Economy

Treasury has 7 days to defend claims of unconstitutional budget

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Treasury Secretary Ukur Yatani holds up the briefcase containing the Budget for the 2021/22 financial year outside the National Treasury on June 10, 2021. PHOTO | JEFF ANGOTE | NMG

The High Court has directed the National Treasury to respond to a petition filed by two rights activists seeking to have the 2021/2022 National Budget quashed and declared unconstitutional.

Justice James Makau on Wednesday directed the Treasury, Attorney-General and Parliament to file their respective responses within seven days so that the case can be settled for a hearing.

The judge fixed the case to be mentioned on June 29, 2021 before his colleague Justice Anthony Mrima for further directions or any orders.

The two activists, Okiya Omtatah and Wanjeri Nderi, want court to issue a temporary injunction prohibiting the implementation in any way of the National Budget that was read last week by Cabinet Secretary Ukur Yatani.

In the court papers, they are arguing that the budget is unlawful and unconstitutional because of exceeding the mandatory limit set by Parliament in the Budget Policy Statement by some Sh608.85 billion.

The ceiling had been set at Sh3.023 trillion, they say. They are also arguing that the national budget violates the requirement for the development component of the Budget which is supposed to be at least 30 per cent of the total.

In addition, they say, the budget violates the requirement that the deficit should not be more than the development component. They are arguing that the recommendations of Budget Policy Statement for 2021/2022 were supposed to form the basis for the finalization of the National Budget, pursuant to section 25(8) of the Public Finance Management Act, Public Finance Regulation 27(4), and Standing Order 232(10).

"Contrary to the above, the National Treasury & Planning Cabinet Secretary presented a Sh3.632 trillion budget to Parliament, deviating from the policy statement. The budget estimates that the Cabinet Secretary submitted to Parliament are illegal and unconstitutional," the two actvists state.

They say the National Treasury “has ousted Parliament” and the public in the budget making process. While emphasising that there should be openness and accountability including public participation in financial matters, the activists believe that by exceeding the cealing that had been set by Parliament the National Treasury acted beyond its powers.