Kenya will establish a semi-autonomous agency to manage public debt if a Bill before Parliament becomes law.
The Bill sponsored by Nambale MP Sakwa Bunyasi seeks to establish the Public Debt Management Authority as an independent agency to manage Kenya’s loans.
Currently, the public debt is run as one of the directorates under the National Treasury, and is headed by a director general who reports to the Treasury principal secretary.
“The country’s debt is rising at an alarming level and there is need to manage the same to protect the current and future generations,” the Public Debt Management Authority Bill, 2020 states. If it is passed, the new agency will monitor and evaluate public debt-related transactions to ensure that they fall within the official guidelines and risk parameters.
It will also maintain a register of all loans guaranteed by or advanced to the national government (and its entities).
It is the officials of the agency that will be negotiating with creditors and advising the Cabinet Secretary on borrowing.
In addition, the authority will also be tasked with compiling, verifying and reporting on all national government domestic debt arrears and designing a strategy for settlement.
Preparing, updating a rolling annual and medium term public debt management strategy including a public debt sustainability analysis will also fall under this office.
Kenya’s public debt is expected to close the financial year at Sh6.4 trillion or 55 percent of GDP.
The agency’s board will comprise of a chairperson appointed by the President, the Treasury CS, Attorney-General, Central Bank governor and the Nairobi Securities Exchange CEO.
Other members are Kippra chief executive and one person each from the Institute of Certified Public Accountants, Kenya Bankers Association and the Law Society of Kenya.