Civil societies and economists have accused the National Treasury of borrowing beyond the National Assembly's set ceiling, terming it as an illegality.
Speaking at the Kenya Debt Conference, they said that the habit has pushed the country into a perennial debt crisis, with owed loans crossing past the Sh10 trillion ceiling.
Kenya ended the last financial year in June with a gross total debt load of Sh10.19 trillion, a growth of 18.08 per cent over Sh8.63 trillion a year ago, according to the latest data from the exchequer.
Led by Okoa Uchumi, an umbrella of civil societies advocating for debt accountability in the country, they accused the exchequer of misusing its borrowing power to accumulate, especially domestic debt.
The lobby, through The Institute for Social Accountability (TISA) executive director Diana, Gichengo questioned why the country's debt can surpass the ceiling despite constant checks by the Parliament.
"Every year, the budget is prepared and the amount to be borrowed is approved by the Parliament which ensures the PFM Act is observed. How come the limit is surpassed?
The Public Debt and Privatisation Committee in July approved the threshold of the debt to 55 per cent of GDP in present value terms.
The committee, however, provided a window not exceeding five per cent to accommodate the current debt threshold to GDP which stands at 60 per cent.
The coalition keeps the state in check by reviving parliamentary-driven accountability on public debt at the national and county levels through increased public participation in Public Finance Management processes and identifying needed reforms for improved accountability.
Busia Senator Okiya Omtatah said the National Treasury has a limited mandate on the country's debt, a vacuum utilised by the exchequer to sneak in loans outside the budget.
"The problem with Kenya is odious debt and the culprit is the treasury. Odious debt is killing this country not genuine debt. Everything that is afflicting this country was done outside the law," Omtatah stated.
His sentiments were echoed by businessman and presidential hopeful in the last general election Jimi Wanjigi who now wants the state to table a report on how it utilises domestic bonds.
"To ensure accountability, the state must provide a clear report on development projects arising from infrastructure bonds. It should be more specific. There is too much secrecy yielding to corruption,'' Wanjigi said.
He added that putting the money in a consolidated account prevents accountability further cautioning that the amount borrowed domestically has been growing, and so are yields.
Government bonds have been attracting high yields in the past year, rising from 13.8 per cent in June last year to almost 17 per cent.
Last week, the Central Bank of Kenya (CBK) reported that yields on recent double issues of two and five years of Sh40 billion attracted 16.8 per cent and 16.97 per cent respectively.
Parliamentary Budget Office (PBO) acting director, Martin Masinde said it is high time the conversation around the country's rising public debt focuses on how the money is spent rather than just quantity.
'We need to focus more on how debt is spent. What we haven't solved is the quality of debt investments. Parliament needs to be held accountable for the oversight of investments by the government,'' Masinde said.
The government has however defended itself, challenging activities to point out those illegal loans.
The national debt conference is being held in the context of harsh economic and debt realities, coupled with an IMF 38-month fiscal consolidation programme that Kenya entered in April 2021, which has had dire ramifications on the country's economy.
The country was forced to introduce high taxes including doubling of VAT on petroleum products in order to raise revenue to fund its Sh3.6 trillion budget for the current financial year.