A report by former Commission on Revenue Allocation officials has warned the national government against excessive and continued borrowing.
It also recommends that the Administration Police be placed under the county governments.
The report tabled in Parliament said huge state borrowing is ballooning and debt will overburden taxpayers.
Debt is Sh3.7 trillion.
“Kenya seems to be borrowing excessively and it is important to keep pointing out to the National Treasury the dangers inherent in unending borrowing,” says the report detailing the commissioners’ six-year term. The team is headed by ex-chairman Micah Cheserem.
Their term expired on December 31 last year. Cheserem was replaced by former World Bank economist Jane Kiringai, who took office in February.
Let counties control APs
Cheserem says county security is a grave concern and one of the state’s two police systems should be managed by county governments, as in most of the world’s counties and provinces.
“Kenya may want to consider bringing the Administration Police under the counties,” he says.
Council of Governors CEO Jacqueline Mogeni yesterday said Administration Police should be under county governments, because the law gives governors power to chair the County Policing Authority.
“We even gazetted those regulations and they have been given that responsibility by law,” she said.
The report also expresses concern over the state’s failure to consult counties whenever it intends to borrow.
“Consultations between the national and county governments should be undertaken through intergovernmental relations forums to build consensus on the national debt. Viable policy guidelines will need to be developed to govern the national debt,” he says.
Mogeni said the state has not been involving counties when borrowing.
“This is because the law on borrowing has never been approved. All the debts that have been incurred are by the national government. Since it continues to borrow, the allocations to the counties continue to reduce because the first charge that we do to our revenue once we put in our pot is the charge debt repayment. Actually counties are affected,” she said.
The overall public debt, according to the Central Bank’s quarterly Economic Review report for Q2 2016-17, increased by Sh608 billion in 12 months through December 2016.
The report was released last month.
Debt increase was attributed to borrowing for infrastructure. The total national debt rose to Sh3.763 trillion from Sh3.155 trillion a year earlier.
This means the debt has doubled during the Jubilee administration’s first term, having jumped by 98.94 per cent, compared to Sh1.89 trillion the regime inherited in June 2013.
The CBK data indicate about 54.6 per cent of Kenya’s national wealth, was in debt compared to 45.8 per cent in Q2 2015-16.