Treasury Nominee John Mbadi Says Kenya’s Constitution ‘Too Expensive’

John Mbadi, the Treasury Cabinet Secretary nominee, has ignited a debate with his proposals to overhaul Kenya’s devolution model and fiscal policies. During his vetting by the Committee on Appointments, Mbadi emphasized the need to transition from the current county-based system to a more consolidated regional government framework, citing financial inefficiencies and sustainability concerns.

“This constitution is very expensive,” Mbadi stated emphatically. “We should have had counties as agents of development, not as governments.”

Since the implementation of the 2010 Constitution, Kenya has established 47 county governments, each with its own administrative and financial structures. While this model was designed to decentralize power and promote development, Mbadi argues that maintaining these layers of government is unsustainable.

“We have to re-look into devolution,” he urged. “We shouldn’t cut any further funds we allocate to counties; otherwise, we will kill devolution. We owe it to future generations to protect devolution at any cost.”

Mbadi proposed merging several counties into larger regional entities to reduce administrative costs and enhance service delivery. “If we could have a system where we have regional governments and then now devolve resources,” he suggested, advocating for a balance between the spirit of devolution and financial pragmatism.

However, some leaders argue for more counties, claiming marginalization under the current arrangement. Mbadi’s stance challenges this view, pushing for a sustainable approach that addresses financial burdens while retaining devolution’s benefits.

In addition to his views on devolution, Mbadi pledged to spearhead reforms at the Kenya Revenue Authority (KRA) to widen the national revenue base. Responding to Deputy Speaker Gladys Boss on addressing Kenya’s rising debt and revenue shortfalls, Mbadi emphasized debt accountability and the need for transparency.

“It is true that public debt levels in this country are worrying. It could be true up to 72 percent, but I believe it’s still at 67.68 percent of our GDP, which is very high,” Mbadi noted. “The number one priority for me is debt accountability.”

Mbadi criticized the lack of transparency in debt details, advocating for an annual publication of the debt register. “It’s not the government that owes money to China or the World Bank or the IMF. It is the people of Kenya. You cannot owe people money without knowing how much it is,” he asserted.

He also highlighted the need for linking projects to loans, condemning borrowing for general support. “We cannot borrow loans for general support. What has happened has happened, but going forward, that is what we must do,” Mbadi emphasized.

Regarding revenue mobilization, Mbadi stressed the importance of targeting KRA and improving its systems. “KRA is like a cow, which we milk without feeding. We have a provision that two percent of our revenue should go towards building the capacity of our KRA, but we don’t do it,” he said. “The systems that KRA is using now need re-engineering; we are losing a lot of custom duties through smuggling and counterfeit products because we do not have a system that is foolproof.”

Mbadi highlighted the need for proper staff recruitment and training at KRA, pledging to meet with KRA management to discuss and implement reforms. “There was a time we could collect 18 percent in taxes of our GDP. Today we collect 14 percent. If we could just increase 14 percent to 18 percent, we would be adding about Sh600 billion to our revenue base,” he noted.

Mbadi’s nomination to the Treasury has also sparked discussions on his ability to handle high-stakes financial contracts and public-private partnerships (PPPs). He promised to seek the Attorney General’s advice before signing contract loans to ensure fairness in repayment terms and prevent controversies like the Arror and Kimwarer projects.

“If approved, I will have to get the opinion of the Attorney General,” he vowed, asserting the importance of PPPs for national development and alleviating pressure on the Treasury.

Mbadi emphasized his commitment to legality and transparency in handling Treasury roles. “If I am told to do what I should not do, I will not do it if it’s not provided in law because my duty number one is to protect and safeguard the constitution,” he stated.

He also promised to improve public communications at the Treasury and called for legislation on public participation to prevent issues like the Finance Bill 2024 debacle. “The animal had become bad in the eyes of the public. Reasoning was thrown out the window, and everybody believed it should be defeated due to poor communication,” Mbadi explained.

John Mbadi’s extensive experience in finance, leadership, and politics, combined with his firm stance on transparency and reform, marks a significant step towards addressing Kenya’s fiscal challenges and ensuring sustainable development.

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