Walking Nation

Everyone’s lips are fixated to the rising cost of living that we are experiencing in this country. A lot of this has to do with rising cost of petroleum products which have hit 3 digits from Kshs ninety something to over a hundred Kenya Shillings. To add insult to injury the country may be experiencing another drought. From where I sit the government has been requesting a report on the impact of drought on food prices.

However, what you don’t fail to notice while coming to work or going home is the sheer number of persons who are walking to and from work. So one has to ask has this country become Cuba or is it under an embago of sorts?

I was fortunate enough to attend a public forum organised by the Institute of Economic Affairs (IEA-Kenya) which centered on effects of petroleum pricing regulations in Kenya.

Members/ speakers presents were cross cutting along the value chain of petroleum products from middle boys of the industry i.e. Petroleum Institute of East Africa (PIEA), regulators i.e. Energy Regulatory Commission (ERC), independent petroleum suppliers and consumers/consumer organization i.e. the Consumer Federation of Kenya (COFEK).

MIA were the big industrial players (BP, NOC, etc) nevertheless, one was able to get a picture on how the industry operates. Perhaps of interest to every one present was how the ERC was going about its business of setting up prices of petroleum products.

One of the things to note is that ERC mandate to control prices came into force in December 15, 2010. However, since its mandate came into operation people presents were of the view that they have not experienced an adjustment of prices downwards. The ERC was of the opinion it is too early to start judging its performance.

During the Q&A session we wanted to know how pump prices were arrived at and from the pump prices in early December of Kshs 91. Here is the breakdown;

	Kshs	KShs	%
Landing Price Mombasa		49
Taxes		29.85	60%
Margins (Marketers)	6
(Retailers)	3
		9	11%
Transport		4	5%
Total		91.85

From the above you will notice the government gets a huge chunk in taxation. So the question is if the treasury would reduce the amount of taxation?

Well, the treasury according to ERC officials present pointed out that it would want to know where it can recover that amount from!

From my own perspective I tend to think that should this continue (Read: Drought, floods and food. An opinion piece from Paul Krugman) then come 2012 a lot of legislators are going home or anything in between is anyone’s guess!
Presentations:
Energy Regulation Commission Presentation: Examining the Rationale & Effects of Petroleum Pricing Regulation in Kenya (Part 1 and Part 2)

National Launch of Kenya’s OBI 2010 Results

The results of Open Budget Survey 2010 were released in Kenya by Institute of Economic Affairs (IEA) on November 9, 2010 at Stanley Hotel. This is under the Budget Information Programme (BIP) of the Institute.

The Institute is a civic forum that seeks to promote pluralism of ideas through open, active and informed debate on public policy issues. The release of this key index on public participation in budget making exercise and eventual outcomes was a follow up on an earlier public stakeholder forum in the year organised before the budget was read. This forum was meant to allow public input for the 2010/11 Kenya Budget. This input was collated by IEA and eventually forwarded to the treasury for consideration.  

Back to the release. The event was graced by the Muthoni Wanyeki the IEA's board chair who doubled up as the chief guest (the one launching the publication in Kenya). Noticeably absent were officials from  the treasury.

Muthoni in her opening remarks noted the positive correlation that exists between open budget processes and budget transparency and accountability.

Thereafter highlights of the survey was done by John Mutua of IEA. In his presentation he noted that the Survey is the ONLY independent, comparative, regular measure of budget transparency and accountability around the world. This survey is produced every 2 years by independent experts who administer questionnaires to various stakeholders on their participation in Budget making exercise. The experts also look at the information that the government makes public at little cost for the public to be aware on how their tax payers money is spent.

The Benchmarks of this process were also highlighted.

Thereafter, Muthoni had some talking points where she observed that with the enactment of new constitution. She is hopeful that the Government can be able to scale up in terms of ranking given the institutions that are enshrined in our new law.

To download this results visit open budget index website