What? Are we skint already? The Nation reports that various government ministries are going to reduce spending in order to fund subsidies on maize flour. Money is to be diverted from road construction funds and other ministries are expected to implement “cost-saving measures” (translation: budget cuts) to pay for the subsidies.
According to Treasure PS Joseph Kinyua, the belt-tightening will “create fiscal space to finance the new challenges.” Doesn’t he have a lovely way with words? Mr. Kinyua made no mention of the fate of the Thika Road project.
The government appears to fear that increased food costs could lead to rioting, and is therefore eager to do all it can to cling on to power help out needy citizens. Meanwhile, expect a magic show when the supplementary budget is released in the new year, because thanks to the credit crunch, plans for a sovereign bond have been shelved. The government is going to have to do some seriously creative accounting to raise money on the markets and keep interest rates low, as it has pledged to do.
It’s not all bad news, however. Italy, that bastion of financial prudence, has converted our debts into a grant that is earmarked for improvements to infrastructure. Provided all the money is spent in the manner for which it is intended, life might improve for some.
At the same time, the High Court, in its wisdom, has decided not to compel our elected representatives to pay taxes. So the country is essentially living on its credit card, but members of the family don’t see why they should contribute to payments. The sad thing is we can only disown them at election time.
[Image by JP Puerta]