Monday, August 6, 2012

Central Bank, a victim of questionable executive orders, Billow Kerrow

"Parliament is at it again. The Khalwale-led PAC committee has once again recommended sanctions against public officers over the De la Rue money printing deals.
As its tradition, when the report comes before the House, the same committee members may backtrack on their recommendations, and other members may take partisan positions on the matter. Yet again, others will obfuscate, led by their personal interests, not in the least their rent-seeking behaviour.
It is not surprising for the committee to sanction former Finance Minister Amos Kimunya for his overt role in the De la Rue matter. The man has a knack for getting into trouble, and graft-induced controversy is his second nature. He exemplifies a class of voracious and greedy public officials who abuse their offices at every turn in total impunity.
His utter disdain for law and due process is shocking, as is his arrogance when dealing with everyone, including MPs. Yet, the same Parliament had him fired from the Finance docket only to bounce back in the cabinet a short while later, courtesy of his cosy relationship with State House.
De La Rue has always been a cash cow for the Executive. Whoever takes over the Finance docket develops a pecuniary interest in its contract and soon acts to vary the terms. Just a month to the 2002 elections, the Moi regime renewed its money printing contract for 10 years.
When the Narc team took over, then Finance Minister Hon Mwiraria immediately cancelled the contract and renegotiated another one. Then Kimunya came in, and called his shots too, and even convinced Cabinet that Government should buy shares in it! It has always been the same. Those who stand in the way, like former Deputy Governor Jacinta Mwatela, get fired.
Her boss, Governor Andrew Mulei, was bundled out ignominiously for defying Kimunya. Mwatela had her powers under the CBK Act curtailed so that she remained impotent on the matter. I remember Police being sent in to CBK one morning to intimidate her team on money laundering scam at one of the banks. CBK as an agent of the Treasury cannot be independent.
In its monetary policy, it may. However, the Treasury still has immense powers in the statutes to determine operational issues in the bank, including currency printing. MPs need to clip Minister’s wings at the bank first. Indeed, for CBK, the Treasury’s performance affects its mandate adversely. Take for instance the recent depreciation of the shilling.
CBK can only manipulate its monetary instruments to stabilise the shilling, including the interest rate, which is not favourable to the economy. However, that the fiscal policies by the Treasury largely contribute to the inadequacies of the supply side is often ignored.
Huge public spending, massive domestic borrowing and fiscal measures that impact on macro-economic indicators fall under their docket. But when the indicators like the value of the shilling and the exchange rate worsen, we tend to heap the blame on CBK.
The recent attempt by Parliament to have an external Presidential appointee to chair CBK’s board only serves to further undermine its independence. Currently, the governor is under no direct control of anyone as he chairs the Board, except as guided by the independent board members. But when serving under a board chaired by a political appointee, this independence will be greatly impaired.
On the De la Rue matter, the buck stops with the former minister, Kimunya. Not CBK Governor, merely accused of not telling Kimunya off! From the report, the bank did not play ball with the minister, but the latter invoked Cabinet decision to overrule it.
The company itself needs to be investigated because of its perceived role in paying kickbacks in its contract. Furthermore, we need to forget plans for a stake in this company, pursued by Kimunya under the pretext of keeping jobs. As always, MPs will get into the sideshows on the matter, play its sectarian politics and Kimunya will have the last laugh.
The writer is a former MP for Mandera Central and political economist". Courtesy of Digital Standard.

Tuesday, July 31, 2012

Proposed Vat increase is not a solution to an ailing economy, Billow Kerrow

"The VAT Bill expected in Parliament next week is likely to raise questions on the Government’s commitment in addressing the high cost of living that has driven nearly half the population below the poverty line.
The Bill will eliminate most zero-rated or exempt categories, and eliminate all other rates except the 16 per cent and zero-rate. The impact is a 16 per cent VAT rate on some basic commodities that enjoy zero-rate now, and a higher rate for others previously taxed at 12 per cent or lower. It all means, higher prices for basic goods.
The Treasury has long argued that zero-rating consumer goods has done little to cushion the poor, as the benefits rarely trickle down past the suppliers.
Prices of our staple foods have over the years gone up significantly despite the zero-rating, with marketers citing higher inputs and manufacturing costs. The Treasury and KRA believe other alternatives should be found to cushion the poor rather than erode the tax base. They do not mind zero-rating unprocessed goods, which is passed on to consumers.
Of course, Treasury may have a point. But raising VAT taxes is regressive and will hurt the poor more. Studies conducted recently by the Institute of Fiscal Studies when the UK Government raised VAT rates from to 20 per cent revealed that the bottom 30 per cent from income were hit twice as much as the top 10 per cent. In other words, it hit the poor twice as much as it hit the rich. The poor spend a higher percentage of their incomes on basic commodities than the rich.
The flip side of the VAT raise is why Treasury should be keen on collecting more revenue when it should have focused on fiscal discipline. Our Government lives ostentatiously large on taxpayers sweat.
There is a lot of wastage and extravagance of public resources by a bloated public service. Nearly 30 per cent of the budgeted expenditure is pilfered through procurement of goods and services.
There has been little or no attempts to restructure the public service to deliver greater productivity and cut consumption expenditure. The Government resorted to borrowing big time to sustain this life, with a resultant public debt of Sh1.5 trillion.
True, most countries use other measures to cushion the poor against rising cost of living. In US and Europe, it is the farmers who are subsidised.
We tried this by zero-rating or exempting agricultural tools and equipment, and inputs such as fertilisers. We also had cheap loans to farmers and write-off of farmers’ debts. It has not helped in reducing food prices or enhancing our food security. In developing countries, Governments usually resort to subsidising food prices by zero-rating the final products, a measure that Treasury believes is not working.
In Egypt, bread prices are subsidised by up to 96 per cent. In Ethiopia, food subsidies work pretty well, with a surcharge of 10 per cent on luxuries to finance it. No Government will enjoy legitimacy if its people are starving. Other alternatives do not work well in a country where corruption is high.
The Goldenberg scandal arose from export compensation payments to encourage mining. Although the ERC price control has worked well in capping fuel prices, the Government’s attempt to introduce two-price maize flour in 2009 failed. The current cash transfers and other safety net procedures to reach the poor have had a limited impact.
Programmes targeting have always been comprised. When slums are upgraded or houses are built for the poor, it is the rich who take it. Land settlement schemes for the landless end up with the rich.
Governments like taxing the low and middle income earners because it is easier to collect money from them. Taxes on capital or the rich are usually difficult to collect. But for the poor who already face a huge pressure finding a living, raising VAT on essential goods would be the worst thing to do.
The writer is a former MP for Mandera Central and political economist". Courtesy of Standard Digital.

Monday, July 23, 2012

Lack of commitment to matters of integrity our Achilles’ heel, Billow Kerrow

"‘Gone baby gone!’ screamed our media as the enigmatic Miguna left the country in a huff amid calls for a statement by police on his allegations. It was an anti-climax of sorts. He threw down the gauntlet, but could not face his opponents that he so dramatically dared to the ring. Did he run away as a fugitive, or did he fear for his safety?
Whatever the reason, the anxiety and euphoria created by his book died with his departure. As is our tradition, there will be no desire by Government to investigate some of the outlandish allegations in his book, and by end month, no one will recall the book or the man.
The Kiswahili say ‘kikulacho ki nguoni mwako’. Our leaders should know that they are watched by all, through the eyes of their close ones, be it family members or advisors. History is replete with leaders turning on their advisors, or vice versa.
They know the workings of the ‘kitchen cabinet’ that usually run the State, and a fall out invariably leads to spilling the beans. In the Western world, this is usually done through memoirs as Miguna did.
John Githongo was a special advisor to President Kibaki and had to leave the country after he spilled the beans about corruption among the President’s men. He was accused of all manner of ills and was not spared even as he stayed put in the UK.
We see a similar script in Miguna’s case too. He is now accused of being a fugitive from law, a hireling guilty of all manner of sins too. Githongo was a whistleblower, and so is Miguna. Some may argue that there is dissimilarity in circumstances as Miguna was largely driven by malice and vengeance after he was fired.
However, whatever the motivation, he blew the whistle too on corruption in the PM’s office. But sadly, little has changed since the Githongo dossier went public in 2004. The Public Accounts Committee report and recommendations on the Githongo dossier was adopted by Parliament, but lies unimplemented on the shelves.
There is growing intimidation of whistleblowers, whether it is about corruption, narcotics or ethnic violence. Fear of retribution has forced most potential whistleblowers to silence, and those who gave evidence to investigators have been forced to relocate elsewhere. In all cases, the Government has shown little or no interest in protecting whistleblowers.
True, the democratic space has widened since the Githongo days. The media and Parliament have continuously revealed grand corruption and abuse of office. But the Executive has patented a standard response mechanism, where the official ‘steps aside’ pending investigations, and resumes office months later after being ‘cleared’. The reports clearing them are never made public; hardly any convictions ever take place.
For many Kenyans, the Leadership and Integrity bill now before the CICK that is intended to give effect to Chapter Six of the Constitution should cure the ills of integrity and lack of ethics that bedevil our leadership.
The draft sets out to regulate public trust, responsibility and duty; transparency and accountability, financial integrity, conflict of interest, political neutrality and professionalism among other things in order to set standards for good leadership and integrity in the public service. Many people still think the Bill lacks the punch.
It also does not deal with situations like those of cases before the ICC, leaders with corruption cases in court, individuals and corporations adversely mentioned or blacklisted in parliamentary committee reports: individuals expelled from professional bodies on questions of integrity or the Githongo/Miguna kind of revelations. It does not attempt to bar elective office seekers, except those convicted by a court.
As expected, the Bill encourages whistleblowers and pledges protection and reward, an offer unlikely to attract attention. However, it is unlikely too that our leaders will rise to the occasion and pass the Bill even in its current innocuous form. Lack of commitment to matters of integrity and good governance by those at the top has been our Achilles’ Heels. But the struggle must go on.
The writer is a former MP for Mandera Central and political economist". Courtesy of Standard Digital.

Sunday, July 15, 2012

Reform pledges must be taken with a pinch of salt by Billow Kerrow

"You can call it peer jealousy, or it is simply reforms rhetoric of the Kenyan kind. The G7 team has mounted all its guns on Raila Odinga’s reform campaign platform. His two horse race analogy, of the horse of reforms vs the horse of status quo and impunity, has drawn unusually sharp criticisms from all the other presidential hopefuls, long united as his foe. But his former aide Miguna Miguna’s book serialisation could not have come at a worse time for the ‘enigmatic’ man in Kenya’s politics.
Miguna’s statement that the PM’s office ‘was a swamp of corruption’ energised the G7 team to come out with guns blazing. From maize scam to oil deals, Miguna reveals the usual tolerance for high graft in the lofty halls of power, and the PM’s office was no exception. Miguna was flabbergasted by the Raila team’s ‘it is our turn to eat’ culture, though he never bothered leaving their company.
In her book, It’s Our Turn to Eat, Michela Wrong avers that Raila’s men were hopeful of ‘their time’ even as they voted in 2007. After the vote rigging, she says Raila’s men were ‘royally screwed’ and robbed of their ‘rightful turn at the trough’.
Ironically, in the 2003 Narc regime of the Anglo Leasing fame, Raila was also part of the Rainbow Coalition that did awfully little to tame their coalition partner’s avarice, except to accuse the Kibaki set that ‘there is a snake in the nest’.
In the Grand Coalition Government, accountability is not on test, and there is hardly anyone watching the till. Both sides have implicitly agreed to live the adage that ‘those living in glass houses should not throw stones’. Official opposition does not exist, and the civil society of yester years is largely subsumed in Government.
Edward Clay’s rumble in 2004 that ‘the practitioners now in Government have the arrogance, greed and a desperate sense of panic to lead them to eat like gluttons’ may well fit the current situation.
Pledges to fight graft and impunity by our leaders must be taken with a pinch of salt. All have a stink, if only by sheer dint of being in the company of the villains. None wants to raffle feathers when necessary. Take this week’s issues for instance: Parliament’s revelation of the Sh98 billion book-keeping blunders by the Treasury, the contemptuous County Commissioners snub of the courts and the Kabuga official cover-up. How many leaders would rise to the occasion and demand action? Awfully few!
But Raila would. And this is why he waves the reforms card. Unlike his G7 foes, he would tread where they won’t dare. Give the devil his due. It may be plain rhetoric, to be populist, or to settle political scores. In the court of public opinion, it counts. Silence means weakness against impunity, or simply complicity.
In Babafemi Badejo’s biography of Raila, An Enigma in Kenyan Politics, he says ‘Raila was not found wanting in the struggle for multi-party order in Kenya, and that his many years stint in jails in this regard endeared him to Kenyans’.
True, he fought for political freedoms. But the meaningful reforms we want tomorrow has to do with economic reforms, leadership integrity and good governance.
If Miguna’s tales are anything to go by, Raila’s reform card hardly inspires Kenyans in this regard. No wonder then that the G7 conformist team prefer placing him in their ranks too.
The message is clear: The ‘reform’ platform irks them, and to hell with issue-based politics. All our leaders were weaned on Kanu culture, and old habits die hard. After all, Kenyan voters are gullible.
When Githongo spilled the beans on the Anglo Leasing scam, Ms Wrong says the Mt Kenya Mafia told her ‘you cannot burn the House of Mumbi to kill a rat’. Hopefully, Luos won’t gag Miguna. Let’s have more please, Miguna!

The writer is a former MP for Mandera Central and political economist." Courtesy of Standard Digital.

Monday, July 9, 2012

Terrorism Bill will violate fundamental human rights by Billow Kerrow

Hon. Billow Kerrow
"The recent spate of terrorist attacks in various parts of the country has focused debate once again on the need to enact anti-terrorism law urgently. Nearly 10 years ago, such an attempt failed when the Suppression of Terrorism Bill was rejected primarily on grounds that it was not homemade and infringed on human rights and civil liberties, and that it would be used by the Government to stifle dissent and strangle their opponents.
The Anti-Terrorism Police Unit has had minimal convictions against suspects. But the Unit has often been accused of illegal rendition of suspects, mostly Kenyans, to the US, Ethiopia, Somalia and Uganda; literary kidnapping people and spiriting them out of the country at night.
Muslims have complained of incessant harassment, arbitrary arrests, illegal detention and torture, among other human rights abuses, especially in Nairobi and Mombasa.
Ever since the enactment of the US Patriot Act in 2001, the war on terror has degenerated into an attrition of human rights globally. Criticisms of gross violation of human rights of suspects abound globally. The UN has decried the cruel, inhuman and degrading treatment of suspects and the rollback of civil rights of people in many countries under the guise of fighting terrorism.
Barely three months ago, several independent UN groups criticised Ethiopia for using anti-terrorism laws to convict three journalists and two opposition politicians to 14 years in prison. The proposed Prevention of Terrorism Bill 2012 establishes a legal framework for detection, prevention, investigation and punishment of terrorism.
But it is fundamentally flawed, and inconsistent with the Constitution. Government did not seek public participation in its drafting, instead hoping to take advantage of the current anxiety about terrorist attacks.
Terrorist act is given the widest possible definition, and includes the mere threat of action. Usual penal code offences such as murder, serious bodily harm to a person, arson, environmental pollution, intimidation, incitement, etc will be terrorist acts under this law.
It criminalises any form of activism and public dissent to compel Government ‘to do, or refrain from doing any act’, stifling the simple freedom to picket or demonstrate, unless such a ‘protest, demonstration or stoppage of work is not intended to result in any harm’.
As usual, it includes the often-abused, vague term of any ‘prejudice to national security or public safety’ and strangely ‘any act or threat of action intended to intimidate the public’ whatever that means.
The Bill waives the constitutional right to presumption of innocence until proven guilty. The burden of proof will be on a balance of probability and is on the suspect to prove his or her innocence in court, rather than the prosecution. You are guilty once you become a suspect.
Under section 29, the Bill limits ‘the rights and fundamental freedoms of a person or an entity’ under investigation, including the ‘right to privacy, freedom of expression, freedom of the media, freedom of conscience, religion, belief and the right to property’.
The right to a fair trial is curtailed, and the Bill creates offences that require no proof of intention or motive. Mere possession of an article connected with a terrorist is an offence! >>more at Standard Digital



Sunday, July 8, 2012

How our Parliament is undermining its own dignity by Billow Kerrow

"Many Kenyans have complained that Parliament was not up to speed in operationalising the Constitution as it had failed to meet several deadlines for enactment of various legislations. In some instances, internal wrangles in the Coalition simply made it difficult for such legislation to be tabled or debated. Partisan interests by the MPs have in other instances undermined speedy enactment of Bills, leading to MPs working overtime to pass Bills with evident errors.
To their embarrassment, the President this week threw out the omnibus Statutes Law (Miscellaneous) Amendment Bill 2012 provisions on party hopping and nomination of presidential vote losers that were ultra vires the Constitution. Several civil society groups had threatened to go to court to challenge these provisions amid public outcry. MPs failed to read public mood on matters constitutional, and were obsessed with self-preservation. Regrettably, the AG who is the principal legal advisor to the Government approved the proposals.
But it is not just in matters of the Constitution that the House is ridiculing itself these days. It is now the in-thing to throw out its own committee reports to shield its members, or to simply ignore or slight such reports for political expediency. This week, MPs rejected the Health Committee report on alleged irregularities on the rollout of the civil servants medical scheme. After spending months examining the scheme, the committee had concluded that the scheme should continue despite some irregularities in payments to certain clinics, but recommended that two ministers be investigated alongside several other State officials. I read the report and found it poorly drafted, and some of the recommendations were not supported by evidence in the main body of the report.
Nonetheless, the MPs simply threw out everything making the committee’s report an investigation that never was. Watching the debate in the House, it was clear some members, including committee members, did not even appreciate how the scheme worked. Minister Dalmas Otieno who was recommended for further investigation had to take time to explain his ministry’s involvement as the client for NHIF, and how the latter won competitively in the bid for the scheme. To some MPs, it was news that it is the Public Service ministry that owns the scheme and that NHIF was merely a contractor.
But the Budget Committee did a good job in its report on the Estimates of Revenue and Expenditure for 2012/2013 of June 6. They raised major concerns on the way Treasury crafts its budget incrementally and that it is was ‘business as usual’. Specifically, the committee noted how Treasury has rendered the Budget Policy Statement a meaningless ‘document of the willing’. Printed Estimates differed substantially from the Budget Policy Statement published only nine days apart, by over Sh200 billion. Yet, the Statement ‘strengthens the link between policy, planning and allocation of resources and should inform the printed Estimates’.
They challenged the lack of fiscal responsibility that is driving the budget deficit and the resultant huge public debt, and called for a halt to budget deficit and a focus on priorities and shedding off non-priority expenditure. The committee decried the rising public debt that now stands at 51 per cent of the GDP and went on and on. However, on June 21, the House passed a vote on account for Sh424 billion without even receiving the Appropriations Bill.
And on June 28, after meeting the Treasury team to allow some adjustments by the committee, the House approved the final Appropriations Bill for the full budget, well before the start of the financial year. And in the process, the vote on account for each ministry was altogether abandoned. Well, for all their sweet report earlier, when it came to crunch time, as usual they threw in the towel.
The writer is a former MP for Mandera Central and political economist." Courtesy of Standard Digital.
 
Our comment: Billow Kerrow is an honest political economist who fights for the heart and soul of Kenya. Kudos Mr. Kerrow, keep up the struggle. We are very concerned as American citizens why we've to give Kenya economic aid without demanding something be done about the rampant corruption and economic deprivation of a majority of its citizens. 

Could true and honest leaders stand up to be counted? by Billow Kerrow

"The more things change, the more they remain the same. This week provided a stark reminder of this galling adage of the conformists. MPs made a raft of changes to the Political Parties Act and the Elections Act that sought to reverse gains in the new dispensation. The move serves to short-change Kenyans’ aspirations and rekindle the dying ebb of impunity in public leadership. In Parliament, Finance Minister Njeru Githae circumvented constitutional provisions and drew half his budget provisions, as tactless MPs marvelled at his prowess and largesse.
They tried, unsuccessfully, to amend the law to allow presidential candidates to simultaneously vie for other elective seats, for soft landing. The MPs however passed amendments that would see these presidential candidates included in party lists for nominated seats.
This amendment may be challenged in court as the seats are specifically reserved for the minorities, the disabled, the youth and the marginalised; and certainly not political rejects. If you go for the top seat, be prepared to go home if you lose and graze cattle, as they do in the US or Europe. We cannot reward failures. If candidates cannot stand the heat, they should get out of the kitchen.

The House also passed amendments allowing MPs to defect across political parties until two months before the election. Of course, political parties in Kenya are now nothing more than political vehicles for elective posts during campaigns, after which they are dumped. It is fashionable to change parties as often as you change diapers, as ideology does not count anymore. Our party affiliations are about how deep the pocket is, and generosity of its benefactor’s runs. If you don’t like a party, you can ship out, but not days to the election after one loses in the primaries.
MPs unwittingly shot themselves in the foot though, when they raised academic qualifications for parliamentary and other elective offices to university degree. Most do not read the Bills before the House, and merely vote. It is this group, numbering over 80 MPs, that realised too late that they voted themselves into retirement. President Kibaki should not entertain their belated attempt to retract the amendment. The case for university qualification is overdue. A nation cannot grow a vibrant democracy and achieve an emerging economy status when its leadership is incompetent. Quite often, we have seen some of our MPs express profound ignorance about important national blueprints such as Vision 2030, let alone understand complex reports they come across daily in their oversight role over the Executive. There are also the many fraudulent transactions of the Anglo-Leasing, Goldenburg, Tokyogate or FPE scams type they purport to investigate.
And even more significant is their new role in recruiting and/or vetting senior public appointments; they have been poring over university degree qualifications and professional experiences of the interviewees and announcing ‘meritorious’ appointments. MPs will need to engage over-skilled technocrats, and highly educated and sophisticated public workforce in their duties. From next year, they will be required to hold to account a front bench of professionals and technocrats. Clearly, they will not be equal to the task if they are not schooled. True, leadership skills and integrity are not resident in graduates. Many academics in Parliament have only proved their mediocrity through sycophancy and unparalleled ignorance of national good. Well-heeled elite have only perfected professional misconduct and engaged in brazen raid of the public conscience. The public will be forgiven if they do not notice the difference between these learned MPs and those they want to bundle out. Nonetheless, MPs must lead from the front. They encourage learning in their constituencies, and vote the largest cash for education. They must not encourage mediocrity. That amendment must stand.
All the other changes need to be reversed, and quickly. The President must not allow what was a great political dispensation he midwifed to be rubbished by a political elite driven by unbridled greed.
The writer is a former MP for Mandera Central and political economist."  Courtesy of Standard Digital.