Emerging Markets, Frontier Markets

Africa Needs Austerity Plans Targeting Government

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By Anzetse Were

Analysts watching Kenya are anxious, and with reason. Last week the government announced that it will borrow a confounding Sh78.8 billion from local banks to plug a 600 billion hole in the budget. As a result, many of us are asking ‘what happened to the Eurobond billions’? Didn’t we float the bond to avoid this precise type of problem? My contention is the problem lies in the type of leaders Kenya, and indeed much of Africa, is electing.

The basic problem with our current leadership culture, at least in Kenya, is that the wrong types of people aspire to and therefore get into elected office. Let us look at some facts; two years ago a study by the IMF showed that in Kenya the MPs’ basic pay, which excludes allowances, is 76 times Kenya’s GDP per capita of Sh84,624. 76 times. The study further found that four out of five of the highest paid MPs in the world are African: Nigeria, Kenya, Ghana and South Africa. They get more than their peers in the developed economies of US, Britain and Japan. Another study by The Economist indicated that Kenyans pay political leaders the most in the world when taken as a ratio of GDP per person. This is clearly lunacy. The consequences of this lunacy is what is biting Kenya and much of Africa financially right now, and is one of the reasons government seems to be unable to manage finances and is on an endless borrowing spree. Austerity is needed.

As is stands, one can confidently surmise that those who run for office in Kenya (and Africa) are interested in two things: firstly, their core interest is to use elected office to enter a plush lifestyle through ridiculous and unjustified salaries and benefit packages. Secondly, elected office provides ample opportunity to engage in corruption, and those elected seem do so with the sense of entitlement that comes with the ‘it’s my turn to eat’ mantra apparently so enthusiastically adhered to by them. As a result, Kenyan elected office attracts a certain type of person; a person driven by avarice. This person views political office as a means of enrichment rather than as an opportunity to serve and build the country. Through outrageous wages and benefits, Kenya has created criteria where those with self-seeking interests rather than those with altruistic interests self-select to run for office. It’s an open secret in Africa that getting into elected office is probably the quickest way to get rich. Is it then a wonder that the culture of servant leadership hasn’t taken root in Kenya or across much of the continent?

To fix this problem austerity plans targeting government are desperately needed that target the wages and perks of elected office. We should create such trim and lean governments where those in elected office get so little, that two things happen. Firstly, those with voracious self-seeking appetites will no longer be attracted to run for office because the modest salaries and benefit packages will not fit into their plans for quick self-enrichment. As a result, an environment will be created those whose priority is building the nation and continent will self-select to vie for office.

Secondly, the sincerely ludicrous government recurrent bills will come down substantially. No longer will being in elected be synonymous with going to five star hotels for ‘seminars’ and ‘conferences’ or taking expensive trips to foreign metropolises for ‘learning trips’. Being in government will mean you have to take public transport or buy a humble car to take you to and from the office.

So yes, Kenya needs austerity plans– for government. These plans will not only change the type of person who seeks to run for office, it will create a spending pattern where public funds are more likely to go to development rather than into recurrent expenditure or the pockets of elected officials.

This article first appeared in my column with the Business Daily on October 18, 2015

Anzetse Were is a development economist based in Kenya and a weekly columnist for the Business Daily.  Twitter:@anzetse, email: anzetsew@emergingequity.org

About Anzetse Were

I'm an optimistic cynic. Born in Africa, raised all over the world, I have a passion to see Africa take its rightful place in the world. Long weary of the Africa bashing, continental character assassination and negative branding I am determined to ask: What can Africa do right particularly with regards to economic development? Most of my pieces will be on Africa's economies. Some pieces will be more formal than others but the guiding thrust is to become one of the growing voices that believe in Africa...We're here to stay. Follow me on twitter: @anzetse


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