The former vice president and deputy prime minister has recently been critical of the government’s handling of the economy. On TV he made six key claims which we took a closer look at.
We asked Mudavadi for evidence for the claims, and will update this report with his response. In the interview, he frequently referred to Yatani’s budget statement.
Current levels of the public debt are a national talking point. There is a proposal to set up an agency to oversee this. In his speech, Yatani said Kenya had to be “cautious about future debt accumulation” and would look to borrow cheaply.
But the budget had not shown any urgency to correct a “critical landmine”, Mudavadi said. He gave the amount set aside for debt repayment as “KSh900 billion, almost KSh1 trillion”.
“We are dealing with a situation where the amount set aside for repayment of the debt is much higher than all the money that Yatani is putting together for development expenditure,” he said. “This is a crisis!”
How much for loan payments?
How much has been budgeted for debt repayment? A report from the national assembly’s budget committee said that debt service for the 2020/21 financial year was an estimated KSh904.7 billion.
The cost of debt financing “actually consumes more financial resources than development expenditure for which the debt is obtained”, the committee said.
What about for development projects?
The budget committee approved KSh637.6 billion as the development budget. The treasury had proposed KSh584.3 billion, while minister Yatani said the amount was KSh633.1 billion in his budget speech. All these figures are less than that set aside for repaying debt.
To evaluate how much money has been used over the years to repay debt and for development, the monthly statements issued by treasury are beneficial, James Muraguri told Africa Check. He is the chief executive of the Institute of Public Finance-Kenya.
“This is the best document to use because it provides the actual money that is released out of the consolidated fund,” Muraguri said.
The consolidated fund is where all income raised and revenues collected by the national government is kept. The fund first provides for obligatory payments such as debt repayments, salaries for some state officers and pensions. Only after these are paid can other departments access the money.
We checked all the treasury’s annual statements since 2013, when president Uhuru Kenyatta’s administration started, to establish if debt repayments exceeding the development budget was a once off, or a trend.
|Debt service versus development expenditure|
|Financial year||Debt service (KSh bn)||Development expenditure (KSh bn)|
The numbers show debt repayments have exceeded the development budget for the last six financial years. The budgeted figures for the 2019/20 financial year, which ended 30 June, also show debt service was expected to take up KSh696.6 billion, while the development budget was KSh704.2 billion.
However, by 29 May, a month before the end of the financial year, KSh639.2 billion had been issued to pay debts, while KSh295 billion had been issued for development expenditure. We therefore rate Mudavadi’s claim as correct.
|What’s the crisis?
Kenya’s economy is import dependent, James Muraguri, the chief executive of the Institute of Public Finance-Kenya told Africa Check. This means it imports the bulk of goods meant for its domestic market.
More than half of Kenya’s public debt is owed to foreign creditors. Servicing this debt and paying for its imports must be in dollars. With this crucial foreign currency leaving the country, the country’s economy can be left exposed.
“The pressure on the current account at the central bank will be felt due to demand for the [US] dollar and the shilling losing ground,” Muraguri said. (Note: For more on the functions of foreign exchange reserves, read here.)
In the budget speech, the finance minister proposed funding of KSh37.3 billion to parliament and KSh18.1 billion to the judiciary for the 2020/21 financial year. The estimates approved by parliament show that it will get KSh37.7 billion while the judiciary will get KSh18.1 billion.
The judiciary’s budget works out to about 48% of parliament’s allocation.
We therefore rate Mudavadi’s statement as mostly correct.
“Sometimes they are called even on a Saturday, in an emergency,” he said.
We asked the judiciary if this was correct.
“Courts do not usually sit on Saturday or Sunday unless they have express permission from the chief justice in writing, and that has to be under exceptional circumstances,” Catherine Wambui, acting director of communications at the judiciary, told Africa Check.
She said this was rare, and cited the 14-day deadline imposed by Kenya’s constitution within which presidential election petitions must be determined as an example of when this had happened.
During presidential election petition hearings in 2013 and in 2017, the judiciary sat on Saturday and Sunday.
But it is not the norm for Kenyan courts to sit six days a week. They sit from Monday to Friday and do not sit on public holidays.
Judicial staff may also be called in to work on public holidays to “to perform certain essential duties”, according to the judiciary’s human resources manual.
The sittings of both houses of Kenya’s parliament are prescribed in the standing orders. The national assembly is required to “meet at 9.30 am on Wednesday and at 2.30 pm on Tuesday, Wednesday, and Thursday”. The senate meets at “2.30 pm on Tuesday, Wednesday and Thursday”.
However, the rules allow each of the two houses, by resolution “to meet at any other time on a sitting day; or to meet on any other day, in order to transact business”.
Caroline Gaita is the chief executive of Mzalendo Trust, a project that keeps tabs on parliamentary performance in Kenya. She said the perception that sitting days are the only working days for the Kenyan parliament was misleading.
Equating the sitting days to their working days is doing a disservice to their role, she told Africa Check.
“The work of a member of parliament cannot be limited to the three days when the house sits,” she told Africa Check. “That is for their legislative role. They have other roles such as oversight and representation which are done through committees and/or physical visits to the constituencies”.
She added: “On Fridays, throughout the weekend, and on Mondays they are usually in the constituencies. Committee meetings are usually held on Tuesday and Thursday mornings.”
We therefore rate Mudavadi’s claim as misleading.
It covers the 2018/19 financial year and shows the judiciary had 5,584 employees on 30 June 2019. These were 153 judges, 546 magistrates and 4,885 other employees including registrars, legal researchers, law clerks and court assistants.
In the financial year 2019/20 the judiciary was expected to hire 300 new employees.
At the highest, the number of employees in the judiciary could only be 5,884. Mudavadi was off the mark by more than 1,000 employees. We therefore rate his claim as incorrect.
Africa Check has previously fact-checked this claim and found out that Kenya’s bicameral parliament had 9,940 staff as of 19 March 2019.
The clerk of the senate, Jeremiah Nyegenye, who is also the secretary of the parliamentary service commission, the administrative arm of parliament, shared data with Africa Check showing that in March 2019 there were:
- 830 permanent and pensionable parliamentary staff, 282 contract staff, and 10 seconded staff
- 6,740 constituency staff in the 290 constituencies and 47 county offices
- 46 staff serving 12 nominated lawmakers
- In the senate, 940 staff serving 47 elected senators, and 64 serving nominated senators
- 1,022 police officers attached to lawmakers in both houses
(Note: We have reached out to Nyegenye about the latest employee numbers in parliament. We’ll update this report when we get his response.)
This is well over 1,000 employees. We therefore rate Mudavadi’s claim as incorrect.
© Copyright Africa Check 2020. Read our republishing guidelines. You may reproduce this piece or content from it for the purpose of reporting and/or discussing news and current events. This is subject to: Crediting Africa Check in the byline, keeping all hyperlinks to the sources used and adding this sentence at the end of your publication: “This report was written by Africa Check, a non-partisan fact-checking organisation. View the original piece on their website", with a link back to this page.