Wananchi Opinion: Kenya needs austerity measures, period

For starters, austerity measures are a set of economic policies, usually consisting of tax increases, spending cuts, or a combination of the two, used by governments to reduce budget deficits.

Austerity measures can in principle be used at any time when there is concern about government expenditures exceeding government revenues.

Over the years, Kenya has experienced economic growth, but it has also faced significant economic challenges that have affected the living standards of citizens.

These challenges are mainly attributed to various factors such as corruption, mismanagement of public funds, and bloated public sector wages and allowances.

To address this, we need as a country to put in place austerity measures to stimulate economic growth, reduce dependency on loans, and promote fiscal discipline in the public sector.

The first reason why Kenya needs to put in place austerity measures is to stimulate economic growth.

In recent years, Kenya's economic growth has been sluggish due to factors such as high inflation rates, high interest rates, and a large fiscal deficit.

These factors have caused the government to borrow heavily to finance its budget and investment projects, leading to a rise in the country's public debt.

To reverse this trend, the government must reduce wasteful spending, curb corruption and ensure prudent management of public funds.

By doing so, funds will be redirected to development projects such as infrastructure, which will create jobs, boost production, and drive economic growth.

Secondly, Kenya needs austerity measures to reduce its dependency on loans. The country has borrowed heavily from international lenders to finance its budget, infrastructure projects, and other development programs.

This heavy borrowing has led to an increase in the public debt, which has in turn, negatively affected the economy.

High debt levels have affected the country's credit ratings, leading to higher interest rates on outstanding loans, which in turn, increase the cost of borrowing.

By implementing austerity measures, the government will reduce its dependence on borrowing and look for other means of financing development projects such as public-private partnerships.

In addition, Kenya needs austerity measures in order to promote financial discipline in the public sector.

The government has been accused of wasteful spending on non-essential items such as travel and entertainment of public servants, leading to an increase in recurrent expenditure in the budget.

To address this, the government must eliminate unnecessary spending, reduce the public sector wage bill, and reduce the amount of money spent on allowances.

By doing so, the government will reduce recurrent expenditure in the budget and channel more funds towards development projects such as the expansion of electricity and water supply, which will directly benefit the citizens.

Lastly, our country needs to put in place austerity measures so as to promote fiscal responsibility. Fiscal responsibility is a crucial aspect of any government's development agenda.

Kenya's government must ensure that it strikes a balance between raising revenue, and investing in development projects that benefit the citizens.

This means the government must avoid budget deficits, revise the tax code to increase revenue collection, and reduce wasteful spending.

Only through fiscal discipline can the government's development agenda be realized, and the citizens' welfare be improved.

In conclusion, although the goal of austerity measures is to bring down government debt, the effectiveness thereof is still debatable.

Its opponents state that government programs are the only option to improve a reduced personal consumption seen during a recession.

They claim that a strong public sector spending fixes unemployment and, therefore, increases the number of income taxpayers.

On the other hand, supporters contend that huge deficits can adversely affect the broader economy and limit tax revenue. It therefore follows that implementing austerity measures is not a walk in the park.

In fact, implementing the measures will require political good will, the cooperation of all stakeholders, and leadership that is willing to make the tough choices necessary to see Kenya become an economic powerhouse and improve the living standards of its citizens.

Mr. Abol Kings is a financial coach, a teacher and a former banker