John Mbadi, the chairman of the Orange Democratic Movement (ODM) and a nominated lawmaker who has been critical of the government’s aggressive push to tax Kenyans is primed to take over at the National Treasury.
Mr Mbadi, an accountant by profession, headlines the list of four ODM stalwarts nominated by President William Ruto to his second cabinet. He is proposed to replace Prof Njuguna Ndung’u who was among those dismissed by Dr Ruto two weeks ago amid youth-led protests against higher taxes and government profligacy, among other grievances.
Going by his criticism of Dr Ruto’s administration’s obsession to tax Kenyans more in a bid to raise revenue, Mr Mbadi, if approved by Parliament will be a man under focus on how he juggles the piling debt payments against a thinning fiscal space and underperforming revenues.
In October last year, Mr Mbadi lashed out at Dr Ruto’s administration on what he described as overtaxing Kenyans, saying this negated the effort to grow revenue.
“We agree that the debt level is unmanageable, but the mistake the government is making is to imagine it will collect more from Kenyans by increasing taxes. The moment you start attacking people’s salaries, they stop spending,” he said.
“To address this (stabilise the economy) the government should stimulate the economy and you cannot do this when you are shrinking the domestic demand,” he added.
Mr Mbadi takes over at a time when revenue collection is trailing spending, prompting increased borrowing which further exacerbates Kenya’s already dire debt situation.
Kenya Revenue Authority (KRA) for example, missed its revenue target by Sh276 billion to collect Sh2.22 trillion in the year ended June, a period when debt payments as a share of the tax collections were 73.8 percent.
Mr Mbadi will also be tasked with leading the government on how to live without the advantage of raising taxes following the shelving of the Finance Bill, 2024.
Dr Ruto’s move to drop the Finance Bill, 2024 in a bid to quell the youth-led protests, has already led to budget cuts of Sh177 billion and Sh169 billion in additional borrowing to bridge the gap.
Any move to introduce new taxes or increase existing ones is one that the current administration is not keen to try, going by the wave of ongoing anti-government street protests that started on June 20.
Kenyans will also be eager to see if Mr Mbadi lives true to his philosophy and introduces stimulus packages.
The late president Mwai Kibaki successfully used stimulus policies defined by, among others, lower interest rates and programmes like the Kazi kwa Vijana.
Mr Mbadi’s name alongside those of ODM deputy party leaders Wycliffe Oparanya and Hassan Joho and James Opiyo Wandayi (leader of the Minority Azimio Coalition in the National Assembly) have already been sent to Parliament for vetting.
Mr Oparanya has been nominated as the CS for the Ministry of Co-operatives, Micro, Small and Medium Enterprises while Mr Joho has been proposed for the Mining, Blue Economy and Maritime Affairs.
Mr Wandayi has been nominated to the docket of Energy and Petroleum to replace Davis Chirchir who has been moved to Roads and Transport.
