Budget estimates carry economic lies

I ask, when we count informal sector workers, who do we include and who do we leave out: the street hawker who spends his day along Uhuru Highway selling fake and counterfeited mobile phone accessories,; the able-bodied man who spends the day on the streets of Nairobi selling sweets and ground nuts to motorists or the man who sits in the sun the whole day in Gikomba market reeking a living from making akala shoes made from discarded tyres?

The truth is that a job in the informal sector in Kenya is a phenomenon policymakers should neither celebrate nor highlight, as an important achievement in national statistics. This is a sector where labour resorts to when the alternative is worklessness and abject poverty...The basic gauge of a society’s success and worth is its ability to provide its members with adequate standards of living.

The way unemployment is treated in policy documents by today’s policy elite does not stop just at fiddling with statistics. They also engage in spreading misleading arguments about who and what to blame for the unemployment problem.

When we celebrate job growth in the informal sector, its a tactic to absolve the political elite from responsibility of failure to create decent jobs to the youth.

Then there is the patronising assumption where it is suggested that the unemployed should blame themselves for joblessness and that the main problem is lack of skills and the paucity of relevant training of the youth.

Thousands of graduates from teacher training schools remain on the streets despite the fact that the statistics on pupil-teacher ratios remain bleak.

Thousands of graduates from medical training schools remain unemployed today, despite the fact that rural health facilities continue to grapple with crippling shortages of nurses. Hundreds of doctors on medical internship tarmac for months on end even in the face of damning doctor- to population ratios in the country.

In official statistics, the truth about causes and consequences of unemployment remain buried beneath a blanket of lies; damn lies and statistics. We refuse to accept that mass unemployment has also become a permanent feature of our lives.

The gravity of the unemployment we are witnessing today is not caused by the lack of skilled workers.

We are in an economy where all you see is a declining trajectory for business investment, an economy held back by decades of flagging corporate profitability, near collapse of the exporting sectors- and where a rising proportion of the population are employed in the informal sector in low value and relatively insecure jobs?

This has been an economy that has suffered stagnant growth for more than two decades. The unemployment problem is as a result of a protracted slump in the material economy.

We have experimented with everything from the International Monetary Fund's (IMF) crisis management tool book but to no avail.

Keynesianism, monetarism, demand- side policies, supply- side policies, interventionism and deregulation have not gotten us out of decades of sluggish and anaemic growth.

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Which brings me to the quality of statistical information on the budget and on government finances in general.

When we write our budgets, we start by making exaggerated predictions and projections on growth. That leads us to exaggerated forecasts on revenues, unachievable budget deficit target and phantom spending targets.

When you want accurate and reliable statistics on the budget, your starting point should be the budget out turn numbers that are published in the Kenya Gazette by the government every month.

These are National Treasury’s own figures own actual budget out- turns that provide hard data on actual exchequer releases for the financial year.

From looking and studying the trends, you can make your own assessment on whether the projections they have given for revenue receipts in the new budget they have made are achievable or not.

Apart from actual numbers on exchequer issues, you will be able to assess whether the targets and projections on borrowing and debt service are achievable.

Me thinks that in reporting the budget, we-in the business and economic press- tend to give underserved significance to the big budgetary allocation numbers contained in the so-called budget estimates.

The truth of the matter is that the estimates tell you very little about the state of government finances. In recent times, there have been instances where the government implemented four supplementary budgets within one financial year.

The writer is a former Managing Editor for The EastAfrican