Over the last few months, residents of various counties have taken to the streets and social media to indicate their displeasure at new taxes by County governments.  Residents have argued that the new taxes and tariffs are too high and not justified. County governments on the other hand, insist that the new tariffs are justified and needed to ‘protect’ and ‘ensure’ that devolution does not fail. In fact, allocation of funds to devolved units has been subject for debate since the last general elections.

It is a fact that money is needed to ensure full implementation of the Constitution in relation to devolution. County governments cannot wholly rely on the allocation of national revenue. Counties ought to raise funds within their powers and functions. Below I reflect on some aspects of public finance management in relation to County governments. From the onset, we ought to realise that proper public finance management is a matter of national security. I will explain this shortly.

Lack of proper public finance management is a threat to national security just as terrorism is. Unrest witnessed in the last few months in Meru County, Mombasa County and Machakos County is worrying. Hopefully the situation will never spiral out of control. Lack of prudent public finance management causes unwarranted high taxes, reduces disposable income, reduces spending power of the people and inhibits provision of basic services such as health, education, security, water and food. Further, it creates inequality, strains the national coffers and leaves the country open to exploitation of public borrowing. Public financial management may have an effect on interest rates, exchange rates and the cost of doing public and private business. The death and suffering of Kenyans due to poor public fiscal management poses a serious security threat.

There are several reasons the public financial situation is as it is. Both national and county governments have ignored basic principles of public finance management as articulated in Chapter Twelve of the Constitution of Kenya, 2010. There should be openness and accountability, including public participation in financial matters. Further, public money is to be used in a prudent and responsible way.

In relation of public money being used in a prudent and responsible way, there have been numerous incidents arising from facts and anecdotal evidence that indicate imprudence on the part of elected and appointed officials in the national and county governments. For example, why should a cabinet secretary or a governor to move in a convoy of almost three to four cars with at least 10 personnel? Do county governments really need to spend public money on overseas trips, extravagant entertainment and SUV transportation? Should public servants really be followed by an army of civil servants who would otherwise be providing security to other Kenyans? What message does this conspicuous spending by state officers tell the common Kenyan?

In the recent past, the Auditor General has raised queries on how public funds have been spent in past financial years. Lack of proper accounting and wanton wastage of public funds has been rampant. Even with the Constitution, it is a fact that the mentality of elected and appointed state officers has not changed such that they still consider. In addition, independent offices within the public finance management sector have proven to be toothless despite having full constitutional powers. These include the Salaries and Remuneration Commission and the Office of the Controller of Budgets. Without these institutions assuming full constitutional powers, wastage of public resources will still be rife.

On the issue of openness and accountability, county governments are yet to exhibit this in relation to public finance management. For example, offering draft finance laws to county residents in advance for scrutiny and debate. While some of the draft finance laws were made available online, the question remains as to how many common mwananchi has access to the internet. The Constitution mandates the national and county government to make information available to citizens. The access should include formats that may be easily comprehended by common mwananchi. Information on the draft laws ought to include justification and rationale for raising taxes and tariffs. Why in any case would county governments increase local taxes yet they cannot even absorb their national revenue allocations?

Lastly is the issue of public consultation. To what extent do County governments consult with their residents? Which forums do they use and are these forums representative enough? The fact is that County governments have not been holding public consultation on County legislation and policy. While it may be justified to increase County taxes, without having open discussions on the same with residents only opens avenues for dissent. County governments ought to realise that the Constitution is all about participatory governance and democracy. They cannot just impose finance laws and policies without comprehensive public participation. Let the people air their views, register dissent or approval to draft policy. A consulted and informed populace is less likely to engage in running battles in different parts of the country.

While seeming simplistic. Public financial management policies as articulated in the Constitution are key in guaranteeing the protection of fundamental freedoms and rights, maintenance of a democratic republic, access to justice, maintenance of national security and ensuring development. Poor public finance management hampers comprehensive implementation of the Constitution and in effect creates a disgruntled populace. Unhappy citizenry is a threat to national security….