Hakimani Economic Justice Forum
Jesuit Hakimani Centre (JHC) held a workshop under the Hakimani Economic Justice Forum on June 19th 2008. The workshop scrutinised the Kenyan Budget and its implications to the welfare concerns of the poor. JHC noted that the concept of job creation according to the Kenyan government is faulty. Creating jobs in the public sector such as the police department, health or education is just increasing the public expenditure which adds up to increasing taxes. Kenya needs the government to give incentives to investors especially local investors so as to create jobs for others. This will increase the government taxes and thus make it self sufficient.
It is the government responsibility to reduce government recurrent expenditure and increase its tax income net. This however will never happen with the Minister approach of "job creation". In economic sense what the government is doing is to improving the service delivery for Kenyans, not job creation. The government can not create jobs by hiring more police officers and teachers to teach in public schools and still pay them again with the tax payers’ money. What Kenya needs today is wealth creation and this will be lead to job creation.
The public forum had three speakers. First was Vincent Mang’ong’o, a JHC field research assistant who presented an analysis on how the budget had affected welfare concerns for slum dwellers. His presentation showed that the 2008-2009 financial year budget was read at a time when Kenya was experiencing rising cost of food items and high energy cost. JHC’s Economic Analyst Phares Mugo gave an analytical view of the rates of inflation the country was experiencing. Inflation rate soared to a historic high of 31.5 percent in the month of May driven by rising costs of essential commodities.
The post election crisis and rising world prices on petroleum and food stuffs had resulted in tough economic times for Kenya. It is with this scenario, that the minister had to make a budget that addressed economic reconstruction, addressing poverty inequalities, creating employment and developing the nation’s human capital.
The second speaker was Martin Masinde, Principle Analyst Research and Corporate Planning Department, Kenya Revenue Authority (KRA). He spoke on Key Milestones in Budget Making Process. He gave a back ground on the Budget making process, which can simply be defined as being a financial plan which outlines the major sources of revenue and how such revenues are to be expended. At the national level the budget is a statement that shows the receipts and outlays, and how they are to be financed in the interest of all citizens. Through the national budget, the Minister for Finance requests parliament’s authority to raise the estimated revenue and incur the approved expenditure for a given financial year. The budget contains the following:
- Recurrent expenditure
- Development expenditure
- Consolidated Fund Services (CFS), which include consists of financial estimates covering certain constitutional offices such as the Attorney General, Judges and repayment of debt.
In order to finance the above expenditures, the government generates revenue from a wide variety of sources. The other sources include revenue raised from the public or borrowed on behalf of the public by the government.
He goes further to explain why is it important to understand the budget since majority still consider the budget a distant document and the process a preserve of government officials in the Ministry of Finance. Yet, if there is one government document that has a great impact on the day-to-day life of every Kenyan, it is the budget. The impact of the budget on the welfare of citizens usually becomes evident in the period after budget day when the new measures outlined in the budget begin to take effect.
The budget making process involves three phases which he clearly puts as:
Budget Planning and Preparation
The formulation of the annual national budget is preceded by the preparation of both the National and District Development Plans. The Medium Term Expenditure Framework (MTEF) has been the new budgetary system that seeks to link policy making with planning and implementation of budgeted projects. Development of a macroeconomic framework for projection of revenues and expenditures over three years takes precedent. Sector reviews are presented to the treasury to ensure that all programmes have been accurately costed and the objectives, outputs and activities fully specified. Using the macroeconomic framework and the sectoral reviews, the Ministry of Finance prepares a strategic expenditure framework. This is then forwarded to the Cabinet for discussion and approval. The criteria for determining inter-sectoral shares should receive explicit consideration and political endorsement before each sector is informed. The ministry of finance then reviews the ministerial estimates prepares the detailed budget and MTEF documents and presents them to parliament for approval.
Phase Two: Budget Proposal and Debate
This phase lasts between June and October every year and remains the most controversial stage in the budget process. There are three major stages in this phase.
In the first stage the Minister for Finance is required by law to present the Budget Speech on or before 20th June in accordance with the Constitution. The Speech is usually accompanied by three other documents, namely the Appropriations Bill (which contains proposed expenditure allocations), the Finance Bill (which contains taxation proposals) and the Statistical Annexes to the budget
The second stage entails a debate on the broad policy proposals contained in the Budget Speech. During the period after the reading of the budget, Parliament debates government’s economic policy and strategies as outlined in the Financial Statements and the Budget Speech. This stage is usually characterised by the passing of the Vote on Account and the Finance Bill. In this session the Minister for Finance interrupts the policy debate to seek parliament’s approval to spend up to 50% of the allocated expenditures pending the substantive ministerial vote-by-vote debate.
Lastly, the House then debates and approves the Appropriations Bill on a ministry-by-ministry basis. During this session, members of parliament have the opportunity to propose nominal reductions on specific items (sub-votes) as a sanction for non-performance of the Ministry in question. The law requires that this debate be concluded by the end of the month of October subsequent to the reading of the budget. At this juncture, all pending votes and estimates are passed unanimously under the “Guillotine Method.”
Phase Three: Budget Execution (implementation)
In this phase of the budget process entails the actual disbursement of funds for the various user-departments and ministries. Upon approval of the budget and the passing of the Finance and Appropriation Acts, the government is effectively authorized to raise revenue through taxes and to spend them to the approved estimates. In exceptional circumstances, however, ministries may exceed the approved allocations as has happened during the post election violence. In such situations, the Minister for Finance authorizes the withdrawals but presents the Supplementary Estimates for parliamentary approval. Budgetary resources are usually disbursed to line ministries and departments through exchequer withdrawals. According to our laws, no such withdrawal may be made without the authority and approval of the Controller and Auditor General (C&AG). Once resources are disbursed to the line ministries they are required to open Vote Books in which they record all Exchequer transfers. The Permanent Secretaries to the Ministries are the authorized Accounting Officers and assume full responsibility for all budgetary resources once disbursed. They are however allowed to grant Authority to Incur Expenditure (AIE) to the various District Commissioners and other officers in furtherance of ministry programmes at the district level.
Lastly, Dorcas Wangechi, Project Coordinator, Consumer Information Network (CIN), gave an enlightening expose on Consumer Rights and their Implementation in the Social Sector. In her presentation she highlights 8 rights that consumers are entitled to: basic needs, choice, informed, to seek redress, be heard, to safety, to consumer education and a healthy environment.
- Poverty levels in Kenya are on the increase with the gap between the few rich and majority poor widening.
- Currently there is chronic food insecurity which is estimated to affect 10 .3 million Kenyans by the end of the year. Post election violence, increase in fuel prices and cereals at international market have worsened the food security situation.
- Health care services are more expensive except for children under 5 years which is free in public hospital. It is further estimated that 39.5% urban & 43.8% rural do not seek medical attention when sick.
The last session was a brief open discussion on policy recommendations. The following were noted:
- A critical requirement of transparency in the context of democracy is the opportunity for parliament, citizens and other stakeholders to assess whether the government undertook what it planned in the budget.
- Budget controls are and should be implemented, to ensure that planned and approved expenditures eventually materialize and that those responsible for budget implementation do not engage in unauthorized activities.
- Budgetary controls should be exercised at three levels:
- Executive (governmental) controls mainly by the Treasury (Ministry of Finance)
- Parliamentary control through PAC, PIC and the Office of the Controller and Auditor- General and Auditor General (Corporations).
- Citizen controls through civic lobbies, advocacy and “whistle blowing” in the event of financial impropriety by government officers.
- The civil society has a critical role in monitoring the implementation of the national budget. Citizen based monitoring takes place at three levels.
- Parliament: As the representative body of all citizens, parliament keeps check on the executive according to the principle of “no taxation without representation” as well as the principle of separation of powers.
- The Executive: The executive arm of the government implements the policies and proposals as approved by parliament. The role of the government is therefore to propose fiscal policy and define the budgetary policy in line with the broad national socio-political and economic objectives.
- Stakeholder groups: Among the beneficiaries of the budget include all institutions, ministries, state agencies and companies that are financed out of the national budget.
- The Citizenry: The citizens are the ultimate beneficiaries of all budgetary resources. Notwithstanding their representation in parliament by their respective Members of a direct duty of ensuring that all the other players in the budget act in their best interest.
The next Hakimani Economic Justice Forum will be held in two months time for follow up
Peace building Workshop - Kisumu Diocese
Ukweli Pastoral Centre
June 19 - 20, 2008
Kisumu was one of the hardest hit areas in the post-election violence of January-February 2008. Although the violence has subsided, the Kisumu region faces the challenges of economic recovery, social and psychological healing, and issues surrounding the resettlement of IDPs.
Jesuit Hakimani Centre collaborated with the Office for Justice and Peace of the Catholic Archdiocese of Kisumu to organize a Training of Trainers peacebuilding workshop for the peace and justice delegates from local parishes, who would then bring their learning back to their home diocese.
The pedagogical style of the workshop was highly facilitative. Key themes to be covered were drawn from the list of participants’ concerns, and learning took place primarily through large group discussion. The facilitator posed questions and drew key distinctions for the group to wrestle with, and participants were invited to respond to each other’s concerns, instead of waiting for the “right answer” from the facilitator. Small group assignments were given so that participants could practice using the analytic tools presented, and were followed by small group presentations, so the large group could benefit from their reflections.
EMERGING ISSUES
- The workshop participants had little faith in Kenya’s political leadership. They long for individuals who can provide effective and inspirational leadership; oversee Kenya’s human, natural and financial resources and their fair distribution; seek out and develop new and expanded directions for national programs and services; and ensure adequate resources to meet the needs of the population.
- Participants expressed the view that the hierarchy of the Catholic Church has failed to exercise leadership in the wake of the post-election crisis. The Church seems stuck in her own ethnic divisions, and, rather than helping the flock inform its conscience with regard to the issues of the day, her leaders seem to have been co-opted by those in power. Rather than being an instrument for national transformation and healing, then, the actions of Church leaders have exacerbated the problem. Participants voiced a desire for more prophetic leadership.
Ambassadors for peace
The Ambassadors of peace visited the Diocese of Kakamega in support of peace initiatives at Turbo. The event was attended by Archbishop emeritus Ndingi Mwana a’ Nzeki and Rev. Dr. Timothy Njoya, they called for forgiveness and reconciliation as tool for peace and peaceful co-existence. Archbishop Emeritus Ndingi requested the community to seek the truth as it would set them free, the Archbishop also stated that his office is willing to help the IDPs and also open to the local administration to report on any matter related to the IDPs. This comment was directed to the District Commissioner and the local administration that were in attendance. The ambassadors of peace have an upcoming event this weekend- the 28th June 2008. Archbishop emeritus Ndingi Mwana a’ Nzeki will be visting Kisumu to promote peace initatives at the ground. The event shall take place in Koru Center about forty Kilometres from Kisumu City.
Psychosocial Initiative Workshop
Molo, Ukarimu Centre
19 - 21 June 2008
In order to break this cycle of violence and anger realized as a result of the Post Election Conflicts, Jesuit Hakimani Center initiated psycho-social programs in the most and badly affected regions of the country. Molo (Rift Valley Province) was one of the badly hit regions, and it is in this background that the initiative has been going on in schools to help instill the lost hope, as well as to promote peaceful co-existence among societies. The school is therefore used as an instrument of change, in which the Stakeholders need to reconstruct the learning environment to be friendly to IDPs children and encourage reconciliation. It also needs to promote healing and build trust among different ethnic groups. The teachers are therefore encouraged to play the vital role in igniting the process of healing in line with the National goals of education. This was then seen possible by empowering teachers with trauma management skills necessary for personal healing and hence break the vicious cycle of violence.
The trauma awareness session focused mostly on understanding trauma and its effects to survivors. The session also included manifestations in school situation where teachers pointed the behavioral changes realized in pupils after the Post election violence. The few pointed out included: Guiltiness, Fear, Withdrawal, Aloneness, Arrogance, Lack of concentration.
New Publication
Elias Omondi (ed) has published a new book: Peace Weavers: Methodologies of Peace Building in Africa. (Nairobi: Paulines Publications Africa, 2008). Available at Catholic and selected bookshops in Africa. The Peace Weavers initiative is an attempt to develop various methodologies of social transformation in Africa at both national and international levels. The collection of practitioners and scholarly articles focus on five major themes: Advocacy and networking, the role of religion in peace-building, multi-dimensional approaches to peace building, economic justice, and spirituality of peace building and reconciliation.
Call for Contributions:
Hakimani: Jesuit Journal of Social Justice in Eastern Africa
In seeking to inform social action, Jesuit Hakimani Centre (JHC) publishes Hakimani: Jesuit Journal of Social Justice in Eastern Africa (ISSN 1995-6339). Hakimani is published quarterly and engages critical analysis on all aspects of social justice. Hakimani focuses on structural change by identifying the structures that create and/or perpetuate social injustices, and what can be done to change these.
Hakimani is inviting articles for its Issue theme for the October- December 2008 edition, State of Democracy in the Region. Governments have completely been unable or unwilling to move on key reform areas that their citizens expect and yearn for. Consequently, even the gains obtained in areas where these governments had scored well e.g. provision of free primary school education and public transport reforms the overall result of these government’s achievement is diluted by its failures and hazy commitments on key issues such as democracy, constitutional reforms, respect for human rights, transitional justice, eradication of official graft and rejuvenation of the economy. Outside the Issue theme, Hakimani also invites contributions in other areas of social justice, particularly inter-religious harmony, women’s issues, book reviews and tributes to those Eastern Africans that have promoted social justice. Deadline for submissions is 15th August 2008.
Copies of Hakimani are available at Nairobi, Kampala, Dar es Salaam, Lusaka, Johannesburg, Lagos and Abuja at the Paulines bookstores (for addresses, see www.paulinesafrica.org or email distribution@paulinesafrica.org.
For any enquiries on subscriptions and contributions, please send us an email at editor@jesuithakimani.org
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