Kenya Kwanza vows to reject government attempt to increase public debts
Kenya Kwanza alliance principals at Kathwana stadium where senator Kindiki was absorbed into the alliance, shelving his gubernatorial bid
By Rugendo Antony
Worth Noting:
- Mudavadi was speaking on Monday during a press briefing attended by Deputy President William Ruto, FORD Kenya’s Moses Wetangula, Meru Senator Mithika Linturi, Tharaka Nithi Senator Kithure Kindiki, various MPs and MCAs among other leaders.
- Lambasting President Uhuru Kenyatta and Raila Odinga handshake, Mudavadi argued that the debt commitment stood at Sh 4.5 trillion before the handshake but ballooned to Sh11.7 trillion after the handshake.
- The Kenya Kwanza principal argued that Uhuru’s government has borrowed beyond its ability to repay and further debt would be a burden to ordinary Kenyans.
Kenya Kwanza alliance principals led by Musalia Mudavadi have cautioned the government against subjecting the country to more debt in the 2022-2023 budget.
Mudavadi urged members of parliament and senators to reject any request for approval of a new debt ceiling.
Speaking during a press briefing at Meru town on Monday the ANC leader accused the Treasury Cabinet Secretary Ukur Yattani of violating the constitution by failing to seek parliament approval before exceeding the set debt ceiling.
“The CS for the National Treasury should not sign any new loans including floating sovereign bonds during this transition. The National Assembly and the Senate should reduce the budget ceiling to ensure a fiscal deficit that does not exceed Sh 400billion and check on the growing public debt,” Mudavadi said.
Mudavadi was speaking on Monday during a press briefing attended by Deputy President William Ruto, FORD Kenya’s Moses Wetangula, Meru Senator Mithika Linturi, Tharaka Nithi Senator Kithure Kindiki, various MPs and MCAs among other leaders.
Lambasting President Uhuru Kenyatta and Raila Odinga handshake, Mudavadi argued that the debt commitment stood at Sh 4.5 trillion before the handshake but ballooned to Sh11.7 trillion after the handshake.
The Kenya Kwanza principal argued that Uhuru’s government has borrowed beyond its ability to repay and further debt would be a burden to ordinary Kenyans.
Heightened debt accumulation has occurred since March 2020 when the first case of COVID-19 pandemic was reported in Kenya. Public debt stock increased from Sh 6.28 trillion in March 2020 to Sh 7.34 trillion in March 2021.
The legal basis of Kenya’s debt ceiling is stipulated in Section 50(5) of the PFM Act 2012 which states that ‘Parliament shall provide for thresholds for the borrowing entitlements of the national government and county governments and their entities’. In 2019, Parliament set the debt ceiling at Sh 9 trillion and, according to Legal Notice No. 34 of 2015, this ceiling should be reviewed annually. As such, government borrowing cannot exceed the set ceiling in a year.
Last year the Treasury CS Yattani told the International Monetary Fund (IMF) that Kenya aims to replace a nominal public debt ceiling with a debt anchor as a percentage of Gross Domestic Product (GDP) by the end of June 2022.
Additionally, Mudavadi affirmed support to a proposal by MPs allied to Kenya Kwanza to increase the equitable share to counties to Sh 495 billion in the financial year 2022/2023. He noted that this represents 35 percent of the audited and approved nationally raised revenue figure of Sh 1,413,694,842,235 as adopted by this House in the audit report for the financial year 2017/2018.
“The BBI Bill 2020 (Which was resoundingly rejected by the Courts) proposed amendment of Article 203(2) of the Constitution to increase the equitable share raised nationally allocated to county government from fifteen (15percent to 35percent. We do not need a constitutional amendment to give more money to counties. The law allows Parliament to pass a resolution to adopt the BPS with or without amendments. This amendment deserves the goodwill and unwavering support of all Members of the National Assembly, Page 3 of 5 Governors, and the MCAs to ensure devolution works in line with the Constitutional mandate of counties,” Mudavadi added.
He also called on Cabinet Secretary for National Treasury to obey the Constitution and entitle the Inspector-General as an Accounting Officer for the National Police Service. According to Mudavadi this will provide financial autonomy and assure the Country of independent and effective policing services, especially the office of the DCI and in the fight against corruption.
The Kenya Kwanza principal added that they are in support of MPs proposal for the provision of a Sh 50 billion Fund for the establishment of an affordable Credit scheme to support small businesses (MSMEs.
Mudavadi also noted that MPs allied to them have proposed amendments to provide an additional Sh 12billion for the operationalization of the Judiciary Fund.
The Kenya Kwanza MPS have also proposed an amendment for the provision of an additional Sh 2billion required for drought mitigation including livestock-off take program.
In addition Mudavadi said teachers require adequate preparation for the changing CBC.
He called on the government to allocate adequate resources to cater to the Teachers Professional Development (TPD) program.
“Our Members have proposed an allocation of Sh1.8billion in the FY 2022/2023 to cater for the TPD Program. Further, our Members have proposed doubling the allocation for funding to the HELB to ensure seamless processing of loans to University and TVET students who are presently suffering due to lack of funds at HELB for disbursement,” Mudavadi said.
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