Economy
MPs block Senate from scrutinising national debt
Friday September 15 2023
National Assembly Majority Leader Kimani Ichungwah at a past event on September 1, 2023. PHOTO | BONFACE BOGITA | NMG
Members of Parliament have turned down attempts by the Senate to scrutinise the country’s national debt through amendments to the Public Finance Management (National Assembly) (Amendment) Bill, 2023.
Senators had moved amendments that would have seen the House receive reports on the debt status and borrowing by the national government from the Treasury CS.
The submissions would have been made concurrently at the National Assembly with the Senate thereafter having a similar opportunity to scrutinise the report and a committee table a report and recommendations.
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Moreover, the Senate would earn the right to discuss the report and pass a resolution adopting it, with or without amendments.
While rejecting the amendments yesterday, National Assembly Majority Leader Kimani Ichung’wah said the proposals are an encroachment to the role of the lower House.
“The amendments to the Bill as proposed by the Senate would be detrimental, especially to our work as the National Assembly. This would curtail the function of the House in the consideration of the national government budgets when submitted. This is solely under the purview of the National Assembly,” he stated.
The 2010 Constitution gives sole powers to the National Assembly to scrutinise, review, amend, and make recommendations on national government spending.
MPs state the inclusion of the Senate in the activities would interfere with the timelines of the budget-making while adding a layer of bureaucracy to the implementation of the national government budget.
“The considerations of reports (on debt) by both Houses could lead to conflicting resolutions on national government borrowing without any available mechanisms for the resolution of such a disagreement,” Mr Ichung’wah added.
Following the rejection of the amendments, the National Assembly and the Senate are set to resolve the standoff before the adoption of the Bill.
The primary objective of the Public Finance Management (Amendment) Bill, 2023, is to change the debt ceiling, moving it from a nominal upper limit of Sh10 trillion to a new debt anchor set at 55 percent of GDP in present value terms.
The Treasury is expected to abide by the ceiling during its borrowing while the exchequer Cabinet Secretary is obligated to explain when debt levels stick above the debt anchor.
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According to estimates from the Treasury, Kenya’s gross debt is estimated to hit Sh10.1 trillion by June next year. This means that the current Sh10 trillion debt ceiling would be breached resulting in difficulties for the exchequer in financing its fiscal deficit for the 2023/24 fiscal year.
