The proposal by Kikuyu MP Kimani Ichung’wa to restrict ministries, departments and agencies or commissions (MDAs) to depositing their cash only in State-controlled banks cannot go without being challenged. It is certainly not an idea that should be supported in a liberalised economy.
Mr Ichung’a’s point is that the cash intended for use by MDAs will be better monitored if it is in State-controlled banks.
Commercial banks operating in Kenya are known to keep a trail of cash transactions for each customer and the Central Bank of Kenya (CBK) is on hand to intervene should any of such institutions attempt to do otherwise.
The MP says that such a move would kill corruption relating to state funds. On the contrary such a move would encourage corruption because some State banks are the only ones that the CBK has been powerless to discipline.
Perhaps what the MP should be asking for is a better monitoring of the MDAs transactions and regular reporting on this.
The Office of the Controller of Budget does not appear fully capable of doing that as it reports on what has happened.
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Note: The results are not exact but very close to the actual.
