By George Obulutsa
LIMURU, Kenya (Reuters) - Kenya will launch a devolved system of government next year to try to hasten rural development, but many fear the main result will be to spread the chronic corruption that plagues national politics to a local level.
Politicians are billing devolution as a radical reform designed to prevent a repeat of post-election violence in 2007/8 in which more than 1,200 people were killed after a disputed presidential poll.
Under the reform, the country's new constitution calls for 47 regional counties to be created with the aim of taking more decisions at a local level and of tackling corruption, unemployment and the broken education system which is dragging down east Africa's biggest economy.
The new county governments are due to start work immediately after elections in March 2013, and each one will be allocated funds from the national budget to pay for projects to improve the lives of local people across the country of 40 million people.
However, many doubt the new system will bring about change.
"Right now, there are those embezzling, stealing money. If these ones get back into county government, then it will make no difference," Schuaga Mugeche, 39, said at a car repair shop in the hilly town of Limuru, near the capital Nairobi.
Mugeche said he feared devolution would simply increase the opportunities for officials to misuse public funds.
"The problem is corruption. You elect someone, and before long he has a big stomach," said vegetable vendor Mama Wambui.
The government has made great strides in some respects, connecting most residents in places like Limuru and other far-flung rural areas to the electric grid, providing running water and free primary education, and building hundreds of homes.
But President Mwai Kibaki's government has been embroiled in several corruption scandals and some of his ministers have resigned only to be later cleared and reinstated.
While ordinary Kenyans are worried about graft, the government is concerned that development expenditure may be diverted to pay for the costly new county officials. Policymakers also fret that government borrowing could rise.
The cost of paying a new layer of officials comes at a time when Kenya is struggling to cover civil service wages after agreeing huge salary increases for teachers, doctors and the police.
Some counties have already angrily complained that their proposed budgets are too small and asked for more cash, raising tensions in the run-up to the polls.
The county budgets are calculated according to their respective economic potential and population sizes.
Despite the new expenditure, Finance Minister Robinson Njeru Githae has said he plans to make sure borrowing does not rise above 50 percent of the country's gross domestic product of $33.6 billion, close to the government's current borrowing levels.
The Treasury has put the cost of setting up a devolved government at 260 billion shillings or 18 percent of the current national budget. Those funds are needed to pay for 350 lawmakers, up from 222 previously, 68 new senators and 47 governors and their staff.
Kenyan MPs are already among the best paid in the world, drawing about $13,000 a month, most of that in tax-free allowances, a huge figure in a country where an unskilled urban laborer can earn as little as $60 a month.
Although Kenya's national budget has been self-funded since 2005, much of it has been raised through debt.
"We have a self-imposed limit (on borrowing). More than that and it becomes unsustainable," Githae told Reuters at a meeting to discuss the 2013/14 (July-June) budget.
(Additional reporting by Drazen Jorgic; Writing by James Macharia; Editing by Andrew Osborn)
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