests organised by the Cord Coalition and the brutal response the police have resorted to in breaking up the protests dominating the airwaves every Monday of the week, the country is once again staring at the reality of deep, irreconcilable, if not dangerous divisions over the continued stay in office of the IEBC.

Indeed what Kenyans, including the President and his loyalists, are now debating is not whether or not the IEBC commissioners should leave office but the mode of their exit.

President Kenyatta cannot hide behind the constitution on this matter. Doing so will be applying double standards. The President has, on various occasions, demonstrated his wisdom and taken action that goes against the Constitution when faced with a crisis.

When pressure mounted on the Government over the rampant Al Shabaab attacks and the fingers pointed at the then Inspector General of Police David Kimaiyo and Internal Security Cabinet Secretary Joseph ole Lenku, the President found a political solution.

He knows what he did to both Kimaiyo and ole Lenku. This the president did despite the fact that Kimaiyo enjoyed security of tenure as IG.

And when pressure was again mounted on the President to lead the way in the fight against high-level corruption, he went to Parliament armed with a decision that openly disregarded the Constitution and the rules of the EACC.

He presented a confidential report of the Ethics and Anti-Corruption Commission as the basis to weed out targeted Cabinet secretaries and other top Government officials from his administration.

Within days of his action, four Cabinet secretaries and scores of principal secretaries were out of office and have since been replaced, even after the EACC cleared a number of them.

What remains unclear is whether they are still on the Government payroll or not.

The President cannot therefore make statements that portray him as a helpless and hapless captive of the law and the Constitution on the matter of the IEBC commissioners.

He can use other means to ease the IEBC commissioners out of office without breaking the law and without Kenyans knowing how he did it.

He should get around the Constitution as he has done in the past to resolve this IEBC debacle.

This country has had several precedents of top government officials vowing not to resign from office.

Some have even publicly stated that they would rather die than resign, only to hastily leave office citing personal or health reasons. The reality is that they did so after being forced to do so. Remember Amos Kimunya, PLO Lumumba, David Mwiraria?

The latest and most dramatic case was that of Ann Waiguru, who left the powerful ministry of Devolution and Planning only days after she swore to high heaven she was not going to bow to pressure to quit.

Even within Parliament where he enjoys the tyranny of numbers, the President has swiftly moved to invoke the legal and constitutional windows necessary to effect the changes he has so desired.

Why then is the President giving Kenyans the impression that on this issue of removing commissioners of the IEBC the law and the constitution are cast in stone?

Only recently, the President assented to a law hastily passed by Parliament to open the way for MPs seeking to affiliate themselves with the new and his favored political outfit Jubilee Party to switch loyalties without losing their current parliamentary seats!

In short, the President has the power, the authority and the latitude to effect the desired changes in Government and that includes the IEBC by navigating around the law and the constitution.

Telling Kenyans that his hands are tied by the very same Constitution he swore to uphold and defend for the good of the people of Kenya will not just do. He is either being a coward or protecting his goons! The latter holds more water!

Negative tribalism is holding Kenya hostage!

Tribal politics is holding us hostage!

Devolution has revealed just how lucrative holding public office has become, and where true power lies, public office has become a high stakes game. Isn’t it time we made a concerted effort towards sifting through the noise in a bid to make decisions based on solid reasoning and not just the hype and conspiracy theories that have already started to take centre stage? 

The campaign period leading up to Kenya’s elections has a penchant for intrigues and comedy in equal proportions. 
The scene is raucous, confusing, the narrative riddled with the usual tribal and party politics. As besieged as we are, we have been yearning for a revolution in the last few months, I thought that someone would take up this rallying cry and turn it into the blueprint for their aspirations' platform. But no. All we are hearing is the same old rhetoric, less about leadership and more about ‘politricks’ which even though we declare we are tired of, we seem to keep falling back on as our default stance, maybe because we believe in better-the-devil-we know mantra. 

The blueprint for political aspirations in this country defies all logic, conforming to ‘loudership’ more than leadership. However, the power to change the landscape lies in the electorate’s hands and not, as we seem to have been convinced, in the politicians’. 

We presume that social likeability, wealth and opulence also equate superior leadership skills, kindness and strength. There’s a difference between good presentation and oratory skills and true leadership capability, facts that, at various points in our lives we have all been guilty of confusing.
 I forget how many times I have heard various versions of this argument. That because a certain candidate - presidential, ministerial, gubernatorial – candidate speaks a certain way, presents himself in a certain way he or she is more or less fit for political office. Which is one of the reasons we keep making bad choices when choosing leaders; getting taken in by the promises they make, how convincing they look and act while making them.
 Instead, we should be digging deeper into what their true character is, away from the spotlight of the media, the achievements we can legitimately attribute to them, who they were before they started to vie for political office. 

 Over the next 15 months, a large number of countries on the continent are heading to the polls and therefore ramping up efforts towards underlining the importance of citizen engagement and participation in elections, with Kenya being no exception. 
It is equally important, at the same time, to appreciate the political power that lies in the hands of the electorate, and just how impactful this can be, if harnessed. There’s a significant advantage towards changing the narrative that has been disseminated, that of the voters being powerless and defenseless. 
Dear Kenyans, your vote is the single most powerful tool that you can use to exercise your choice, both during and after the polls. Now, if someone approaches you and offers to line your pockets in return for favour when exercising your choice in a certain direction, whether overtly or covertly (aside from it being illegal) you will have your conscience to deal with - for the whole period until the next elections.
 However, the beauty of the secret ballot is exactly that, that you can exercise your choice in line with the conviction of your beliefs; which segues neatly into the significance of separating voting for personalities and for issues. I know, it all seems idealistic to say that, given how immature our politics seem at most times. And we may never completely disassociate our decision making from the perspective of tribe. 

However, at some point we have to come to terms with the fact that tribe does not always have to be as divisive as it’s been portrayed, and that the largely negative narrative has been abused by the politicians to whom it benefits most to get us stuck in the history of our last names and what part of the country we come from. That is why it is so easy for us to turn against each other when pushed to the edge, stuck in the belief that anyone who is not exactly like us is our enemy, instead of confronting the common frustration that we feel in failed leadership. 
There’s this age old question of optics versus reality. Explained by the ‘halo effect’, we seem to be taken in by a perceptual bias where despite our judgement and logical sense we judge a book by its cover.

This is digital money!

Hii pesa si ya mama yako bwana!

The world is witnessing an unprecedented technological revolution as consumers adopt more sophisticated lifestyles.

The financial services sector, in particular, continues to leverage on cost-effective technological advancement to facilitate the delivery of accessible, affordable and safer financial services to Kenyans.

It is noteworthy that the landing of the fibre-optic cables along the East African coast has enhanced connectivity speeds, lowered the cost of transactions and improved efficiency in the banking and financial services sector.

There is no gainsaying that money transfer service is an integral part of economic development as it enables people and businesses to cost-effectively move money.

Against this background, industry players are investing in modernizing their infrastructure, building interconnected ecosystems, extreme channel integration and robust IT platforms. One such platform is the Kenswitch Domestic Interbank Transfer Service (DITS) that allows users of the Kenswitch network to transfer funds on a real-time basis across the network, amongst participating member financial institutions

DITS is accessible through the existing infrastructure of member banks like ATMs, online banking platforms, mobile banking applications, Point of Sales (POS) devices and agent banking.

With the focus now shifting towards a paperless economy and with branch-less banking now in place, cheques will soon be a thing of the past while use of paper money will start fading away!

Other than efficiency in the transfer of money and stemming insecurity associated with carrying large sums in cash, DITS offer benefits such as lower transaction costs, transaction values of up to a million shillings per transaction, speedy availability of funds for the business, hence better cash flow and a robust platform.

A key salient feature is that the platform can be integrated by banks seeking easier channels for loan repayments, as well as County governments wishing to automate revenue collection. Businesses can also save on disbursement of funds like salaries through the cost effective platform. It will also make it easier to recharge pre-paid cards in the transport sector using the platform.

With the advent of mobile phones, financial services can now be delivered to remote areas, as banks move away from the brick and mortar model, onto electronic channels.

The cost of delivering financial services eventually goes down, as banks decongest their branches.

Above all, money transfer services in the long run contribute to the growth of the  Earnings Before Interest, Tax, Depreciation and Amortization(EBITDA) of a number of banks and non-bank financial institutions.

In the long run, money transfer service is a core part of any financial institution’s strategy, with e-banking driving not only the bottom-line but also crucially, deposit mobilization.

It follows that an efficient national payment system reduces the cost of exchanging goods, services, and assets, and is indispensable to the functioning of the inter-bank, money, and capital markets.

But challenges also abound with cash transfer platforms. Key among them is the cost of firewalls and risk mitigation

The high internet bandwidth brought about by the landing of the fibre-optic cables is a double edged sword that builds and destroys businesses at the same time.
With the availability of broadband, cases of cybercrime are on the rise, notably in the form of identity theft and phishing. There is no denying that a number of banks have in the recent past lost huge sums of money through such vices.
But when all is said and done, the benefits of having a robust payments platform far much outweigh any demerits that may come in the way of leapfrogging transactions to the next level.
Ultimately, financial services boundaries are set to blur as platforms reshape industries into interconnected ecosystems.

Metamophosis: M-Pigs turn into Vampires!

With MPs, its like chicken breaking eggs for omelette!

The legislators are at it again. On Wednesday 28th April'16, they joined hands and overwhelmingly voted to shield themselves and members of county assemblies from prosecution for anything that they do “in good faith” while on duty in and outside the chambers.

The MPs voted 242-5 for the bill to amend the Constitution to give themselves and MCAs the immunity.

MPs have the tendency to forget their bitter political differences when dealing with matters of their interest. Although they are known to disagree on virtually everything, when it comes to issues that touch on their welfare, Parliament usually has no Jubilee or Opposition MPs - they all speak in one loud voice.

To show how seriously the House took this vote, Speaker Justin Muturi gave members over 30 minutes, instead of the usual 10 , to summon their colleagues to the debating chamber to get the requisite numbers. He even allowed those without cards to vote! This is a very committed lot!

The bill also prohibits the Judiciary from interfering with “matters pending consideration” before the assemblies or their committees.

If the bill, sponsored by Homa Bay MP Peter Kaluma becomes law, Kenyans will not be allowed to challenge the legislators in court, even where they feel that their rights have been infringed upon, so long as the MPs actions are in good faith, whatever that means.

Sadly, many a time, MPs have passed bills which everyone, except themselves, feel are in bad taste. This includes attempts to increase their salaries and perks and to gag the media, which were done “in good faith”, but which raised public anger and pushed Kenyans to the streets and courts. Kenyans will not be able to challenge such actions by MPs with the new law.

Yours trully is not an expert with interpretation of the law but I can quote this without fear of contradictions: Article 27 of our Constitution provides that every person is equal before the law and has the right to equal protection and equal benefit of the law. 

MPs should not be exempt from this. They must not be given preferential treatment. That’s why President Uhuru Kenyatta should reject this bad law if Senate doesn’t. 

Dear Mr. President, please make me proud on this one! Put Kenya above self on this one please!

Jubilee has done a pretty good job!

A little optimist goes a long way!

Have you ever heard a person who speaks only in the superlative? At any one time, they are either burning or freezing, wildly ecstatic or deeply depressed, having the best day of their lives, or the absolute worst. We would find such people ridiculous. And unbelievable. Why? Because it’s impossible to travel so quickly between two poles, without passing through a diverse topography of experiences and, therefore, emotions in between. People of superlatives speak as though human experiences are binary; as though they can be counted on two sides of a coin—and such volatile individuals are always a coin toss away from the best and the worst of things.

Well, public assessments of the present administration can often sound like this.

Between official opposition propaganda incumbency supporting sycophants, there is little room for critical, thoughtful, reflective discourse on the state of the nation, and the performance of our Executive.

One has to appreciate that the Executive itself has demonstrated a considerable level of maturity and self-reflection. They trumpet their triumphs but they also admit to the challenges that they face. They are willing to say: “We have made progress” but “we are not there, yet”; “we have done well in this regard” and “we have made mistakes on this issue, which we are learning from”. I mean, they are even willing to apologize, sack people, and review their stance on issues—an unprecedented and welcome addition to Kenyan politics.

And the President himself is willing to admit “I am only human” and ask his country to “pray for me”. That is the kind of sincere, self-assessment that leads to genuine progress. It is the kind of honest self-assessment that suggests that the Executive is not merely concerned with engaging in public relations “spin” that makes it look good, but is actually concerned with the altogether bigger business of actually becoming good. It’s the kind of thing that is worth celebrating, not dismissing as resignation, or criticizing as reluctance.

In fact, the ardent critics, and, to be fair, many supporters of the regime, would do well to take a leaf from this book of balance.

Unfortunately, many critics and supporters can only conceive of Government as one thing: the Executive is either primary perpetrator or chief victim of corruption, the Government has either done nothing at all, or it has done everything it possibly can; the President is either a leader unto darkness and death and the worst thing to happen to Kenya, or he is an irreproachable island of innocence sadly surrounded by seas of sleaze and incompetence; he is either almighty and able to fix all of Kenya’s problems or he is powerless — held hostage by powers beyond his control.

Surely these extremes are silly? Surely these narratives are simplistic? Surely there is still an attendant danger that comes with these kinds of political single stories?

The negligence of nuance in public assessments of our Government, our President and our State will, in the end, serve to hinder rather than help us. And the danger is that many ill-intentioned or blithely ignorant people can exploit the naivety that this negligence betrays, to carry out their own self-interested agendas.

So for our own sake, let us wake up. Let’s stop parroting and start thinking. If we are going to have a court of public opinion, let us at least make sure that we, the judges and jurists are concerned with justice—with being fair, objective, reasonable and honest, not one-sided, bitterly biased, and bone-headed in our denial of the facts.

And if we were to be a more just court, we might talk something more like this:

Is our country perfect? No. Is it making progress? Undeniably, yes. Is our President perfect? No. Has he moved our country forward—well, if it is making progress then presumably he has. Is our Government perfect? No. But is it becoming better? I certainly think so. Will our politics and governance be transformed overnight? Not a chance. Will they be transformed in the very near future? Hardly likely. But are we seeing a progressive transformation of the political space? Bet on it. Truth be told.

And with an election coming up, the question on Kenyans’ minds should be whether those who are presenting themselves as alternatives to this regime, offer rational assessments of the regime’s strengths and failures, realistic solutions to the existing challenges, and concrete plans of action to move Kenya forward, or whether they are merely opportunists offering the kind of mindless, superficial opposition that’s decadent in its dissent, high on simple superlatives, and low on real substance.