Amid Appeals for Aid, Kenya Says It is 'Not Broke'

19 March 2009

KenyaThe World Food Program has appealed for nearly $250 million to double food assistance in Kenya, in the face of drought and the global economic crisis. The appeal comes as the Kenyan government is grappling with a growing budget deficit.

The WFP is seeking $244 million to provide food assistance to 3.5 million people in Kenya.

The agency says that poor rains in the final months of 2008, and continued drought, have led to crop failures, particularly in the southeast and coastal regions. Corn output for the most recent season was 15 percent below average, and the price of grain has more than doubled in the past year in parts of the country.

Earlier this week the U.N. humanitarian agency announced it is increasing its emergency humanitarian appeal for Kenya to $575 million, in order to provide assistance to between 3.5 and 4.5 million people.

The financial crisis has reduced the amount of remittance money being sent back to the country from Kenyans living abroad in Europe and the United States, and Kenya's economy has still not recovered from the political and ethnic violence that followed presidential elections in December 2007.

Last week, the government cut its forecast for GDP growth from 5.8 percent to 3.6 percent. The finance ministry announced the budget deficit had grown to more than $300 million, and there would need to be cutbacks in government programs.

The news has prompted cries from some critics that the government has gone broke, but government spokesman Alfred Mutua tried to dispel that idea.

"The country is not broke," Mutua said. "We are facing economic hard times, but we are still able to have a budget, and able to sustain programs. How can a broke country put aside 15 billion shillings [$190 million] for the youth program that they just put out? How can a broke country continue with massive infrastructure development?"

Kenya has long prided itself on its independence from foreign aid, which generally amounts to between five and nine percent of the budget, and Mutua emphasized that Kenya wants to maintain that position.

"We also do not want to get into a situation of dependency. We really appreciate as a government the support we receive from our development partners. But we are not interested in getting to a place where the development partners start funding our budget or start funding our projects," Mutua said.

Nevertheless, Kenya's finance minister recently announced that the government is seeking foreign assistance equal to six percent of GDP to account for the widening deficit.

Several NGO leaders have criticized the large size of the cabinet and the high salaries paid to members of parliament for contributing to the current situation. The director of the Kenya Human Rights Commission, Muthoni Wanyeki, questions why the government has not turned to these areas when looking for budget cuts.

"I find it interesting that in the austerity measures announced by the government they chose to look at some areas of recurrent expenditure, but not areas that citizens as a whole have been demanding they look at: the cabinet, remuneration of parliament, etc," Wanyeki said.

Institute of Economic Affairs program officer Kwame Owino agrees the size of the cabinet, nearly 100 ministers or assistant ministers, is too large. But he says other factors have played a more important role.

"What concerns us, though, is the other expenditures regarding, say, the purchase of vehicles, and expensive vehicles for that matter, toward the public service," Owino said. "Secondly, expenditures ... that are completely wasteful, especially the ones in agriculture. The third one that is also very concerning to us is what was supposed to be a subsidy program in maize ended up as a gravy train for corrupt and unjust enrichment of politicians and their associates. "

Meanwhile, Kenya, like much of the world, is likely to continue to feel the impact of the financial crisis for some time to come. In one indication, the Kenyan shilling this week fell to a four-year low against the dollar.