•Sh2 billion was already set aside for operationalising Biashara Fund
•MPs oppose plan saying not end to troubles with the affirmative action funds
Treasury has suffered a setback in its bid to collapse Uwezo, Youth and Women Enterprise funds to create Biashara Fund.
Some Sh2 billion has already been set aside in this financial year’s budget to kickstart the entity’s activities.
MPs have rejected the merger plan, saying it would be counterproductive as it does not solve the unique problems in the funds’ management.
They also cited lack of public participation. The MPs said since the proposal has a huge impact on the community, it ought to be subject of public talks.
Gladys Shollei’s Committee on Delegated Legislation has held that the merger is speculative and does not provide tangible strategies to address challenges facing the funds.
The lot further cited job losses at the three funds, saying the proposal does not provide sufficient transitional provisions for employees, assets, and liabilities—including remedies for defaulters.
The regulations drawn by former Treasury CS Henry Rotich only state that cash balances from the three entities would be transferred to the Exchequer.
The MPs’ report followed a review of regulations to create the Biashara Fund and revoke the Acts that establish Uwezo, Women and Youth funds.
“The revocation of regulations of the three existing funds stipulate that all employees shall be required to apply for employment in the Biashara Fund and shall be vetted, hence exposes them to losing jobs,” the committee stated.
MPs who voted to oppose the regulations include Shollei, Fatuma Gedi (Wajir), Robert Mbui (Kathiani), Daniel Maanzo (Makueni), Waihenya Ndirangu (Rosyambu), Alice Wahome (Kandara), Martha Wangari (Gilgil), Ronald Tonui (Bomet Central), William Kamoti (Rabai), Wilberforce Oundo (Funyula), George Murugara (Tharaka), Muriuki Njagagua (Mbeere North), Jennifer Shamalla (Nominated), Munene Wambugu (Kirinyaga Central), Muturi Kigano (Kangema), Sammy Seroney (nominated), and William Kamket (Tiaty).
The lawmakers warned that the plan would result in the loss of identity for women and youth, and is also likely to marginalise persons with disability.
Treasury’s bid was to put to action the recommendations of a task force formed in 2013 to review the effectiveness of the entities.
“The regulations appear to be punitive to those who have been accessing the funds,” the committee said this in a report tabled in Parliament before the recess.
Shollei’s team further held that the Public Finance Management (Biashara Kenya Fund) Regulations, 2019, contravene various sections of the Statutory Instruments Act.
The Act requires a regulation-making authority to carry out a Regulatory Impact Assessment and submit the same to Parliament if it has a significant cost to the community.
“The PFM (Biashara Fund) Regulations, 2019, have a huge impact on the community, especially the youth, women, persons with disabilities, and SMEs,” the report reads.
“The Fund regulations ought to have been made through a substantive Act of Parliament instead of using the PFM Act to facilitate the roll-out."
MPs have recommended that the purported regulations be annulled in their entirety as there is no proper justification for the merger.
Treasury has in the current budget set aside Sh2 billion to operationalise the Fund, which seeks to loan women, youth, and SMEs at the rate of six per cent.
Part of the money was set to go to commercial banks and saccos to lend to members who fall in the category of special interest groups at 10 per cent.
The Biashara Fund proposal suggested the creation of a nine-member Advisory Board steered by a chairperson appointed by the President to administer the fund.
Other members are PSs for National Treasury, Gender Affairs, Youth Affairs, SMEs, and four persons nominated by the Gender Affairs Cabinet Secretary.
However, Shollei’s committee held that the merger does not guard against private entities and intermediaries that might trade with money from the Fund.
The team accused the Treasury of ignoring the input of the Regulation-Making Authority before publishing the regulations.
However, in the Budget statement read at the National Assembly in June, Rotich said the regulations establishing the new Fund were published after stakeholder consultations.