Categories
Poverty

Development and financial difficulties

financial-pressureAt a time when wealthy countries with very large amounts of government revenue struggle to balance their budgets, the economic pressures on the governments of poor countries must be immense, and yet governments often fail to recognise the realities. The amount of revenue which the Kenyan government raises from its taxpayers is approximately 3% of that raised by the Australian government, yet Kenyan members of parliament are paid more.

Kenya has been experiencing several years of economic growth, and perhaps this has led to public perception that the treasury is a bottomless source of free money. The government used arguments of fiscal responsibility when teachers and other public servants have sought pay rises (before giving in and granting significant rises to teachers, police, nurses and lecturers), but then on two occasions passed laws granting members of parliament huge bonuses without any consideration of economic effects.

According to the current year’s Kenyan budget, more than 30% of proposed expenditure was to be financed by borrowings. The actual figure may be closer to 50% as revenue collections are well below target and large sums have been spent on pay rises, military action in Somalia, and election preparations. Expenses will multiply after the elections when a new level of regional government will be added to the existing governance structure. Kenya has some serious financial challenges ahead.