Why Kenya needs a strong Treasury

Having enjoyed the benefit of a second chance to write a constitution that would be acceptable to a majority of Kenyans, the least that was expected of the Committee of Experts on Constitution Review was to produce a document with broader appeal than the original draft.

Whether the experts achieved this objective is still largely an issue that only the Kenyan public can judge; a verdict that will inevitably come in the planned constitutional referendum in March.

But there are loud voices of discontent coming from Treasury Building, the economic nerve centre of the country. Economic policy experts with combined decades of experience are up in arms over a proposal in the revised draft constitution to abolish Treasury, the co-ordinating office under the Ministry of Finance.

In Treasury’s place, the Committee of Experts (CoE) has proposed the creation of three executive offices: the Commission on Revenue Allocation, The Salaries and Remuneration Commission and the Controller of Budget’s office.

In their wisdom, the CoE remained silent on and actually dropped their initial plan to enshrine the office of Treasury in the constitution.

Back in November when the original constitution review draft was published, the intention to whittle down Treasury’s seemingly unfettered powers to formulate and implement the national economic policy was made clear through introduction of elaborate clauses that obligated the Finance minister to seek Parliament’s recommendations and approval when preparing the annual budget.

The reaction by Treasury officials then was to prepare a detailed case justifying the need for an executive ministry of finance.

By and large, actions and omissions of officials in this ministry determine whether the youth have enough job opportunities, the stability of prices of consumer goods, interest rates charged on individuals and business people and even the strength of the Kenyan currency, which has a direct effect on cost of imported goods such as oil.

In setting out the expenditure estimates in any financial year, Treasury has to be cognisant of the broad macro-economic environment within which the tax man is expected to collect targeted revenues.

It also has to factor in the Medium Term Expenditure Framework (MTEF) that sets the country’s economic course in the short term, as well as other national growth strategies such as the current development blueprint, the Vision 2030.

In other words, Treasury officials impressed upon the CoE that the office is not all about sharing and distribution of national resources, but it is also very much about creation of the very same resources.

Handing budget making and other functions traditionally associated with Treasury to appointees of Parliament would therefore be tantamount appropriating the executive authority of elected governments to a tiny group of MPs, majority of who do not ordinarily have any economic expertise.

What is more, the principle of separation of powers provides that Parliament’s chief role is to watch over the Executive and the Judiciary, and this it does by passing requisite laws to check any excesses by the two arms of government.

It is for this reason that this newspaper throws its full weight behind the creation of a strong Treasury with requisite legal backing free of Parliament’s manipulation, as it is only such an arrangement that can guarantee Kenyans the implementation of sound, consistent and predictable economic policies.

It is easy to see the CoE’s dilemma and main motivation behind their efforts to “clip” Treasury’s powers. Allegations have been that distribution of national resources has been noticeably skewed towards geographical areas that support the government of the day.