Lawmakers Prevent Senate from Looking into the National Debt

Parliamentarians have rejected Senate attempts to modify the Public Finance Management (National Assembly) (Amendment) Bill, 2023 in order to examine the nation’s national debt.

Senators have proposed amendments that would have required the Treasury CS to report to the House on the nation’s borrowing and debt situation.

The Senate would thereafter have had a similar opportunity to review the findings, and a committee would have presented a report and recommendations. The submissions would have been made concurrently at the National Assembly.

The Senate would also be granted the authority to debate the report and approve a resolution accepting it, with or without changes.

The National Assembly Majority Leader Kimani Ichung’wah rejected the modifications yesterday, claiming that they would interfere with the role of the lower House.

“The amendments to the Bill as proposed by the Senate would be detrimental, especially to our work as the National Assembly. This would curtail the function of the House in the consideration of the national government budgets when submitted. This is solely under the purview of the National Assembly,” he stated.

The National Assembly has exclusive authority under the 2010 Constitution to examine, analyze, alter, and suggest changes to national government spending.

According to MPs, including the Senate in the proceedings would delay the budget-making process and add to the bureaucracy involved in carrying out the national government budget.

“The considerations of reports (on debt) by both Houses could lead to conflicting resolutions on national government borrowing without any available mechanisms for the resolution of such a disagreement,” Mr Ichung’wah added.

The National Assembly and the Senate are slated to resolve the impasse before the Bill is adopted once the modifications are rejected.

The Public Finance Management (Amendment) Bill, 2023’s main goal is to change the debt ceiling, which will now have a new debt anchor set at 55 percent of GDP in present value terms instead of its previous nominal upper limit of Sh10 trillion.

While the exchequer cabinet secretary is required to provide an explanation if debt levels rise above the debt anchor, the Treasury is obliged to adhere to the ceiling while borrowing.

The Treasury projects that Kenya’s gross debt will reach Sh10.1 trillion by June of the following year. This will make it difficult for the exchequer to finance its fiscal deficit for the fiscal year 2023–2024 because the present Sh10 trillion debt ceiling would be exceeded.