Former Public Service Cabinet Secretary (CS) Moses Kuria has outlined the challenges that CS John Mbadi will face at the National Treasury.
Speaking in an interview on Monday, Kuria praised Mbadi, stating that he has the knowledge, experience, and potential to take over from Prof. Njuguna Ndung’u and effectively manage the Treasury.
However, Kuria explained that Mbadi will confront four major tests, with the most significant one being about government’s expenditure.
Kuria argued that the new CS will need to take drastic steps to address the issue of expenditure, especially following the collapse of the 2023 and 2024 Finance Bills.
“He must really wield the knife and cut government expenditure. He must conduct a microscopic review with boldness. He’s very stubborn, so if he decides to do the right thing, he’ll do it, and that is the right thing,” Kuria said.
In his submission, Kuria stated that Mbadi must face all accounting officers, ministries, and departments and instruct them to cut unnecessary spending.
According to the former CS, Mbadi might overcome this challenge more effectively because he comes from outside the rank and file, meaning he doesn’t carry the same political baggage as some of his colleagues from the Kenya Kwanza side.
Kuria Calls for Transformation in KRA
Additionally, Kuria said that the CS must transform the operations at the Kenya Revenue Authority (KRA) to ensure it meets its targets.
He explained that KRA has consistently missed its targets for the past three years hence necessitating drastic measures to turn around the trend in the National Treasury.
“If you don’t raise revenue, and I’m not saying adding taxes, we are in a situation where maybe it’s going to be fortunate not to add taxes, but even within the current tax framework, much more needs to be done to reform KRA,” Kuria said.
Kuria emphasized that Mbadi must place KRA reform at the top of his agenda, including bringing more people into the tax bracket to relieve the burden on those who are already paying taxes.
“I’m expecting him to prioritize the issue of automation at KRA so that we can reduce tax evasion,” he added.
Kuria stated that the Treasury could raise up to Ksh5 trillion in revenue without adding taxes if Mbadi works diligently.
Also Read: Mbadi Reveals Finance Bill Proposal Treasury Will Implement
Lure Development Partners & Pay Debts
Furthermore, Kuria argued that Mbadi must strengthen the relationship between Kenya and its development partners and financial markets.
He explained that Mbadi must handle the maturing debts taken by previous regimes with transformation and boldness.
Kuria also noted that the International Monetary Fund’s (IMF) decision to postpone the review of Kenya’s revised fiscal repair plan might affect government operations.
“I know the IMF has postponed the review that was supposed to approve the Kenyan package by the end of July; they’ve now said the end of August. If it gets postponed again, Mbadi is going to lose some leverage,” he said.
“If the IMF does not come through by the end of this month, in another 19 days, the shilling might hit 170 to the dollar. On Sunday, when I go to church, I will say a prayer for John Mbadi, hoping that the IMF stays engaged.”
Also Read: Former Treasury CS Reveals Two Key Factors Behind High Taxes & Rising Cost of Living
Mbadi’s Next Test
Kuria said Mbadi’s second litmus test will come in another year when additional loans mature. He advised the Treasury CS to apply his experience and publish a spreadsheet of maturing loans and their timelines.
“The debt commission, which some people have criticized, is very important, and Mbadi needs to put his energy there so that we are all able to see what’s happening,” Kuria said.
He gave an example of the government paying off the Eurobond loan, which stabilized the shilling from 160 to 120.
Kuria maintained that Mbadi needs the goodwill of President William Ruto to succeed since there are tasks only the head of state can perform.
Follow our WhatsApp Channel for real-time news updates!
https://whatsapp.com/channel/0029VaB3k54HltYFiQ1f2i2
