REMARKS OF RT. HON RAILA ODINGA; EGH AT THE ANNUAL LAW SOCIETY OF KENYA CONFERENCE; AUGUST 18, 2016;
CORPORATE GOVERNANCE, CORRUPTION AND FAILING INSTITUTIONS:
It is a pleasure to speak to the members of the legal fraternity at this critical moment in the life of our country.
Critical because we are in the middle of a debate on how to reform a most critical institution in the making of our nation; the Independent Electoral and Boundaries Commission.
We are in the middle of a very necessary debate on how to make our elections reflect the wishes of the people; how to make every vote count and how to ensure every vote is counted. In the process, we are also discussing the current and future management of our country.
It is my position that only the IEBC stands between the people of Kenya and their desire for an honest and caring government.
Only six years ago, we unveiled what was easily seen as one of the most progressive constitutions in the world. Today, however, we are taking a closer look and once again we are saying we must jump-start reforms in virtually all our key governance institutions; the Judiciary, the Police, the Ethics and Anti-Corruption Commission, the schools, the financial institutions and even the Legislature. All these institutions are suffering from the impediments created by a government that is resisting change and striving to return the country to the old order.
The question of governance in our country naturally ropes in issues like corruption and the state of our institutions. August 2016 is therefore a good time to share thoughts on corporate governance, corruption and the working of institutions.
I believe you will agree with me that sound governance is eluding us. Our institutions are failing us. Corruption and dishonesty have gained the upper hand. Everyone is paying a heavy price.
Kenya has slipped to the dark ages with regard to the observation of the rule of law and respect for human rights. We need look no further than the return of extra-Judicial killings have resumed in full consistency and brutality. Recently, these killings claimed a prominent member of the legal fraternity Willie Kimani, his client Josphat Mwendwa and their taxi driver Joseph Muiruri. The killings have claimed the lives of many Muslim preachers here at the Coast in addition to the lives of whistle blowers like Jacob Juma.
Ensuring a decent standard of living for all citizens is a cardinal duty of the State. It is a critical element of governance. But let’s look at the state of our economy. Officially, we are being told that our economy is doing great, that Kenya is the preferred investment destination in Africa and that we have never had it so good.
We are not being told that never in history has this nation wallowed in so much debt. The Government says the ratio of our national debt to the GDP stands at 48 per cent. Independent analysts, whom I believe are right, say our debt ratio is at least 52.6 per cent of the GDP.
In the past three years, the public debt has risen from KSH1.633 trillion to KSH 3.239 trillion, an increase of KSH 1.606 trillion or 98 per cent. In the 2015/2016 Financial Year, the National Treasury provided for KSH 362 billion for debt repayment. This figure has risen to KSH433 billion in 2016/2017, an increase of KSH 71 billion or 20 per cent in one year. At this rate, in five years, this country will be spending all the tax collected in repaying public debts with nothing left for capital and recurrent expenditures.
The deeper we have gotten into debt, the more we have borrowed. Increasing public borrowing has resulted in undesirable fiscal consequences such as high interest rates, inflation and overburdening future generations.
And when we are asked to rein-in banks to enable our citizens get some relief, we prevaricate. That can’t be good corporate governance. It is a pointer to recklessness and conspiracy against citizens.
At no time in our history have we carried a tax burden as heavy as we do now. In January 2015, the government reintroduced Capital Gains Tax, thirty years after it was abandoned. Earlier in 2014, the Government announced plans to abolish many corporate tax holidays. This was hailed as a means to broaden tax base and fund many essential services. Instead, the reverse has happened. We have gone deeper into taxes especially VAT, pushing cost of living higher up. Last week, the price of petrol, diesel, and paraffin went up for the second time in less than two months. Last July, prices of petrol, diesel and paraffin went up because the Government increased levy by up to 50 per cent.
We are not in debt problem because we haven’t taxed enough. We are in debt because we steal much of what we collect and what we borrow, then we spend what remains on wrong priorities. We haven’t balanced our budget in recent years despite huge taxes and growing loans.
The reason our taxes and debts are rising while without commensurate impact on service delivery and the lives of our people is corruption.
The president himself declared corruption to be a national security threat in his State of the Nation speech in November 2015. Little in the way of inspiring action has been forthcoming after the speech.
A recent survey by auditors PricewaterhouseCoopers found Kenya to be the world’s third most corrupt country in terms of the prevalence of economic crimes.
Corruption has left us exposed in terms of security. Terrorist attacks are made easy by customs and border officials on the take and registration clerks ready to sell Kenya’s identification documents to the highest bidder.
Corruption has compromised our capacity to respond to terrorists. The August edition of the Nairobi Law Monthly magazine reports of 30 armoured personnel carriers purchased by the Kenya government, in a shroud of secrecy, from China and which failed to work on day one. According to the magazine, key components of these vehicles including shock absorbers and air conditioning, don’t work. Almost all have been parked since they were commissioned. The government has not responded to this devastating report. Your guess is as good as mine on what transpired and why they are silent.
Corruption is turning us into the laughing stock of the world. In November 2015, The New York Times published a story titled An Anticorruption Plea in Kenya: ‘Please, Just Steal a Little.
In April 2016, America’s PBS aired a10-minute documentary highlighting the extent to which corruption is ailing our country. It began with the plight of athlete Hillary Kiplimo, who finished third in the 2015 Standard Chartered Marathon in Nairobi, but did not receive his prize money of about Sh350, 000. Instead, his name was replaced with that of one Julius Korir Kiplimo, despite being awarded a medal. We have lately seen how this corruption has played out before the eyes of the world in Brazil. All these point to a nation in a crisis of governance.
Away from the material and financial corruption that is engulfing our nation is the moral corruption that is being drilled in our youth through false gospel of riches. This new gospel has powerful, energetic and monied priests. They preach to our youth in schools and churches and markets that it’s what you have, not how you got it that counts. They preach that that success is measured in riches and it comes not from hard work but from cutting corners, deals, cheating and stealing from fellow citizens and from the government.
All these failures are anchored by our struggling and failing institutions. Well performing nations always stand on the shoulders of well-performing public institutions. The story of the IEBC, the EACC, the Police, and the Judiciary in part is that of institutions that have failed to inspire the confidence of the people. The fumbling by the EACC as money was being stolen in the NYS and over Eurobond, the inability of the State to enforce security without extra-judicial killings and the arbitrary arrests of citizens equally point to institutions failing to earn their place in the management of the nation.
Yet Kenya goes into a general election in a year’s time. Traditionally, major episodes of corruption have accompanied polls. Whether you are talking about Goldenberg or Anglo Leasing or sale of forest land and public plots or loss of money at the OP and National Treasury or printing of money, they usually happen around election time. We do not know what is afoot. Watch ye and pray, as Jesus Christ would have put it.
Then there is the moral corruption that is being drilled in our youth through a false gospel of riches being spread by powerful, energetic and monied priests. They preach to our youth in schools and churches and markets that it’s what you have, not how you got it that counts. They preach that that success comes not from hard work but from cutting corners, deals, cheating and stealing from fellow citizens and from the government. You went to Law school sometimes after difficult years in difficult high schools. You surely know success does not come easy.
Yet lawyers, who by training and experience, are uniquely fitted to provide guidance and leadership in societies are loudly silent today.
Lawyers who ought to stand up for the rule of law have chosen to remain silent when the rule of law is under attack, when peaceful and legal protests are being violently broken up by the State and when Kenyans exercising their freedom of assembly and expression are being wounded and killed by the State. When freedom to receive and impart information is being punished with many young Kenyans arrested over Facebook posts and tweets, only a handful of lawyers have been willing to speak out for the mostly young, poor citizens being harassed by the State.
When the Government itself has broken laws it swore to defend; only a handful of lawyers have been willing to stand up. Lawyers have remained silent in the face of ballooning debt despite clear stipulation of Article 201 of our Constitution that there shall be openness and accountability, including public participation in financial matters; that public finance system shall promote an equitable society, the burden of taxation shall be shared fairly and the burdens and benefits of the use of resources and public borrowing shall be shared equitably between present and future generations.
As lawyers, you have responsibility to ensure that the machinery available for our country to deal with these governance challenges are functioning and held accountable.
You must focus on clarifying the rules and building a judicial system that can enforce those rules and resolve disputes without fear or favour. You have a duty to champion the removal of individuals linked to scandal, subversion of justice and law and failure of judgment in public offices. You have a duty to reassure our citizens that you will not sit by and watch public service being diminished by disgraces of officers trusted with public duty.
A credible prosecution of some of those behind the many ills bedeviling the nation and its institutions will send the right signals and raise the bar on the requirements for public service.
Few are better placed to pursue this course than the lawyers.