Going by recent actions taken by the government, keen observers have indicated that it is safe to speculate WE ARE BROKE!
The Key indicators of a broke government include;
1. Inability to meet recurrent expenditure; this is the most obvious signal, remember even Ann Waiguru’s favourite NYS projects (cleaning sewage channels in Kibera), besides no one other than the president himself who has gone public to declare the government cannot pay teachers. Top treasury officials hinted this week that the government was defaulting on her debt obligations.
Many suppliers to government agencies (ministries, departments, commissions) have confirmed that government has failed to pay for supplies already delivered since June 2015.
2. Reduced revenue collection; Kenya Revenue Authority has consistently missed the revenue targets for two years in a row. It is being alleged that people with influence in this regime have resorted to tax evasion. They have been allowed to avoid paying taxes as a reward for their in 2013 general election and also raising funds for 2017 elections.
3. Sudden increase in taxes (VAT et el); there are proposals to increase VAT and other taxes in a miscellaneous amendment Act popularly known as an omnibus piece legislation to be presented to parliament by Finance CS before end of the year.
3. Disposal of assets, excess domestic borrowing; various owned bodies have been offloading their capital assets, an example is the National Bank of Kenya. Domestic borrowing is on the rise thus increased interest rates.
4. Slow implementation of commissioned long term projects among others; all development projects have literally stalled as suppliers protest non payment for the works already completed. Stalled mult-billion projects have a serious negative impact in the economy as capital is tied. â€œstate capitalism,â€ bureaucrats have been directing borrowed cash into massive infrastructure projects or favoured projects like Geo thermal energy generation and electrification programmes.
5. Everywhere you look, the signs of rot are apparent, with inefficient, subsidized state-owned enterprises like KQ and Mumias Sugar gobble up credit while more nimble private firms starve.
The artificial booming property market defies any logical efforts to calm it down and many Kenyan middle class are rushing to investment in this huge bubble.
Most frightening, debt has risen precipitously. The risks have been heightened by the emergence of â€œshadow bankingâ€ â€” mysterious, unconventional sources often not shown in the balance sheet of the lenders.