When I met National Treasury Cabinet Secretary Ukur Yatani last week, the first thing I wanted to gauge from him was a sense of deep domain knowledge of the subject matter — some indication on his appreciation and preparedness to deal with the most pressing challenges the running of this key nerve centre of economic policy-making faces.
The minister for finance is the country’s chief economist. So, I wanted to engage him on the vexed issue of the unsustainable public debt situation, unmet revenue targets, on the budget and on the fiscal consolidation programme — in general.
The minister is also the country’s CFO. So, I wanted to hear his views on reform of the government’s securities market, how he wanted to steward reform of accounting systems to achieve the transition from the antiquated cash-based system to the modern and more transparent accrual-based one.
I wanted to hear his plans for addressing challenges around the efficacy of the Integrated Financial Management Information System (Ifmis) and how he planned to address the pending bills conundrum.
The minister for finance, on behalf of the State, is a shareholder of all commercial State corporations. He owns all public assets on behalf of the State. I wanted to engage him on what I consider to be one of the most critical issues in the State corporations sector; namely, the looming insolvency of the monopoly utility Kenya Power.
I wanted to focus on Kenya Power because of what I see in South Africa. Five years ago, the government there ignored warnings about the dire financial situation of their power utility Eskom. Today, South Africans are experiencing rolling blackouts.
I wanted to hear Mr Yatani’s views on how and when the government, the majority shareholder of the listed entity, plans to rid the utility of the billions of on-lent or State-guaranteed loans that are a millstone on its neck and on its balance sheet.
What strikes you when you debate with Mr Yatani is his wide knowledge of the subject matter. Yet he is not those ministers who thrive on mouthing platitudes and projecting themselves as having answers to every problem.
What you get is a man who has sharply defined and carefully limited in the things he wants to achieve in the short term. For example, he is passionate about resolving the pending bills problem. He has set for himself a target of eliminating the issue within the current financial year.
During our conversation, he makes the argument that, since the government is the biggest buyer, the weight and negative effect of the pending bills has spread through the length and breadth of the economy. Inordinate delays in payments to contractors, he opines, had caused a build-up in non-performing loans in the books of commercial banks.
Another area where he wants to make an impact in the short term is management of the public debt. He says the continued proliferation of expensive commercial loans that sit on the nation’s external register must stop.
Another issue is credibility of economic forecasts and projections. For the first time in many years, Mr Yatani managed to put out a budget policy statement that does not provide for an incremental increase in the government’s spending plans for the next financial year.
A team player, perhaps his strongest point has been the ability to easily mobilise the support of key managers at the Treasury to support the reform process he is implementing there. It is a major point of departure at the Treasury building because Mr Yatani’s immediate predecessors — former CS Henry Rotich and former principal secretary Kamau Thugge — left behind a regime dominated by fiefdoms. He wants to dismantle those and restore clear lines of command.
Indeed, the biggest problem at the Treasury is not a dearth of professional competence. You have many qualified people working there. A great deal can be achieved by merely placing the skilled ones in the right places and increasing their freedom to question and redesign policy.
Will Mr Yatani make an impact in the big post in the short term? My impression was that the minster has approached the assignment with fire in his belly and has the attitude and mind to deliver.
This is an economy that has been registering slow growth for a long time and the situation cannot be turned around with a quick fix.
Mr Yatani and company must keep working to make sure that this critical nerve centre of the economy remains an efficient body where the workplace bubbles with new ideas and economists and public finance staffers work in an environment where entrenched practices are constantly questioned and alternatives explored.