MPs summon Rotich to shed light on biting State cash crunch

The National Assembly’s Budget and Appropriations Committee has issued summons to Treasury secretary Henry Rotich to appear before it Thursday to explain the cash crunch that has stalled spending on essential items.

The committee led by Mbeere South MP Mutava Musyimi took the decision after Treasury principal secretary Kamau Thugge failed to appear before the team on Tuesday.

The committee had last week adjourned its investigation into the financial crisis after Mr Rotich and Dr Thugge snubbed invitations. Mr Rotich is out of the country and was expected to jet back Tuesday evening from Peru.

“It is unfortunate that the PS, who was to appear before us, has failed yet again. I have information that Mr Rotich is out of the country and is expected back today (Tuesday). We have no option other than to summon them to appear on Thursday without fail,” Mr Musyimi said.

The committee said it is important for the minister to appear in person “because the cash crunch is too big for the PS.” If the minister fails to appear before MPs, he risks being cited for contempt of Parliament. The committee can then ask the Director of Public Prosecutions to commence the process of charging the minister.

The Constitution under Article 125 gives Parliament and any of its committees power similar to that of the High Court.

“Committees have power to enforce the attendance of witnesses and examine them on oath, affirmation or otherwise and to compel the production of documents,” the Constitution states.

The cash crunch has stalled payment of essential services like rural electrification and free primary education, a crisis that has been blamed on low revenue collection and high borrowing costs.

READ: Low revenues, high interest rates behind State cash crunch

Not a single cent has been released to kick-start development projects in Internal Security, Science and Technology dockets as well as job-creating industries like fisheries, tourism and mining.

Eight independent commissions including the Parliamentary Service Commission, the Teachers Service Commission and the Ethics and Anti-Corruption Commission – which had planned to acquire a new office block – have also been affected.

High debt payments, low revenue collection and expensive interest rates have been cited as reasons the Treasury has no money by the Parliamentary Budget Office (BPO).

At Sh132.6 billion, the debt payment in the three months to September is more than the Sh117 billion recurrent spending and nearly six times the Sh24.5 billion spent on projects in the quarter to September.

Project spending is critical in creating infrastructure and putting money in private hands through demand for raw materials that ultimately create new jobs.

The Kenya Revenue Authority collected Sh181.2 billion in the first two months of the current financial year, which was below the expected average for the period, the PBO said.

Domestic borrowing is also below target because of high interest rates.

This has made the government refrain from borrowing more money from the market, with these factors explaining the cash crunch it is currently facing.