Kenya campaign projects now in doubt as polls cost shoots to $500m

Sunday July 16 2017

Kenya's General Election is slated for August

Kenya's General Election is slated for August 8, 2017.  

By The EastAfrican
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Kenya is feeling the strain of funding possibly the second most expensive election in the world in the face of falling revenues, public sector wage pressures and emergency spending following prolonged drought.

So demanding are the competing needs that the Treasury says it will be forced to cut spending in critical sectors and divert resources from others, with infrastructure projects that the government is touting in its re-election bid the most likely to be sacrificed.

Treasury Principal Secretary Kamau Thugge said higher salary demands by nurses and lecturers who are on strike, security interventions in Somalia and preparation of the General Election posed a risk to public sector operations in the current financial year.

“General Election could create uncertainty that would weaken both foreign and local investor confidence and slow down projected growth of the economy. Increased fear of insecurity in various parts of the country calls for additional expenditure,” said Dr Thugge in a Pre-election Economic and Fiscal Report released last week.

The report shows that up to Ksh49.9 billion ($499 million) has been allocated for the election, with Ksh5.3 billion ($53 million) going to election-related security operations such as policing 23 counties that the intelligence service has identified as potential hotspots for election violence.

The bulk of the money — Ksh42.9 billion ($429 million) — will go to the Independent Electoral and Boundaries Commission (IEBC), with the rest being distributed to the judiciary, National Intelligence Service and the Registrar of Political Parties.

“The budgetary allocation for the 2017 general elections is Ksh49.9 billion ($499 million) and is composed of direct and indirect election related expenses. Direct election expenses has an allocation of Ksh33.3 billion ($333 million) while indirect expenses are allocated Ksh16.6 billion ($166 million),” reads the report.

Apex of spending

The allocations, at $25.4 for each of the registered 19.6 million voters, place the Kenya election at the apex of spending on elections in the world, behind only Papua New Guinea ($63), according to data collated from multiple sources.

In East Africa, Rwanda is expected to have the most cost effective election, with the electoral body expected to spend $6.9 million for the 6.8 million voters or $1.05 per voter on average. That will be an improvement over the $1.71 per voter spent in 2010.

In contrast, Kenya’s average cost for the August 8 polls reflects an increase of more than half on the 2013 elections and is a quarter more expensive than in 2007.
The cost of the election in Uganda last year was $4 per voter compared to $5.16 per voter in Tanzania in 2015.

Ghana’s election last year at $0.07 per voter, appears the least expensive in Africa according to the data we sampled, against a global benchmark of $5 per voter.

The high cost of elections in Kenya reflects the infrastructure challenges that complicate election logistics as well as procurement of election materials at dubious costs. The latter is the subject of a court case on how the tender for ballot papers was awarded. 

Some of the direct expenses include recruitment and training of election officials, registration of voters, inspection of registers, procurement of election material and their distribution.

IEBC takes Ksh9.6 billion ($96 million) of the indirect expenses which will be used to pay allowances for security personnel, communication and vehicle maintenance.

The State Department of Interior will receive Ksh3.8 billion ($38 million) against its request of Ksh8.2 billion ($82 million). The bulk of the request from the police department was for allowances, which had been allocated Ksh4 billion ($40 million) followed by food at Ksh1.6 billion ($16 million). The security docket had requested Ksh1.5 billion ($15 million) for miscellaneous costs and Ksh22.8 million ($228,000) for airtime.

Kenya Defence Forces has been given Ksh1.5 billion ($15 million) to ensure surveillance of the country’s borders, especially Lamu, Wajir and Mandera.

The judiciary received Ksh227 million ($2.27 million) for cases that may arise from the elections while Office of the President was allocated Ksh384 million ($3.84 million) for the assumption of power by the president-elect.

Intelligence agents have been allocated Ksh550 million ($5.5 million) to support security operations.

In 2013, the total cost of the election was Ksh26 billion ($260 million) indicating a near doubling of cost this year.

Elections cost drop... but not in Kenya

Nigeria, with nearly 70 million voters, spent $603 million in its 2015 elections, translating into $8.61 per voter. Two years ago, an opposition party claimed that president Goodluck Jonathan had spent $5 billion in his unsuccessful bid to retain the seat won by General Muhammadu Buhari.

A strategist of one political party in Kenya said it would take $50 million for a presidential candidate to run a successful campaign, mostly on logistics, media and mobilisation of voters.

Research indicates that cost of elections tends to drop with experience, but in Kenya, it has been rising. This year elections have attracted the highest number of candidates — 16,259 — vying for 1882 posts, which has seen lengthy ballot papers. Voters are expected to take longer in the election booths as they go through the long lists.

The IEBC now has 40,883 polling stations, up from 33,000 in 2013, which pushes up staffing costs. The commission had advertised 359,958 positions. The officials are on a minimum nine-day contract and a maximum of 30 days, depending on the role they play. They comprise 262,665 polling clerks, 91,032 presiding and deputy presiding officers, and 5,054 electoral trainers.

The polling clerks are paid $10 a day, making the least amount payable to them Ksh2.3 billion ($230 million).

The electoral agency was also looking for 580 ICT clerks, 337 logistics officers, and 290 deputy returning officers.

Sluggish economy

Because of the competing expenditure needs, the government has cast a shadow of doubt on its growth forecast of 5.5 per cent for the economy this year.

The economy grew by 5.8 per cent in 2016, compared with 5.7 per cent in 2015.

Dr Thugge said increased demand for higher wages by public servants, underperforming revenues, resultant effects of drought and flood that hit various parts of the country and the slowdown in the global economy due to the planned exit of the UK from the Euro and uncertainty of the policy position of the new US administration paints a grim picture of the economy.

He said government revenue collections have lagged behind target since the beginning of the 2016/2017 financial year.

Dampening factors

For the July 2016 to May 2017 period, the total revenue collections totalled Ksh1.25 trillion ($12.5 billion), against a target of Ksh1.33 trillion ($13.3 billion).

Several factors have combined to dampen Kenya’s economic growth prospect, including rising inflation, declining private sector credit, rising public debt, falling revenue collection, increased government spending, falling corporate earnings and layoffs.

In March, the gross public debt hit Ksh4.04 trillion ($40.4 billion), compared with Ksh3.26 trillion ($32.6 billion) in the same period last year.

Razia Khan, chief economist at Standard Chartered Bank, said, “Kenya’s elections are typically associated with slowing growth as investors turn more cautious on perceived political risk, and activity winds down. The effect is likely to be exacerbated this year by a regional drought that has driven headline inflation sharply higher.”

Central Bank’s Monetary Policy Committee will sit on July 17 to review the country’s macroeconomic trends and decide on an appropriate policy rate in view of the domestic and external shocks.

Analysts at Cytonn Investments expect the committee to retain the Central bank Rate (CBR) at 10 per cent for the fifth time in a row to support economic growth, which fell to 4.7 per cent in the first quarter of this year compared with 5.3 per cent in the same period last year.