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I think the media overlooked the most significant aspects of President Uhuru Kenyatta's no-new plans last week.
For the first time, the president highlighted the memoranda of understanding contracts – the two vehicles that cabinet secretaries, parastatal chiefs, and senior secretaries used to introduce past-motivated projects in the past. government spending plans.
What I found most significant in President Kenyatta's remarks are as follows: and I paraphrase: Do not tell us that you signed a memorandum of understanding with a contractor or a commercial contract with a foreign party and, therefore, you have to embark on a new project.
The President should not have stopped against these shady MoUs and dubious trade contracts. It should force all ministries, government departments and parastatals to publish all MoUs and commercial contracts they have signed recently – especially with Chinese entrepreneurs.
Indeed, the President has entered the space where large capitals are made today. This is the arena where one of the most viciously fought political struggles is taking place – namely; fighting for the opportunity to negotiate negotiated projects through memoranda of understanding and commercial contracts with Chinese entrepreneurs.
Segments of the political elite come together to seize the opportunity to negotiate major projects. Being a broker or political link for these MoU agreements can be extremely lucrative.
Putting the issue in the context of the President's remarks and appreciating how mdA and opaque commercial contracts introduce projects into government spending plans through the back door, you must understand the phenomenon known as "loans negotiated by the entrepreneur ".
How is the game played exactly? A foreign entrepreneur, with his allies and local agents, addresses a CS or a parastatal leader with a proposal to implement a project for him and a promise to arrange funding for the new project. A memorandum of understanding is signed in a hurry between the contractor and the head of the parapublic or interim company.
Next, a commercial contract is signed by the department or parapublic and the contractor. The National Treasury is only invited at the very end of the transaction to sign financing agreements with Exim Bank of China. In this way, a new project funded by the Chinese will be entered in the budget
. This is the point that President Kenyatta pointed out that parastatal leaders and CSs were too eager to initiate projects even when the older ones were stuck. Here is a recent example of such transactions
Recently, we woke up with the Kenya Electricity Company (Ketraco) which announced a 25 billion shillings commercial contract with China Electric Power Equipment and Technology Company for the electrification of the normal track railway. It was after his original department, Energy, had signed a memorandum of understanding with the contractor.
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