Lugari MP Ayub Savula has asked the National Treasury to expedite passage of the Public Debt Management Authority Bill to deal with the ballooning public debt.
Savula said the government's move to engage a sovereign debt advisory firm to handle the ever-rising public debt without a legal framework won't address the crisis.
"We're saying that instead of hiring an international debt advisor to deal with the public debt, we should first pass the law that will create the legal framework under which the agency will operate," he said.
The Public Debt Management Authority Bill is before parliament. It was sponsored by Nambale MP Sakwa Bunyasi.
Savula said the law will give a clear roadmap that will prevent over-borrowing, how the borrowed money should be used and how repayment is done without affecting the economy.
The Treasury in a paid-up advertisement called for expression of interest for a sovereign debt advisory firm to help it manage its external commercial debt ahead of its return to the Eurobond market later in the year where it seeks to raise up to Sh800 billion.
The advisory firm is to support Treasury's efforts in managing its external debt portfolio.
Kenya's public debt stood at Sh7.06 trillion as at June 2020, according to the 2021 budget policy statement, which was 65 per cent of the GDP.
"The main objective of the assignment is to provide liability management advisory services to the government of Kenya, through the national Treasury to restructure some external commercial debt to lower costs and risks in the public debt portfolio and improve debt sustainability," read the EOI notice published on Tuesday.
Savula said that establishment of a local mechanism to manage the country's external debts was the best option.
Key political leaders and experts have raised concern over the rising public debt that is headed to crisis level.
Amani National Congress leader Musalia Mudavadi has advised that the country should go for concessionary loans, which are payable for longer periods with lower interest compared to the commercial loans the country opted for.
Edited by Henry Makori