Bill sets stage for House to have say on public borrowing

The National Assembly will have the final say on the procurement of any loans by the Executive if it passes the Public Finance Management Act (Amendment) bill.

The proposal by Alego Usonga MP Samuel Atandi, seeks to provide stringent measures to control the government’s appetite for borrowing that has risen to Sh5.4 trillion by June this year according to the annual national debt management report by the National Treasury as at June 30, 2017.

The report was tabled in the National Assembly by leader of majority Aden Duale two weeks ago and Wednesday, Mr Atandi, a first term MP, also sought to have commercial loans like Eurobond brought under the influence of lawmakers.

“This bill seeks to mitigate the risk of uncontrolled borrowing. The government can explore increased use of long-term domestic debt instruments but ensure that it does not crowd the domestic market and reduce access to credit by private sector players because of high interest rates," Mr Atandi says.

Currently, parliament has no role in debt procurement as well as its management as it is only tasked to putting ceiling on how much the government should borrow compared to its Gross Domestic Product (GDP).

The Jubilee administration has ramped up spending since 2013 to build much-needed new roads, a railway, bridges and electricity plants, driving up borrowing to plug the budget deficit.

The increased debt has seen Kenya commit more than half of taxes to paying loans, leaving little cash for building roads, affordable housing and revamping of the ailing health sector.

Public debt stood at Sh5.04 trillion in June 2018, up from Sh4.41 trillion a year earlier, Sh3.62 trillion in June 2016, Sh2.83 trillion in 2015, Sh2.37 trillion in 2014 and Sh1.89 trillion in 2013.

President Uhuru Kenyatta will accumulate nearly Sh2.13 trillion more in public debt by the time his final term ends in August 2022, Treasury projections show, signalling increased pressure on taxpayers’ funds.

Treasury chiefs project that total debt will jump to nearly Sh7.17 trillion in the year ending June 2022.