How much of your salary or company earnings are paid as tax? Divide that shilling figure by 130 and that’s the number of kilogrammes of unga (maize flour) your own direct tax payment will subsidise this next four weeks: maybe as many as 200kg if you’re a way-above-average earner, on a gross of more than Sh100,000 a month.
Yet 200kg of subsidised unga is enough to feed just 15 people for the month. And, even more, unfortunately, we only have around 80,000 Kenyans earning more than Sh100,000 a month who are paying taxes.
So all our top-end PAYE funds will be eaten up delivering unga subsidies for 1.2 million people, or around 300,000 families, leaving us looking for other sources of funds to pay the millers for any unga eaten by the other 97.8 percent of Kenyans.
We can eat up all the income taxes from lower-paid Kenyans, but this subsidy is going to cost Sh1,755 a month for every consumer, which doesn’t make for many people covered out of the tax bill on most lower salaries.
For, an adequate volume of unga per person per day is 450 grammes, which requires 45 percent of that Sh130 subsidy every day.
To cover that sum, we can also start rediverting corporate taxes on profits, and indirect taxes, such as VAT and customs and excise, but compute the numbers across all these revenue sources, and a single fact becomes clear: wonderful as this momentary pre-election subsidy is, it’s a total sink hole for public funds. Not even a sink hole, maybe a black hole, sucking everything in.
And what it spells for post-election Kenya is cynical. The government is now so indebted that the taxes it collects barely cover, and sometimes don’t even cover, what are called recurrent expenses, which is primarily all those teachers’ salaries and police, and army, and ministry workers, let alone actual medical supplies, like some oxygen.
So fresh from our new vote, all our salary and oxygen money will have gone to millers, but the police will still want to be paid, and sick Kenyans will still be arriving at hospitals.
As it is, I have long thought, as we see the two lead contenders battle so fiercely for the next presidency, that, this time, based on rows of decisions for which only one of them can be held partially responsible, the presidency will be a poisoned chalice.
In business, I learnt far too late, but eventually, that there are some contracts that are so stacked against any chance of successful delivery that the best possible course of action is to retreat and let some other person or company be the fall guy, when, extremely unsurprisingly, they fail to deliver the impossible.
And so it is now with the Kenyan presidency. Whoever walks into office after the August election is going to find that disaster has befallen them.
Cash will need to be mustered to make international debt repayments, which, if failed, will lead to the potential of closed banking nationwide, and closed ATMs: it would seem like M-Pesa might rescue us, but a small mention, if our banking system goes into the gridlock experienced in other nations, like Russia, or Greece, or Brazil, the mobile money transfers won’t carry on happily delivering funds. They will stop too.
But if the money is ringfenced to prevent a debt default, what will pay for all those police salaries and hospital supplies?
Do looking ahead, be it Baba’s army, or Ruto’s army, what will people need to know and understand about public finance not to feel betrayed when they are back to paying not Sh230, but even sh250, Sh270 or Sh300 per kg of unga, and their chosen leader isn’t delivering a subsidy, like the last president did.
Now, stand up, for the most unpopular and doomed political job one can even imagine.
