Treasury Faulted Over The Rise in Debt Ceiling

By Jacktone Lawi

The United Green Movement (UGM) is now asking the Members of Parliament to revoke the  constitutional provision that raised the Debt Ceiling to Ksh9 trillion citing un accountability of the funds.

UGM party through its founder Augustino Neto says that  Parliament should begin  the  enactment  of  a legislation as anticipated by Article 211of the Constitution, to guide Public Debt issues, and not leave it to the whims of the Cabinet Secretary of Treasury or the Regulations of any other Law.

“After a scrutiny of the Public Finance Management Regulations of 2019, that set the Public debt at Kshs9 trillion, the Party would like to request the National Assembly to use its powers under the Statutory Instruments Act to revoke the said regulations,” said Neto

Data from the exchequer and CBK shows the stock of public debt stood at Ksh.7.7 trillion at the end of June this year to include Ksh.3.7 trillion in domestic debt and Ksh.4 trillion in external debt.

The government has in the recent past denied reports that its debt has reached distress levels.

According to Neto the relevant Committee of Parliament should audit all the Public Debt that has been incurred over the past years, using the Constitutional test of authorization and other Public International law standards, and declares which debts incurred were valid, and which ones are odious.

While faulting the debt ceiling increase he maintained that the move was based on the wrong section of the law, fraudulently conceived since public debt cannot be treated as something miscellaneous.

“Such an important aspect of Kenya’s Public Finance that it cannot be a miscellaneous issue, and even if that were so, there is a specific provision in the said Act that directs how a regulation on Public Debt should be made. Second, the Committee of Parliament went against the advice of the Parliament Budget Office, which advised that increasing the Debt Ceiling to Kshs 9 trillion would amount to fiscal indiscipline,” he added

However, The Statutory Instruments Act, states that a regulation shall be made pursuant to a Section of the enabling legislation.

“In this case, the Section of the Public Finance Management Act that would enable the Cabinet Secretary of Treasury to make a regulation that sets the Public Debt limit, if at all, is Section 15(4) of the Public Finance Management Act,2012. The said section reads in part; ‘The National Treasury shall ensure that the level of National Debt does not exceed the level specified annually in the medium term national government debt management strategy submitted to Parliament’. If that correct clause of the law was used, it would not have been possible to increase the debt ceiling to Kshs 9 trillion, because it would have offended the provisions of the annual Medium Term Plan.”

The Cabinet secretary instead allegedly made the regulation pursuant to Section 205 of the Public Finance Management Act, which is the provision that deals with the making of regulations for miscellaneous issues.

Leave a Reply

Your email address will not be published. Required fields are marked *


Enjoy this blog? Please spread the word :)