There were ugly scenes in the House on Thursday as MPs raised the debt ceiling to Sh12 trillion to finance the government’s Sh3.33 trillion budget for the 2022/23 financial year.
Lawmakers allied to President Kenyatta and ODM leader Raila Odinga ganged up to bulldoze the vote that gives the government the green light to borrow beyond the Sh9 trillion debt cap.
This was, however, done with the caveat that the National Treasury proposes amendments to the Public Finance Management regulations to expand the ceiling to Sh12 trillion.
In its report on the 2022 Budget Policy Statement (BPS), the Budget and Appropriations Committee (BAC) had recommended that the proposed Sh2.075 trillion budget be slashed by Sh400 billion.
This was meant to reduce the Sh846 billion deficit contained in the BPS, but with a huge impact on the development budget, particularly President Kenyatta’s Big Four agenda.
The committee felt that adopting the BPS with the huge deficit was akin to violating the Sh9 trillion debt ceiling enacted in November 2018.
National Assembly Majority Leader Amos Kimunya, however, successfully convinced the House to alter the committee’s recommendations.
“The committee therefore urges the National Treasury to amend the debt ceiling to enable them implement the budget as proposed, rationalise expenditure or implement revenue enhancing measures,” reads Mr Kimunya’s proposal that was adopted by the House.
His amendments to the BAC report on the BPS means that the expenditure ceiling for the executive will be Sh2.005 trillion, of which the Office of the Auditor-General has been allocated Sh6.38 billion, Parliament Sh50.22 billion and the Judiciary Sh18.89 billion.
There were acrimonious scenes as MPs allied to President Kenyatta and Mr Odinga on one hand and those supporting Deputy President William Ruto, on the other, engaged in a shouting contest.
Those allied to the DP led by Aden Duale (Garissa Township) and Kimani Ichung’wah cried foul. “How does the National Assembly ask the National Treasury to amend a debt ceiling? That is the statutory work of Parliament under the PFM Act. It is absurd!” fumed Mr Duale.
Mr Ichung’wah questioned the manner in which Mr Kimunya’s amendment was introduced. “It was not on the order paper. It is irregular,” he said.
Mr Kimunya and Mr Ichung’wah had a nasty exchange that almost degenerated into a fist-fight, were it not for some members, who quickly intervened to avert an ugly scene that got the attention of Kibwezi East MP Jessica Mbalu, who was chairing the session.
“I was on a point of order but Kimunya turned to me and said; shut up! Let me finish. I told him I wasn’t his son. I am not Kimunya’s son,” the Kikuyu MP added even as he clarified that the exchange was off record and that he needed not apologise for something that was not captured by the Hansard.
But Ms Mbalu reminded him that he had not caught her eye and therefore needed to apologise to the House. He obliged.
The Parliamentary Budget Office (PBO) forecasts that by the end of June, the country’s stock of debt will amount to Sh8.6 trillion.
This means that the only amount available for borrowing both locally and externally to finance the budget without an amendment on the debt ceiling, will be Sh400 billion.
To ensure the ceiling is not violated, the budget committee had proposed that the national government budget be downsized to Sh1.63 trillion.
The Sh3.33 trillion budget was based on the projection by the National Treasury that ordinary revenue will amount to Sh2.14 trillion in 2022/23, a Sh342 billion increase from the 2021/22 financial year.
BAC, however, observed that there are no specific and quantifiable revenue enhancement measures in the 2022 BPS to support the expected faster growth in tax revenue relative to economic activity.
“This concern has been raised several times in the previous BPS reports but has not been adequately addressed,” the committee’s report states.
Without any significant change in policy and with the existing risks to economic growth, PBO told Parliament that ordinary revenue collection for the 2022/23 financial year could underperform by Sh360 million.
Therefore, this means that the revenue collected will be between Sh1.78 trillion and Sh1.97 trillion for the next financial year.
The committee noted that although there has been progress in implementation of the president's legacy projects, significant gaps are still evident.
